Bitcoin Forum

most comments i read and heard after CME announced that they will list  Bitcoin Futures in Q4 2017 ..
where the sorts of  MOON! wallstreet flood gates about to open!, etc..


for me personally that news left a  sort of bad aftertaste...



here is why

it is now very invietable that the bitcoin markets "spot" and futures will be heavily manipulated which may lead to a nosedive
(after a prolonged upmove) which we havent seen in a long time affecting average joe  , mom and pop etc.. , and the outcry for a regulation
of the bitcoin markets will be huge , which will be bad for btc in the longterm.. and may verywell be the first nail in the coffin...

just some examples which you can see and mirror easily on the bitcoin markets

Strategic Trading and Manipulation with Spot Market Power

Abstract

When a spot market monopolist holds a position in the corresponding futures market, he has an
incentive to deviate from the spot market optimum to make this position more proftable. Rational
futures market makers take this into account when setting prices. We show that the monopolist, by
randomizing his futures market position, can strategically exploit his market power at the expense of
other futures market participants. Furthermore, traders without market power can manipulate futures
prices because their trades can strategically reveal to market makers similar trades by the monopolist.
The moral hazard problem stemming from spot market power thus provides a venue for strategic trading
and manipulation that parallels the adverse selection problem stemming from inside information.

https://www.wu.ac.at/fileadmin/wu/d/i/finance/wissenschaftlMitarbeiter/M%C3%BCrmann_Alexander/Bilder-Dateien/muermannshore.pdf

Detecting price artificiality and manipulation in futures markets: An application to Amaranth

Abstract

In this article we propose a general method to test whether economic data support the claim of futures market manipulation.
We examine the question of whether or not Amaranth manipulated the market for natural gas futures using three alternative methods.
The first is our contribution to the existing body of literature on the analysis of manipulation claims.
The subsequent two have previously been discussed in the literature. All three methods yield the same result: economic data
on futures prices and Amaranth's trades do not support the claim that Amaranth manipulated the natural gas futures market in 2006.


https://link.springer.com/article/10.1057/jdhf.2012.7


DETECTING MANIPULATION IN FUTURES MARKETS:
THE FERRUZZI SOYBEAN EPISODE

Abstract:

 Market manipulation--the exercise of market power in a futures market--is a
felony under US commodity law, but recent court and regulatory decisions have made
conviction of a manipulator problematic at best. Instead, regulators attempt to prevent
manipulation through various means. Deterrence is more efficient than prevention if
manipulations can be detected ex post with high probability. This article examines a
particular episode of attempted manipulation--the Ferruzzi soybean episode of 1989--to
demonstrate how to detect manipulation in a commodity market. The analysis
demonstrates that it is exceedingly unlikely that the price and quantity relations observed
in May and July 1989 were the result of competition; they are instead reflective of market
power. The ability to detect manipulation reliably suggests that existing regulation of
manipulation in futures and securities markets is inefficient because it relies on costly
preventative measures rather than ex post deterrence.


http://www.bauer.uh.edu/spirrong/ferrpap3.pdf


Silver Thursday: How Two Wealthy Traders Cornered The Market

http://www.investopedia.com/articles/optioninvestor/09/silver-thursday-hunt-brothers.asp

Who is Mr. Copper?

http://www.investopedia.com/ask/answers/08/mr-copper-sumitomo-hamanaka.asp

Insight From “The Flipper”: Catching up with Paul Rotter

https://seekingalpha.com/instablog/696397-traderdaily/85609-insight-from-the-flipper-catching-up-with-paul-rotter

finally , it is a bitcoin forum afterall

HOW TO MANIPULATE THE BITCOIN MARKET

http://www.bsic.it/manipulate-bitcoin-market-introduction-13/
http://www.bsic.it/manipulate-bitcoin-market-23/
http://www.bsic.it/manipulate-bitcoin-market-33/

Sooner or later this market would get taken over by institutions anyway, which in a certain way may concern some people here, but we have to accept that this is just the result of a maturing industry.

Important is the fact that we should be happy that it will allow billions of capital to flow into this industry, which most of the people here look at as being something rather positive, and rightfully so.

Will it be subject to high level of manipulation? Maybe, but there isn't much for us that we can do other than to go with how things are. Only time will tell how this market will react at the time large players are entering the market.

At the end of the day, this market has been subject to manipulation for years now, so there isn't much that will be happening that we aren't aware of, or should get surprised about. I don't see any long term drawbacks.

but do you think there is no manipulation now?

in my opinion the argument should be about trying to figure out the total result of the following:
- how much more manipulation can CME listing bitcoin futures bring to the market which already has whales with so much bitcoin and money who are doing that already.
- how much bigger will bitcoin market get because of this news alone and how much that growth will make manipulating the price harder

you can't just enter a $120 billion market with $4.5 billion daily volume and think you can manipulate it greatly. specially if you are going against the market.

OP, the question of "when will Bitcoin start gaining real mainstream adoption" has always been around. The CME's listing is one of the roads that it should take to get there. We should be bullish about it.

I suggest you take a step back and read the developer's documentation at www.bitcoin.org, and try to gain a deeper understanding of the protocol. Once you do, then tell me, what can those bankers do to stop it? Sure, the price may fall for a while, but the network will live on.

How gold price is manipulated,very easy virtual gold has nothing with real gold price,traders are not buying real gold,here traders will just buy bets with cash,dollar even a penny will not goes in to btc

Any expansion of opportunities for the use of bitcoin has a positive effect. Than more opportunities to use bitcoin the more it will conform to the requirements of currency. Trade always induces the production and if it will happen with bitcoin then he would leave the risk zone.

indeed i have a same opinion with you,
but if we can not find something new with it,do not you think it's just the same ?
also they're saying about listing Bitcoin Futures in Q4 2017,but they did not mention about the date.
it's possible to see the false hope,should be right ? everything can be happen in cryptocurrency.
lets talk about manipulation,
even though right now many people manipulated Bitcoin price,but they did not do it too much.
what i mean is,when they're manipulating it they're keep doing a 'healthy' pullback later on.
i just hope because of their listing,people will not overhype it.because if everybody do that,the bubble is real
and we will see the bubble burst in a year later or more,there will be no more cryptocurrency aka Bitcoin in this world..

Yes likely this will start allowing the institutional investors to manipulate the market. But that was always gonna happen. I don't think futures price will affect the bitcoin market very much unless the investors start buying bitcoin to hedge their bets. And if they do that then that means a huge amount of money is gonna flow into bitcoin so the price is gonna skyrocket by tens of thousands of dollars very quickly. They might be able to manipulate the market then, but by the time we'll have all made so much money, and the global pressure on bitcoin will still be upwards even if those investors are putting downward pressure on it, since lots of new people will see the boom and be getting in on the gold rush.

Anyways, not worried about it. Think it will have a hugely positive effect on bitcoin price and therefore continued adoption.

futures == mom and pops and their dentist have easy access to the bitcoin world...

wich will unlock a rise in demand of more uninformed investors..

uniformed investors vs. a big players or as i stated in the Original post "Spot Market Power Holders" whereas the later are only interrested in making money.. and have a nice playing field which is unregulated and as such
will be blamed for the losses occured.. by mr smith  aka the dentist of mom and pop ,  who was just interreset in participating in the bitcoin craze.. and now sits there with  a huge loss.. who to blame ?

the bubble is not bitcoin.. but the derivative on top of it (futures).. and its easy to blame the "hacker internet nerd money" aka bitcoin which was formed in a subculture etc.. bla bla..

get it ? the mainstream adoption thru manipulative markets where the big boys aka.. financial institutions etc. are the ones who dictate .. will cause a huge mayhem upon the bitcoin world..unless you are not driven by
making profits..


tldr;:

futures open the world of easy money for the big players and later  blame bitcoin for the loss of the uniformed participants...

aka. make money and get rid of a potential threat at the same time... nice play

Honestly I have been having mixed feelings as well, at one point I was very happy that bitcoin prices were rising, till I came to know of the futures, as the Op mentioned future's are open to manipulation, but I am not sure as to how will they be able to do it, but what concerns me is in end it shall be regulated, people could loose more than they will ever gain, cause people used to hold for long term and this will be purely speculative and this is not the assect to bet on.

The only regret that I have is about the timing of the launch. If CME had delayed the launch by another year, I could have accumulated a lot more bitcoins. If your worry is about market manipulation by big players, the only comfort is that regulators will be watching. There will still be some rogue players, but at least not all of them will get away scot free.

There's one thing you're not considering.

A bitcoin futures market is different from any other futures market because the liquidity of bitcoin is perceived to be difficult but the traditional folks on Wall St. The futures may be manipulated in large form, but will the real price of bitcoin be manipulated as much? No.

Another characteristic of bitcoin that will dilute the impact of futures speculation is the fact that this is truly a world market, a global market. The spot price isn't set through one or two central markets.

Things like this bring some manipulation, which is normal in any market, but it doesn't hurt the protocol. Bitcoin will continue to be Bitcoin.

I think these forks are a much bigger threat.

   It is good and bad at the same time.

   It is good because it will raise awareness in Bitcoin, awareness is always good, but it is bad because people that discovered Bitcoin in that way will consider it a commodity, which it is not.

   I have spent lots of time in this past 6 years trying to persuade people that Bitcoin is currency, maybe one out of ten people that I convinced to buy some bitcoins considers them as currency, with which he can pay someone, or to be paid for something, all the rest, 9 out of 10, still think that they bought some kind of shares in some strange internet business that they can't understand. That is biggest problem of Bitcoin. People would buy Bitcoin in hope of bigger return of fiat money, but they will not work for Bitcoin, or offer their services for Bitcoin.

  So, because my humble opinion is that we will not see real price of Bitcoin before the time when we will be able to buy bread in local minimarket with Bitcoin, I don't think that arrival of CME or similar company what bring much good, neither for Bitcoin as idea, nor for the price of Bitcoin. Yes, those people will bring some money in the game, but with the purpose of bring more money out of the game, and on the long run, they will delay the time when the smal business owner will consider adopting Bitcoin, because It is probable that someone will consider to provide you goods or services for some amount of some currency, but it is much less probable that someone will provide you with goods or services for something that he considers share, stock or commodity.

  

I have mixed feelings about the CME futures listing.

I will definitely trade the futures now that I am being kicked off of BFX due to being a US person.  I don't trust Polo.

The futures will reduce volatility.  Whether this is a good thing or not depends on your perspective.  The reduced vol will make BTC more attractive to mainstream investors.

A slew of new financial products will become available that are based on BTC.  After futures have been trading for a while, options on futures will become available.  This will enable strategies that have been difficult to execute to this point.

It will provide an easier route for Wall Street and governments to manipulate price.  Why hasn't gold skyrocketed even as the us debt tops $20T (but bitcoin has)?  As they say, there's a "robust" market in gold (translation: the price behaves the way that the elites want it to).

This.

The manipulators are going to have a real hard time of it as long as so many exchanges around the world are trading bitcoin 24/7.

They're only going to be able to manipulate the market if they actually buy into the market, and no just bet on the future of the market. And if the buy in then sure once they've bought in enough they'll be able to manipulate it. But for them to buy in that much the price will skyrocket.

Bitcoin is too big to ignore and too big to be afraid that will failed if the CME listing Bitcoin Futures happens!
its the time for bitcoin to take a step forward and fighting in huge market like CME.

You are saying that bitcoin futures will be manipulated. Well, in a way - perhaps. However, not to forget that people always have to agree to buy or sell the coin at a certain price on a specific day in the future and that's how btc futures contract will work. This will leave some space to people making decision about the prices.
What's more, I don't think that CME will have serious impact on overall price of btc and make other exchanges adjust to it (= make users demand other prices). This exchange is big but notice that people are used to work with other kinds of products there and perhaps btc will not be very popular out there at all. If it will, though, it can bring btc to its end and even cause financial crisis.

Someone is going to make a fuck ton from shorting BTC.

Yes, i really believe that this is a very bad desicion because i think the same as you, they are going to make a mess on the market, but it always happened, those "economic gurus" always had the control over everything, but who knows, those kind of news are always pusshing up the price and this is good for everyone who has some bitcoins. For now, it is good for me, but once that we face the consequences we all would be regreting about those guys who wanted to list bitcoin on those futures stocks.

There is huge manipulation of the bitcoin price already by many whales, this will be no different once futures are opened up, let's face it, the day bitcoin crashes hard as you said will come but long term I'd say it's a good thing, if bitcoin falls and is then regulated and makes a come back it will only strengthen the market in the longer term and attract more investors.

An overlooked point: this will be a cash settled market (http://www.zerohedge.com/news/2017-10-31/cme-launch-bitcoin-futures-q4). No bitcoin will actually change hands. If you want actual bitcoin, you have to cash out of your futures contract and buy bitcoin just as you otherwise would. If you want to short bitcoin, you don't actually have to borrow a bitcoin, you just have to put up the required cash margin. Or so I read it. I think on most other futures markets you at least have the option to settle in the commodity traded, e.g. you can demand real gold or real pork bellies on those markets, though hardly anyone does.
 
This will have consequences, but I'm not smart enough to know what they will be. It creates an exclusively paper bitcoin market that will operate in parallel with the real bitcoin market, but the prices on the paper market will be set according to the "CME CF Bitcoin Reference Rate (BRR)" which is supposed to be an agglomeration of rates from various "constituent exchanges" which are Bitstamp, GDAX, itBit and Kraken - all trading in real bitcoin.

In a "real" futures market, if you shorted bitcoin you would have to borrow bitcoin and sell it, expecting to buy it back at a lower price, and this would push the price down. But in the CME version, no bitcoin would actually be sold on the real exchanges, so the downward pressure on the price would not be direct - and the effect on the CME prices would not be direct either, since the CME prices are fixed by the "real" prices.

My head hurts. This is as far as I can go.

This.

The only way they can manipulate the market down is to dump coins. To do this they'll need large reserves, which due to Bitcoin's scarcity will entail spending lots of money up front and driving up the price in the process. Net result: almost even. Meanwhile Bitcoins natural growth will keep marching on.

Squeezing shorts will be much easier. They'll simply buy with the vast amount of fiat currency they already have, also driving up the price. Only the rubes will lose money.

Remember, this isn't an ETF. It's a futures betting operation, a sort of casino. Their customers won't be investing, they'll be gambling. All bookies and casino operators expect their vigorish. They also decide on the spread or number of zeroes on the roulette wheel.

I see this as just an expanded form of Satoshi Dice, and we all know how much SD helped Bitcoin get through the early days when it was trying to establish itself beyond alpaca socks, overpriced pizza, and the Silk Road.

Every little shopkeeper, hooker and cabbie in Vegas benefits from the big casinos being there. I personally welcome the futures markets to Bitcoinland.

And if they already have those large reserves? Lets suppose they were buying in all those dips since August. A whale dump his coins for a short profit, the institution buys it cheap from him. Fork wars are created as a distraction, and they silent infiltrate the scene. Then they announce futures contracts.

I hope they dont have enough to short the market early. Lets hope the price go above 25k (and not 10k) before they try to do it.

I say this because of this parabolic curve: https://fs.bitcoinmagazine.com/img/images/Figure_2_14.original.jpg

According to this pattern, the correction can go from 10k to $5500.

Corrections will be massive after these guys (officially) hops in.

They are going to have a lot of power over bitcoin, and there is nothing new with that , we all know that they always wanted to manipulate the price as much as they could, and we should not be surprised about this.
But why do you think that they are only trying to take the full control over bitcoin?
If they list bitcoin on their futures list, it doesnt mean that they are going to have the control of it, it just means that are going to be able to control the futures, not the real price of it.
But yes, it will pump the "real" price of bitcoin a lot, i dont see anything wrong with that.

lol at limit levels.

arbitrage makes it being the same thing

Max Keiser explained why attempts to manipulate the Bitcoin through these classic techniques of shorting the market after pumping it will only result in blowing their own hands with their own explosives. I think think was the video:

https://www.youtube.com/watch?v=PSIRGGR1a2w

If not then its somewhere on this playlist:

https://www.youtube.com/playlist?list=PLPszygYHA9K2kBJhK7jBEO75gQtDhspOH

http://kiddynamitesworld.com/lets-talk-arbitrage-bitcoin-futures-edition/

This is one fella's take on how it might affect real world prices.

I for one can't really be bothered to attempt to wrap my brain around it. I'll let it sort itself out in real time in the real world.

There’s always be an advantages and disadvantages about this adaptation for cryptocurrency and the investors but should we be afraid all the time for this, if we can adjust on the faster phase it is needed for the community to grow and face any circumstances it brings. That’s the better thing to do than be worried much.

I don't think any of them have. There's been no news at all of institutional investors buying Bitcoin outside of a handful who actually believe in Bitcoin. Furthermore Bitcoin Futures just got announced what like late October? So they didn't even know about it way back in August. And there has been massive organic user adoption the past few months that I think accounts for all the recent growth. Basically there doesn't seem to be any evidence that institutional investors have started buying Bitcoin, and most of them are just looking to make money on futures right now, but they won't be able to crash the market, so only long futures will make money for people, except for those who happen to time a short perfectly for when a correction happens.

According to how the Bitcoin Reference Rate (BRR) will be calculated, it appears that intraday volatility will have very little effect on the futures price.

http://www.cmegroup.com/trading/files/bitcoin-reference-rate-methodology.pdf

Do you think they're gonna tell anyone? OTC markets are completely hidden. There've been buying bots on GDAX for months.

Even if the futures traders themselves haven't been, they will know people who have been collecting coins for this type of opportunity to offload on them. This type of thing was always going to arrive. No doubt some traders prepared to service it.

Regardless, I very much doubt the futures market will have any substantial and lasting effect on the real market. Also the idea that they know people who are looking to offload coins for this opportunity hahaah. Who looks to offload an asset that is exploding exponentially?? Anyway I'm sure there's a handful of people that have bought Bitcoin in an attempt to short it when futures come, but they will lose money. They aren't just going to be able to indefinitely crash an exploding market haha, the idea is just absurd. And anyone looking to offload bitcoin is looking to not make money. Same with anyone trying to short bitcoin futures. There might be some small dumping because of this persistent idea that you espouse that futures will somehow crash the market despite not touching the market, so sure there will be some weak hands that don't understand this thing is cash settled. Also consider the fact that there will be plenty of investors in the futures market who are going long, not short - the sort of people who haven't wanted to get directly into Bitcoin because they only do Wall St stuff so they will get in long through the futures market. But consider me not worried in the slightest bit. If anything futures is bullish for Bitcoin because it means Wall St will be moving more into the actual Bitcoin marketplace at some point soon (even some $100 billion hedge fund in the UK said they are gonna get directly into the market once they see futures come online - and this is just the first of many hedge funds).

Actually, using the closing rate is more susceptible to market manipulation. We have all seen heavy buying in the last half an hour of trade in the equity markets, so that the price is pushed up at close. I suspect similar manipulation will happen in the Bitcoin market as well. And unlike equity markets, there is no regulator to wield the stick.

Not sure what you mean by regulation here. Sure they can regulate futures markets because that is wall st but futures markets have nothing to do with bitcoin itself other than just going off the price of Bitcoin markets. They can regulate US exchanges to have KYC and AML and make the exchanges hand over tax information sure okay thats fine nothing really wrong with that. They're not gonna ban Bitcoin itself, this isn't China. Not sure how else you think they can regulate Bitcoin. Seems like just a bunch of doom and gloom.

And even if the futures investors buy up a bunch of bitcoin to try to continually crash the price to make futures shorts work, its gonna get harder and harder as time goes on because of user adoption of Bitcoin increasing so much. As we've seen in the last two corrections, buy pressure is so strong these corrections no longer last 6 weeks like they did earlier this year, now they last barely a week before buy pressure pushes the price back to new all time highs. Eventually Wall St will realize that while they can control markets in which they ARE the market, its gonna be a lot harder to control a global market where literally anyone can participate and that is gaining adoption by the hundreds of thousands of user every few days.

I don't know about all of you, but I certainly won't be selling a single satoshi at these super low prices. We're heading to 6 digits, cash settled futures ain't doing nothing to stop that.

Interesting points. But what about tether? Tether was not created by the US government, but by Ifinex. And if Bitfinex banned US from their portfolio just to avoid this scrutiny?

CME is in the US. Can they manipulate the price on other countries? And the bitcoin exchanges from other countries, how they will be scrutinized? They will need to pass some regulations in the UN, and expand futures to other countries as well. This will take time.

Regulation falls heavy on merchants and business dependant on physical land based locations (such as grocery stores/casinos/real estate etc) where methods of enforcement are easy and proven to be effective. The regulatory body cooperates with many different agencies to enforce on multiple levels in different parts of society, it's all intervowen, EU follows US in these things, always. I'm thinking Liberty Coin scenario, and it certainly will put more conservatie affluent demographics into Jim Rickards line of thinking which isn't unreasonable in face of regulatory pressures and all the other things surrounding mainly bitcoin.

It's not hard to control a global market using a combination of agencies in cooperation (there are many multilateral agencies for precisely this purpose), the human factor is the weakest link and easily influenced, citizens will be unable to decouple from the current situation without any means of counter mobilization, to governments around the world the crypto space right now is a blonde girl with big tits who just turned 18 and moved out of her parents house. I really see no successful long term outcome whereas bitcoin is concerned, newer blockchains will bridge the utility factor that bitcoin severely lacks which could be enough to activate citizens in face of future "coups" without the need for deeper organized movements (think net neutrality movement). Huge swathes of the population were sidelined by bitcoins meteoric rise, don't underestimate "skadeglädje" as a psychological concept, noone will run to bitcoins defense.

Once you slap money laundering/terrorism on bitcoin it's all over, social sentiments far outweigh utility unless there is a gigantic depression-like market crash forcing a public rush into crypto. I would say our problems in this scenario falls closer on some kind of large scale insurrection/multi nation war scenario which for sure goverments are used to handling and swiftly reigns in any home brewed decentralized initiatives.

With that said I actually checked in to reconsider short term performance of bitcoin based on new sentiments (this is the speculation forum by the way for those who are following my line of thought, do your own research, I am sharing my thoughts influenced largely by personal measure of risk exposure like many others, at the point where I myself from experience know that emotions kick in and dictates behaviour. It is possible that if my investments were 1/10 or ten times higher these conclusions would be significantly alterated):

-Crypto community sentiments aren't euphoric at 12k bitcoin and volume is good, the longer prices remain stable the harder it is to utilize crowd psychology, I am not far behind you on 6 digit bitcoin within 30 days if speculation concerning futures and shorting remains a real prospect, however:

-I think it will peak shy of $1tn or somewhere around 50k due to these figures being psychological barriers, the crypto market should peak at $1,3-1,5tn since there will be some overshoot, fundamentally alot of people will be in alot of profit at these levels and this will affect behaviour and induce euphoria. Peaks are often underestimated so somewhere north of $1tn is the new target.

-I agree, it's not easy to enter a shorting space at these levels since price discovery remain stable, but this sentiment was not the same a few days ago when price went from 7k to 11 in one burst.

-Lastly, before positioning yourselves in face of rising value, besides market psychology, consider volatility. There was sound reasoning behind a previous prediction of $15 000-30 000 and the upper estimate is still relevant, but I think there will be overshoot towards $50 000/$1tn bitcoin, with realistic order validation from 42-47k (this wont last for more than 24-48 hours at most during initial rush). $25k bitcoin @ $500bn isn't news, $50k @ 1tn is a sensation.


Tether is facing its own set of challenges, I did consider bitshares to hedge without having to convert to fiat but volume on openledger is too low and the big exchanges requires KYC so it's no different from wire transfer to bank account from an anonymity point of view.

On the topic of the UN, used to be a stern supporter of this institution but it's a mess now that people/countries in the west understand that BRICs and even big countries like France ain't got their shit together from a moral and ethical viewpoint that the nordic countries, germany and regions of the US takes for granted. US already knew since long it's always been sceptical of the UN, but for me as a Scandinavian to witness the reality that social media presented unfortunately makes me completely dismiss the leaders of 95% of all countries, transparency internationals corruption map is a good starting point if you still take the UN seriously. United Nations will be replaced by a citizens initiative, it's toothless due to infiltration and dependent on sovereigns for funding.  

tldr: I believe I represent a majority of investors right now between $5000-$30 000, predicting short/medium term peak of 200-500% before and early into futures opening late december/january. If you're low on liquids and see your crypto shoot up like this it's probably a wise thing to unload 25-50% temporarily and wait for rebound, and reenter in a quarter to 6 months. Personally I think this is it for bitcoin now that serious options are beginning to crop up, especially ethereum with krypto kitties are the writing on the wall (not this particular game but the spirit of where things are heading), eth it correlating with bitcoin and will nose dive with <exit bitcoin>, come back second half 2018 on strong fundamentals.

Bloomberg has an article about hedge funds itching to short bitcoin:

https://www.bloomberg.com/news/articles/2017-12-04/the-next-big-short-hedge-funds-prepare-to-trade-against-bitcoin

Read that already. Doesn't change the fact that futures are cash settled. They still have to first buy into bitcoin in order to crash the price = bullish!

Not worried in the slightest.

Rekkage incoming...

"it is now very invietable that the bitcoin markets "spot" and futures will be heavily manipulated which may lead to a nosedive"

True to that - I completely agree, and guess what? It is totally and absolutely inevitable future, there is no way that power-that-be will miss that opportunity to get even richer.
Bitcoin was, is and probably always will be prone to any kind of manipulation, if there will be organized movement or rich enough individual - the price might be manipulated with ease.

And I also acknowledge - introducing bitcoin options and futures will bring the first real chance to short bitcoin, since you could bet on the price going down too. But again, we can't do anything about it.

Are you guys not realizing that the futures market is cash settled? No bitcoin will be exchanging hands. There will be no selling of bitcoin in futures no matter how much they short. All they are doing is betting on the price. It won't affect the market at all. It's just a way for Wall St investors to make and lose money against other Wall St investors without actually getting into Bitcoin because they don't want to deal with crypto exchanges. They stick to their regulated Wall St exchanges where they don't put their millions of dollars at risk of being hacked or dealing with the limited withdrawal policies of crypto exchanges.

So a hedge fund betting a few billion on bitcoin $1000 in 6 months would not be incentivized to somehow get a hold of a huge pile of real bitcoins or borrow it from someone who has? Cash settlements is even worse because profit is decoupled from the crypto market and taking up strategic positions in actual coin to manipulate prices could prove a drop in the ocean compared to cash profit. There's only $120m buyside to $1k bitcoin, order depth isn't a measure of demand but on a $200bn asset you'd expect a little more. The crypto space relies on unconventional value signals to determine price points, it's easy to buy influence in the right channels to propagate an agenda, bitcoincash was a well coordinated example of this. Bitcoin is highly susceptible to crowd psychology and they are targeting the most controversial crypto of the lot backed by threats of congress regulation/fbi/atf/homeland security anti money laundering/terrorism sentiments and a discontent public at large who were sidelined and only wish to see bitcoin crash and burn. What small investors dont comprehend right now is that there will be a proverbial 800 pound gorilla (or bear I guess) with a stick on the sell side starting december 10 (earlier than I thought) which until this point wasn't there before. Covering a short position is no big deal, simply start over on a higher price, there will be constant selling pressure going forward to test the market for price discovery and force weak hands out of positions, this is their bread and butter, you can't win. I was there in biotech, it's like running into a brick wall over and over as a small investor, long investors needn't apply i'm addressing people like myself who see short term opportunity in bitcoin, I think long term investors bullish on bitcoin is facing a different set of fundamental challenges, as long as one is not all in on bitcoin atleast it won't ruin you.

https://hbswk.hbs.edu/item/the-problem-with-hedge-funds
https://www.thebalance.com/how-do-hedge-funds-impact-the-stock-market-3306238
http://business.financialpost.com/investing/the-next-big-short-hedge-funds-ready-to-bet-against-bitcoin-1


Already bought or will borrow, no need to buy.
These titans don't enter on ath, futures is rigged wouldn't happen if w:st couldn't benefit already, expecting a big push upwards to let crowd psychology kick in before going to work. Even if hedge funds ride in on a white horse to buy everyone out it's a calculated move and price to pay to gain control of the golden calf, cut the head of the hydra, bitcoin is a systemic risk to the status quo, remove confidence in bitcoin = triumph. This is war to high street if you haven't been paying attention, big enough for the privilege of becoming another casualty of the masters of the universe, ripe for the slaughter. Same guys who muscled in on Lazard when our cousin was raking in $100m per in private salary for a short time in the late 90s blowing cigar smoke in UBS face from his top floor office on rockefeller plaza without a single f*k given, well that didn't last long and he saw an 85% decline in private assets over a period of years after Lazard was subject to a hostile takeover. Color me sceptical.

well we'll just see how it plays out i guess haha. I for one am not worried. Futures aren't gonna suddenly stop the exponential increase in user adoption and price. If anything it'll get people more interested. They can try to control it. We've got tens of millions currently in Bitcoin and there will be hundred of millions more people getting into it in the next few years. Can Wall St control a capped supply where most of the supply is already gone and not selling to them and tens or likely hundreds of millions of people moving in to the market over the next few years to get their own piece of that supply. Not too mention plenty of people on Wall St don't want to short but in fact want to go long. Despite all the doom and gloom talk of some people, I'm not worried in the slightest.

This is an interesting alternative interpretation on introduction of futures from one commenter, it would support bullish momentum prior to peak but its getting hard to pinpoint exactly at what point that will occur, small investors should take profits of 25-50% at 200-500% upside and let it run from there my proposition:

https://www.cryptocoinsnews.com/bitcoin-price-will-hit-20000-before-tanking-financial-expert/


No, you're not understanding real economic bubbles.

Tulip bulbs in the 1600s traded normally as a luxury commodity for years. It was only when derivative instruments were introduced (tulip futures and options) that speculation went rampant. 1920s stocks reflected rational investment in the emergent electrification of the nation, until excess leverage provided by the banks allowed 10x or higher leveraged positions. The 2008 debacle was fueled by Collateralized Debt Obligations and Credit Default Swaps - more derivatives offering excessive leverage.

Are you starting to see the pattern? True bubbles occur when the presence of leverage either directly or through derivatives becomes excessive. So right now what we have is likely the start of any bubble since futures trading is just beginning later this month. Only after the futures desks are filling orders at a clip and bitcoin options are a thing will we likely have crossed over into true bubble territory.

They are already buying. Why do you think theres no correction right now? Its only green candles, they are buying all orders up.

People should stop selling for a while, decrease the volume on the exchanges. There should be some way to protect against what they are planning to do.

hahaha so much doom and gloom about futures that you all forget whats going on.

You say there's no correction right now...uhhh we literally just had a correction last week!
So what in the world are you talking about?? In fact we've had TWO corrections in the past month!!

I would say its the massive influx of new users that are buying up all the Bitcoin. Coinbase new users are absolutely booming since futures were announced about 6 weeks ago. On two separate days Coinbase has added 100,000 users in a single day!

I think all you doom and gloom type people just need to sit back for a few weeks and let futures start and no it isn't the end of the world, Bitcoin will be just fine and the next 10x march to $100k will continue.

Yes this.

What they are really doing is trading "contracts", the same way how Etoro users are trading CDF instruments. All they are doing is making calculated risks on the price movement of Bitcoin, not buying and selling actual coins.

Everything is also settled using the price from Gemini. https://gemini.com/

But if they truly want to short sell Bitcoin, they will be in hell in trying to figure out why it keeps rising.

The only reason cme futures is bad is because when the sec cancels it, btc will tank hard. But if there were never the future's tease, it wouldn't be a big deal and btc would quietly be making an uptrend past $5k.

It will not. What it will do is to turn bitcoin even more volatile than what it is now. Pumps and dumps will be massive due to money flowing from hedge funds.

hmmm so what do you guys think will happen and the better question how fast will it happen will it be like by monday the price will dump because of all the shorts and then raise and then dump again? Or will it take some time like a few weeks or so? I don't really know what futures are and didn't know anything about the stock market world until I got into crypto

My post is predicated under the assumption that the volume of futures trading will be larger than the volume of BTC exchange trading someday in the future. This assumption makes it slightly more likely that a futures market has the ability to influence exchange rates due to margin.

Two examples: 1) trading in a futures market and 2) trading on an exchange

Ex 1. If a futures contract begins to go negative, the contract holder must either decide to 1) close out at a loss or 2) add more cash to the account in order to satisfy margin account requirements. With this is mind, all futures holders would have to decide which option to choose. This decision could create the possibility of momentum if the exchange rate were to change.

Ex. 2 When trading on an exchange, the holder doesn’t have to make these types of decisions at one time. Rather, a holder can decide when to buy or when to sell their position.

From a futures market standpoint, a lot of trading involves stop loss and TA strategies. This also happens to some extent in exchange trading. This creates a large pool of participants in both markets that behave in accordance to expectations of how “others” in the market are (and newcomers will also) behave. With the large plethora of TA information bought and sold between companies, this creates the expectation of price movement. The results of this are often additional futures purchasing and exchange rate fluctuations that either precede or follow actual decisioning made by participants.

From an exchange standpoint, the interaction with futures markets enable arbitrage opportunities. Since participants in these markets do not behave in a solo manner (only futures or only exchanges), this creates opportunity to buy on one platform and sell through the other. The net of this behavior keeps futures markets and exchanges tied together closely.

At least with respect to present day currency futures and exchanges, there is a general relationship between volume of futures trading and exchange prices. This doesn’t suggest causation, but it does suggest a strong correlation. Another way put, if BTC prices on the exchange are highly volatile, we might see a huge increase in futures trading because of the speculation interest. More futures trading, more price volatility on the exchanges.

In conclusion:
1) Futures markets and exchange market participants have different decisioning that influences market behavior and price
2) Futures markets may significantly alter BTC exchange rates for as long as futures trading volume is higher than exchange trading volume.
3) Over time, the futures markets and BTC exchanges will become more intertwined resulting in less volatility between the platforms

Final comment: Once the futures markets open, price volatility will stay rather consistent and will correlate positively with good news and upbeat market sentiment. As these interactions between futures markets and exchanges mature (also as BTC availability decreases), volatility will decrease.

OP had a very valid doubt and his speculation on November is proving to be true. BTC price is being manipulated heavily.
CBOE bitcoin futures already proved OP's doubts on Jan 16th and we all know where it took us and now comes CME's on Jan 26th. Will BTC price dip again?

did you heard Coinfloor to launch the first physically delivered bitcoin futures??
Check this out: https://coingape.com/coinfloor-offer-physically-settled-bitcoin-futures/