Futures Contracts - fuel for a crash in BTC?

[Cast_No_Shadow]

Does anyone else here share my reservations? I'm from a precious metals investing background previously and switched mostly to crypto's this year. Precious metals markets in particular have been ruined by the future's markets with "paper" gold and silver contracts used to manipulate and control price.

This ability to create almost unlimited supply of a commodity or in this case Bitcoin worries me massively.

One of the best things about BTC currently is that its supply is limited and if you want to buy one or part of one you have to pay a price high enough to encourage a seller to sell to you. If you want tot to sell you have to own BTC.

These futures contracts are going to mean entities with big profits can create fake "paper" BTC supply out of thin air to push the market around.

The BTC market is tiny compared to the other more mature markets out there and I'm worried they are going to use this as an opportunity to massively short BTC and crash the market before going long and profiting (potentially rinse and repeat). If the banks get involved it could even potentially be used as part of a long term price suppression scheme to discourage people from buying BTC. Similar to what is going on in the silver market in particular.

I'm not saying this will definitely happen I'm just laying out my worries. I will probably be hedging by going part cash and maybe continuing to buy BCH which I'm gradually becoming more convinced is the real Bitcoin - but that's another topic entirely.

Anyone else very worried by this? Just think how many speculators out there are buying BTC now because of this news. It would be very easy to flush these people out (weak hands) and create a panic if you had big enough pockets and were willing to short BTC to the point where you create an all out dump.

https://www.c[Suspicious link removed]m/2017/12/01/cme-says-its-launching-bitcoin-futures-on-dec-18.html

[pitham1]

I agree that it could result in a way for institutional players to indulge in 'naked' shorting. But it will bring liquidity into the market. Right now, if there are no sellers, the price could zoom up if people want to buy bitcoins. These short-sellers will moderate such rapid movements.

[Cast_No_Shadow]

There is no stopping Bitcoin right now but to me this gives powerful entities a potentially very powerful weapon - the ability to naked short.

I honestly don't think the Bitcoin market is anything like big enough for these big players in terms of going long. It's tiny and would be very difficult to build significant long positions without massively impacting the price.

For me it's way more likely we are going to see some massive shorting going on and a big flush end of December. I really fear for this market which is one of the few free markets left at the moment. I can almost hear them sharpening their knives at the prospect of crashing BTC and then buying in at drastically lower prices.

[949miner]

But people thinks that futures contracts are a good thing for bitcoin, and that is the main reason of why everybody is happy about seeing the CME allowing this.

They are just going to fuck bitcoin, but anyway, bitcoin is going to keep going up, because people are still investing and that is the only thing that can manipulate the price.

If someday they just decide to stop buying it, then it will fall, and it would be a big fall.. not just $1k or $2k.

But see it at the way as everybody is looking at it, bitcoin is shining right now, and there is nothing that could stop it.

[HasHe]

I too agree with you.Bitcoin might face the same thing just as tulips faced in the seventeenth century.Here,the contract is cash based.So,bitcoins could be delivered even at the period of expiry date.So,speculators could play a big game and manipulate the bitcoin price.In seventeenth century,tulips were traded in contracts and when at the expiry time of the contract,tulips were not delivered,its price began to crash.Same situation could occur with bitcoins also.

[Cast_No_Shadow]

That;s a very dangerous way of investing though. I'm happy to swim with the tide right now but we have to be constantly challenging our assumptions as investors and asking ourselves - if we weren't already invested - would we be buying in right now?

Yes the market is going nuts at the prospect of the futures contracts and all the additional liquidity but let's not forget this market has gone up over 10 x in just this year. Very few people (apart from Clif High) predicted we'd be as high as this so quickly. That is not a sustainable rise and to me it makes complete sense that they will be looking to massively short this market.

Everyone needs to enjoy the moment now but also prepare for this kind of eventuality and make sure you protect your capital by either taking profits or setting appropriate stop losses. I really hope I'm wrong!

[Andre_Goldman]

Since bitcoin / cryptography are somehow about locks and safes  ... in my mind I always do some sort of analogy between bitcoin, gold and the Bretton Woods system ... Let's check the real gold bars inside the safe ....  

bitcoin is a public ledger

[stompix]

The BTC market is tiny compared to the other more mature markets out there and I'm worried they are going to use this as an opportunity to massively short BTC and crash the market before going long and profiting (potentially rinse and repeat). If the banks get involved it could even potentially be used as part of a long term price suppression scheme to discourage people from buying BTC. Similar to what is going on in the silver market in particular.

My point of view is a bit biased because I hate regulated markets that close at 25% drops, have expiration dates, holidays and so on.
But, with all future contracts there is an expiration date when you have to settle the balance.

If bitcoin would have been at 100k then indeed we would have a small problem.
But with the price hovering at around ~ 10k with probably only 10 millions floating for real in the markets, shorting for now looks to me like suicide.

Anyone else very worried by this? Just think how many speculators out there are buying BTC now because of this news. It would be very easy to flush these people out (weak hands) and create a panic if you had big enough pockets and were willing to short BTC to the point where you create an all out dump.

Speculator, weak hands.... cry me a river.
Nobody gives a damn about stupid people who invested only for instant gains.

And an ALL out dump will NEVER happen.

I'm not saying this will definitely happen I'm just laying out my worries. I will probably be hedging by going part cash and maybe continuing to buy BCH which I'm gradually becoming more convinced is the real Bitcoin - but that's another topic entirely.

You believe in a lie.

[dothebeats]

Since bitcoin / cryptography are somehow about locks and safes  ... in my mind I always do some sort of analogy between bitcoin, gold and the Bretton Woods system ... Let's check the real gold bars inside the safe ....  

bitcoin is a public ledger

Bitcoin's blockchain being a public ledger does not protect it from being exploited by deep pockets. The analogy is somewhat wrong in this one if we're going to stick to the topic.

I for one believes that the money from Wall Street would become the greatest game changer due to the amount of confidence from the public it can bring. But your points are valid, OP, and bitcoin futures could potentially do more harm than good seeing that it can be exploited especially by the ones who have the platform for it.

[teilwalL05]

You are getting worried if bitcoin would go in an impending crash then stop investing with bitcoin, and you think that BCH are the real bitcoin, then just go with BCH if that is your resolve and you think that bitcoin will have a sudden crash, then you are not worth the time in investing bitcoin because it is volatile and may have a dip anytime, and in one of the article that I read that there may be a bubble in bitcoin in certain regions but the cryptocurrency itself isn’t a bubble.

[GeePeeU]

Isn't this already the case with bitfinex USDT ? If so, it's going to be interesting for sure.

I've been nervous about the price after we surged past 8k.

[ImHash]

If you think that bitcoin cash is the real bitcoin, You have nothing to worry about then have you? No futures for your real bitcoin, It's free of the big boys Only difference is that BIG Wu is the boss. More power to you concerned citizen of crypto community With or without any futures contracts bitcoin has the potential for more growth over long term, Short term volatility doesn't concern the real and long term investors.