Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[shmadz]

I think the model is broken.  And it is going to drive the price of bitcoin sky high.

The reason is the only way retail and institutional investors can get exposure to Bitcoin is through futures. So futures are being used as a substitute for an ETF.  Which is going to blow the price of futures sky high as people FOMO.  

Which means a roaring arbitrage trade will develop with the exchanges. But the cost of funds of being a shorter will spiral out of control due to constant margin calls on the shorts who will have to pour in more fiat. Which will restrict supply, driving the cost higher.   So we should expect an ever increasing divergence between the future price and the exchange price.

Every long trade needs a short counterparty. I agree this will incentivize arbitrage, but as long as the available price of the underlying is less than the price of the active futures, then there should be someone willing and able to fill that gap.

I think?

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[TERA2]

Does anyone know what the market cap of tulips was? I cant find it and all I see is articles about bitcoin.

[HairyMaclairy]

I think the model is broken.  And it is going to drive the price of bitcoin sky high.

The reason is the only way retail and institutional investors can get exposure to Bitcoin is through futures. So futures are being used as a substitute for an ETF.  Which is going to blow the price of futures sky high as people FOMO.  

Which means a roaring arbitrage trade will develop with the exchanges. But the cost of funds of being a shorter will spiral out of control due to constant margin calls on the shorts who will have to pour in more fiat. Which will restrict supply, driving the cost higher.   So we should expect an ever increasing divergence between the future price and the exchange price.

Every long trade needs a short counterparty. I agree this will incentivize arbitrage, but as long as the available price of the underlying is less than the price of the active futures, then there should be someone willing and able to fill that gap.

I think?

But if you are short, and the price goes up, you will have to keep topping up your margin.  Are you prepared to top up a $16k short with $20k margin?   Just trying to figure this out.

[shmadz]

I think the model is broken.  And it is going to drive the price of bitcoin sky high.

The reason is the only way retail and institutional investors can get exposure to Bitcoin is through futures. So futures are being used as a substitute for an ETF.  Which is going to blow the price of futures sky high as people FOMO.  

Which means a roaring arbitrage trade will develop with the exchanges. But the cost of funds of being a shorter will spiral out of control due to constant margin calls on the shorts who will have to pour in more fiat. Which will restrict supply, driving the cost higher.   So we should expect an ever increasing divergence between the future price and the exchange price.

Every long trade needs a short counterparty. I agree this will incentivize arbitrage, but as long as the available price of the underlying is less than the price of the active futures, then there should be someone willing and able to fill that gap.

I think?

But if you are short, and the price goes up, you will have to keep topping up your margin.  Are you prepared to top up a $16k short with $20k margin?   Just trying to figure this out.

there is no limit to fiat money.

I think the people on the short side will either cut their losses or just pile money into their position hoping for a retracement before the end of the contract. the higher the price goes, the more people will be willing to take that risk and the cheaper those contracts that are so far out of the money become. I believe Nassim Taleb made his fortune betting on this same kind of "out of the money" type bet.

[marcus_of_augustus]

Does anyone know what the market cap of tulips was? I cant find it and all I see is articles about bitcoin.

Actually the largest part of the tulip-mania was mostly in tulip futures markets.

Derivatives were a new financial 'innovation' then and the ability for tulip farmers to hedge their purchases of bulbs at planting time, in order to produce the rarest, most precious varieties, out into the harvest season was considered a huge boon for them. Of course, some greedy financial speculators got involved and the mania spiralled quickly out of control. At it's height, tulip investing clubs were being formed because it was too expensive for even one wealthy individual to own one tulip future individually, they packaged the futures into bundles and sliced and diced them up so you could invest in a diversity of tulip varieties and colours. At one point, it was said people were selling their modern townhouses in the heart of Amsterdam in order to buy only a share in a tulip future investment club.

The crash was so swift that the rarest and quirkiest tulips that had been heavily over-invested in were in abundance at their time of harvest, but anyone that owned them by now was probably already ruined by the crash in the futures market not long after the planting season.

You know it sounds exactly like the housing market mortgage debt investment bubble after the banks got involved .... hmmm.

[jojo69]

ZH top story

Bitcoin Futures Top $18,000, Soar 20% From Open - Halted for Second Time

A crashed exchange website, a volatility-surge halt, and now alimit up halt (20%) all in a few hours of the launch of the world's first cryptocurrency futures contract...

welcome to Bitcoin motherfuckers   

[HairyMaclairy]

ZH top story

Bitcoin Futures Top $18,000, Soar 20% From Open - Halted for Second Time

A crashed exchange website, a volatility-surge halt, and now alimit up halt (20%) all in a few hours of the launch of the world's first cryptocurrency futures contract...

welcome to Bitcoin motherfuckers   

All this on what is a fairly mild day.

[marcus_of_augustus]

ZH top story

Bitcoin Futures Top $18,000, Soar 20% From Open - Halted for Second Time

A crashed exchange website, a volatility-surge halt, and now alimit up halt (20%) all in a few hours of the launch of the world's first cryptocurrency futures contract...

welcome to Bitcoin motherfuckers   

[RejectedBanana]

Personally, I came from a PM background so had a healthy hatred of that fiat trash already.  I also had recently read Neal Stephenson's Baroque Cycle, a monumental work of historical fiction that deals with the nature of money and cryptrography that I would strongly recommend hodlers to read.  So my response to discovering Bitcoin was more like "OMFG... ... ...an IMPLEMENTATION!!!"

Awesome series. Seconded.

[TERA2]

You know theres millions of people thinking "Bitcoin was halted"

[bitserve]

This is getting hilarious:

http://www.cboe.com/aboutcboe/cboe-system-status

2/10/2017
[Print]
   9:34 PM CT    CFE    In accordance with CFE Rule 1302(i)(iv), another minimum 5 minute Halt will be enacted if the XBT front month future bid hits the 30% level.

So now they are allowing it to trade up to a 30% before they stop it again. Interesting.

It seems that they only stop the trading to check that nothing fishy is happening before restarting it again right after.

[Rosewater Foundation]

Personally, I came from a PM background so had a healthy hatred of that fiat trash already.  I also had recently read Neal Stephenson's Baroque Cycle, a monumental work of historical fiction that deals with the nature of money and cryptrography that I would strongly recommend hodlers to read.  So my response to discovering Bitcoin was more like "OMFG... ... ...an IMPLEMENTATION!!!"

Personal favorite. Short and sweet.
http://www.electricinca.com/56/stephenson/simoleon.pdf

“We’ve been doing E-money for e-ons, ever since automated-teller machines.” Joe says, with just the right edge of scorn. “Nowadays we can use it to go shopping in the Metaverse. But it’s still in U.S. dollars. Smart people are looking for something better.”

[HairyMaclairy]

This is getting hilarious:

http://www.cboe.com/aboutcboe/cboe-system-status

2/10/2017
[Print]
   9:34 PM CT    CFE    In accordance with CFE Rule 1302(i)(iv), another minimum 5 minute Halt will be enacted if the XBT front month future bid hits the 30% level.

So now they are allowing it to trade up to a 30% before they stop it again. Interesting.

It seems that they only stop the trading to check that nothing fishy is happening before restarting it again right after.

I think it’s so traders have a chance to take a piss.

Volume 2324.  That’s a healthy $37 million for the first day volume.

[bitserve]

This is getting hilarious:

http://www.cboe.com/aboutcboe/cboe-system-status

2/10/2017
[Print]
   9:34 PM CT    CFE    In accordance with CFE Rule 1302(i)(iv), another minimum 5 minute Halt will be enacted if the XBT front month future bid hits the 30% level.

So now they are allowing it to trade up to a 30% before they stop it again. Interesting.

It seems that they only stop the trading to check that nothing fishy is happening before restarting it again right after.

I think it’s so traders have a chance to take a piss.

Wait what? Are you telling me that those traditional traders don't have the mandatory sunnydelight bottle on their trading desks as we all do?

[HairyMaclairy]

No.  In a 20% crash they just piss their Saks suits or whatever it is that kids wear these days.

[wreck09]

[/quote]
its highly rate to the toll rate of the bitcoin price its sure a high price to any one with a good and aoutstanding bitcoin tracking....

[HairyMaclairy]

Welcome back $16,000 Bearstamp.  

Edit:  I have to say media coverage today seems very positive. 

[TERA2]

[Rosewater Foundation]

[mymenace]