Could BitCoin Futures end BitCoin dominance?!

[Ebenezar64]

Danger ahead for BitCoin?!

I guess most of us have heard that CME Group is starting BitCoin futures market in December. What you might not have heard is that Nasdaq is now considering to launch BitCoin futures in the beginning of 2018

But why am I worried?!
Futures market sound like a good thing. It will bring in money to BitCoin and the market will explode, right?! That is one possibility but it is not the only one. The problem with futures markets is that you don't have to own the commodity you want to trade on. Together with leverage involved (10x, 100x, 1000x) you could spend money equivalent for 1 BitCoin to buy/sell 1000 BitCoins. Lets look to the possibilities:

• Investors will use futures to buy BitCoin at a leverage
• Investors will use futures to short BitCoin

Buying BitCoin with futures
BitCoin is "comparatively" a small market and does not have much order depth. There is not that many people selling so if an investor wanted to go long on BitCoin the price would quickly skyrocket and it would cost a lot to aquire any amount of BitCoin.

• It will be hard to get BitCoin at a high leverage since order depth will be quickly "eaten up"

Shorting BitCoin with futures
The same applies here that the order depth isn't that big for BitCoin and with futures you don't ahve to own any BitCoin to actually sell them. You can sell as many as you want and you can "empty" the order book down to ZERO. Becasue the lower you get the less BitCoin costs.

• Using futures it will be possible for external investors to empty the order book and dump BitCoin to zero in value by leveraging their investments.

Why would anyone do this?!
The question would rather be why not?! Currently banks and institutions not involved with BitCoin are loosing money since private investors are going over to the crypto world and seeing great returns. But if they start to crash the market that money is going to start to flood back into the "safe" investments again and they will be making more money.

- What are your views on the futures market?
- How can we prepare for this so that we (the personal investors) don't loose our well earned investments?

See my Steemit article on the subject: https://steemit.com/cryptocurrency/@mobbe85/could-bitcoin-futures-end-bitcoin-dominance
Or follow the discussion on the DeepOnion forum: https://deeponion.org/community/threads/could-bitcoin-futures-be-the-end-of-bitcoin.13446/#post-193740

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[Ebenezar64]

No one here thinks that BitCoin futures could be a dangerous thing for BitCoin?!
SInce the futures will have "cash solutions" you won't actually have to buy/sell any BitCoin and the large institutions can tank/rocket BitCoin price how much they want. They can just empty the order book on leverage and then see as everyone flees... That is my greatest concern.
I would love to discuss this with someone to hear both sides, positive and negative.

[CryptosapienZA]

Personally I am worried about these bitcoin futures. Yes, its a good thing that the will bring more liquidity however I would have liked more mass adoption by the ordinary folk on the street before we saw this.. I think by end next year the overall market cap will be at less $1trillion. But like you said, there's no need to own the commodity to trade in it. That should be a red flag for anyone.. I am terrified of this route.

[davis196]

Personally I am worried about these bitcoin futures. Yes, its a good thing that the will bring more liquidity however I would have liked more mass adoption by the ordinary folk on the street before we saw this.. I think by end next year the overall market cap will be at less $1trillion. But like you said, there's no need to own the commodity to trade in it. That should be a red flag for anyone.. I am terrified of this route.

CFDs (contracts for a difference) are kinda like futures.You don`t have to own bitcoins in order to make money (or loose money) from the bitcoin price.Why anybody isn`t worried about bitcoin CFDs?Big forex exchange platforms are accepting bitcoin and ethereum CFDs.The forex platforms and CME don`t care about bitcoin.They only want to make more money with the fees they charge for both btc futures and btc CFDs.
I don`t think that anyone would want to manipulate the bitcoin price using btc futures.

[Ebenezar64]

Why do you think that they wouldn't want to manipulate the price?

If it is possible to manipulate the price of an asset you can be pretty sure that it will happen because that is how traders make money. For me this seems like a great oppurtunity for traders to affect the BTC price without the trouble of having to buy and sell actual BitCoins.

[batang_bitcoin]

I had read that news yesterday and I'm also a little bit worried about it. But still let's see if what will be the impact of this bitcoin futures. Investors are too wise now and if they knew it that bitcoin is always dominant and these newly hopped in investments such as futures will try to do something for ending dominance of bitcoin, they'll quit. I understand that these two are different markets and I hope it doesn't do something negative to bitcoin.

[worldofcoins]

This why you should buy now before January,  Once they active tons of more investors will jump in.  Now you have the power to dump on their arSes

[fiulpro]

Certainly bitcoins can really be destroyed due to big whales and companies like CME who are looking for a quick profit by using bitcoins.. they aren't any life time investors that we cab trust they literally are in for the ride till they make the price of bitcoins according to them and suddenly it will crash to a never seen value and if nothing is regulated the bitcoins will soon follow the path of tulip..
The great dump by CME after investing so much at such a short duration can cause bitcoins to fall apart thus I think somehow it all should be regulated slowly we are seeing the benifits centralization can make..it can literally stop companies like CME in interfering with the normal economy of the cryptocurrency market.
Hope everything goes well and CME isn't able to invest ! Because it will provide us with short hand profit but bitcoins will be dead !

[worldofcoins]

Certainly bitcoins can really be destroyed due to big whales and companies like CME who are looking for a quick profit by using bitcoins.. they aren't any life time investors that we cab trust they literally are in for the ride till they make the price of bitcoins according to them and suddenly it will crash to a never seen value and if nothing is regulated the bitcoins will soon follow the path of tulip..
The great dump by CME after investing so much at such a short duration can cause bitcoins to fall apart thus I think somehow it all should be regulated slowly we are seeing the benifits centralization can make..it can literally stop companies like CME in interfering with the normal economy of the cryptocurrency market.
Hope everything goes well and CME isn't able to invest ! Because it will provide us with short hand profit but bitcoins will be dead !

You are genious, bitcoin will be dead, you know nothing jhon snow

[Cyberczar]

I am aware that bitcoin grabbing the interest of big financial institutions would come with it some challenges. First, the attention it's getting from governments would increase. And I think too much attention cannot be good for it.

Secondly, the leverage bitcoin seems to have probably stems from the liberty it gives and the unpredictability around it. With the big traders, we'd be having people working behind the scene to 'force' predictability on it just to make money.

With their manipulations, they'd want to make it the conventional financial market they're used to and that would be an advantage if they don't intentionally crash prices. But come to think about it, why would they want the prices down if everyone can gain with price appreciation?

Dumping their coins is still fraught with risks if the impact isn't as expected, but then no one knows how desperate some of these capitalist could be when it comes to protecting their interests.

[Ebenezar64]

As mentioned "they" will want to make money on BitCoin and they can make a lot of money by shorting it, pushing the price down causing some panic selling and then buying it up for cheap.

Also a crash in BitCoin would lead people back to "normal investments" where they are already making money. BtCoin has not been popular with banks and institutions since they have been losing investors to BitCoin that they can now "get back" if BitCoin market starts to become even more unstable.

This is not a "for sure thing", it might be that futures do exactly as intended and reduce the volatility in BTC and get even more investors interested. I certainly hope this is the case but we would remiss not to consider all the options. And when I think about a BTC crash, even if the risk is remote, the downside is so big I need to prepare for it.