Why i think the CME listing Bitcoin Futures is actually a bad thing!

[949miner]

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.

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[cryptocrusher]

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.

[sp_skeptic]

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.

[JimboToronto]

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.

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.

[fabiorem]

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.

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.

[Alns]

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.

[oblox]

lol at limit levels.

[babar123]

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.

arbitrage makes it being the same thing

[neurotypical]

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

[gentlemand]

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.

[RamonBTC]

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.

[thecodebear]

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.

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.

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.

[Torque]

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

[European Central Bank]

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.

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.

[thecodebear]

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.

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).

[pitham1]

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

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.

[thecodebear]

The problem is not about price speculation up or down with futures, it's about what futures represent in face of the crypto community, these people are not friends of crypto and the problem at hand is that emotion based manipulation will exhaust the community, this is a psychological operation intended to strike at the weakpoint of the link/blockchain; the human factor, which is easily corruptible given enough time and energy. The entire bogus Bitcoincash circus could have been a test to measure crowd psychology and look for weakpoints and exploit them, it was a highly coordinated maneuver, many of these industry guys are also military background/connections.

my viewpoint:
https://bitcointalk.org/index.php?topic=2515687.0

The mentality of the crypto community is not battle ready against these sharks, been there 10 years ago and seen guys like Fischer suck the soul out of small investors and traders. They already have millions of coins available otherwise this setup wouldn't happen, this is going to be shorted for years and volatility will be an emotional rollercoaster that this community is not prepared for based on what I see, many people will lose alot of money by falling into the emotional manipulation of wall street, this is their home base. and so what if their shorting fails? slap some congress regulation on it then problem solved for good, unlike china/russia the west dont want to play their real dictator hand without using soft power first, some speculate futures is used to prime sentiment for regulation, entirely plausible, to regulate haphazardly out of the blue would concentrate overt anti establishment sentiment and risk catalyzing crypto as a vehicle of popular rebellion which its anonymous/evasive features encourages.

My advice?

you need to organize yourself, step 1: voting on the block chain, noone in this community asked for futures, you are being handled by the owners at this point going forward, good luck and good night.

one more thing on the US restrictions that we observe on many exchanges, I don't know the entire reason for US person restriction, but I do know that CIA is not allowed to execute Psyops on its own population. Exchanges are facing intense government scrutiny recently and one request may be to exclude US persons for this reason, without declaring it openly of course.

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.

[fabiorem]

The problem is not about price speculation up or down with futures, it's about what futures represent in face of the crypto community, these people are not friends of crypto and the problem at hand is that emotion based manipulation will exhaust the community, this is a psychological operation intended to strike at the weakpoint of the link/blockchain; the human factor, which is easily corruptible given enough time and energy. The entire bogus Bitcoincash circus could have been a test to measure crowd psychology and look for weakpoints and exploit them, it was a highly coordinated maneuver, many of these industry guys are also military background/connections.

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.

[MarquiseMuseum]

The problem is not about price speculation up or down with futures, it's about what futures represent in face of the crypto community, these people are not friends of crypto and the problem at hand is that emotion based manipulation will exhaust the community, this is a psychological operation intended to strike at the weakpoint of the link/blockchain; the human factor, which is easily corruptible given enough time and energy. The entire bogus Bitcoincash circus could have been a test to measure crowd psychology and look for weakpoints and exploit them, it was a highly coordinated maneuver, many of these industry guys are also military background/connections.

my viewpoint:
https://bitcointalk.org/index.php?topic=2515687.0

The mentality of the crypto community is not battle ready against these sharks, been there 10 years ago and seen guys like Fischer suck the soul out of small investors and traders. They already have millions of coins available otherwise this setup wouldn't happen, this is going to be shorted for years and volatility will be an emotional rollercoaster that this community is not prepared for based on what I see, many people will lose alot of money by falling into the emotional manipulation of wall street, this is their home base. and so what if their shorting fails? slap some congress regulation on it then problem solved for good, unlike china/russia the west dont want to play their real dictator hand without using soft power first, some speculate futures is used to prime sentiment for regulation, entirely plausible, to regulate haphazardly out of the blue would concentrate overt anti establishment sentiment and risk catalyzing crypto as a vehicle of popular rebellion which its anonymous/evasive features encourages.

My advice?

you need to organize yourself, step 1: voting on the block chain, noone in this community asked for futures, you are being handled by the owners at this point going forward, good luck and good night.

one more thing on the US restrictions that we observe on many exchanges, I don't know the entire reason for US person restriction, but I do know that CIA is not allowed to execute Psyops on its own population. Exchanges are facing intense government scrutiny recently and one request may be to exclude US persons for this reason, without declaring it openly of course.

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.

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.

The problem is not about price speculation up or down with futures, it's about what futures represent in face of the crypto community, these people are not friends of crypto and the problem at hand is that emotion based manipulation will exhaust the community, this is a psychological operation intended to strike at the weakpoint of the link/blockchain; the human factor, which is easily corruptible given enough time and energy. The entire bogus Bitcoincash circus could have been a test to measure crowd psychology and look for weakpoints and exploit them, it was a highly coordinated maneuver, many of these industry guys are also military background/connections.

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.

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.

[alyssa85]

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

A bitcoin big short is building.

The planned introduction of bitcoin futures contracts at CME Group Inc., Cboe Global Markets Inc. and Nasdaq Inc. will make it much easier to bet on a decline. Hedge funds, which have largely stayed on the sidelines, are waiting for the Chicago Mercantile Exchange’s futures market to open for a fresh opportunity to bet against the cryptocurrency, according to more than a half dozen people trading the assets.

“The futures reduce the frictions of going short more than they do of going long, so it’s probably net bearish,” said Craig Pirrong, a business professor at the University of Houston. “Having this instrument that makes it easier to short might keep the bitcoin price a little closer to reality.”