[Bearish] Keep bitcoin away from the real economy, says billionaire

[bbc.reporter]

As I mentioned in the past bearish thread I made, the CME Group's creation of a bitcoin futures and derivatives market might cause another catastrophic financial crisis. There is nothing stopping the CME from including scam cryptocoins and tokens in their market. Like what they did in the past, they will combine different scam altcoins with bitcoin in tranches, and have them rated as class A investments.

It is a very terrible time to be bullish.



Peterffy is reacting to news from CME Group CEO Terry Duffy, who earlier this month announced bitcoin futures would debut on the CME by the end of the year.

Peterffy called this move "suicidal."

"Bitcoin has risen by 1,000 percent over the last year. It went from 700 to 7,000 -- there is nothing to say it wouldn't go to 70,0000," Peterffy said.

He argued that even 20 percent limit up or down on bitcoin, as Duffy has suggested, wouldn't protect against bitcoin's volatility.

"It could bring down the entire economy," he said.

Read the whole article https://www.cnbc.com/2017/11/15/thomas-peterffy-keep-bitcoin-away-from-the-real-economy.html

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[949miner]

And this makes us think about that bitcoin can really reach more than $50 thousand dollars, because it made more than 1000% on this year.. Imagine if you wake up tomorrow and you see that your portfolio has went up by more than 10 times of your previous balance. If you had $100k, you are going to have a million if it happens. Of course that it is not going to happen soon because 2018 will be full of obstacles for bitcoin.
We only have to wait a little bit longer and see how does the market reacts from all those kind of stuff.

[DaMut]

actually what he said make a sense,
but it will affect the entire economy ? i doubt that it will.
Bitcoin has not prove its usability wholly because there're a lot of problems that we will face when people starting to adopt it in their real life.
for example the transaction and the fees itself,
what make it so special compared to other is its usability,but if the hype continue while nothing change i believe it'll be bad for Bitcoin itself in the future.
also CME listing is a bad move for Bitcoin right now but at the same time,
it's the trigger for people to know about it.
everything is like double edge sword for Bitcoin,they have their own advantage and disadvantage.

[P_Shep]

You going to post a [bullish] post at any point, bbc.reporter?

Jus' wonderin'

[alyssa85]

actually what he said make a sense,
but it will affect the entire economy ? i doubt that it will.
Bitcoin has not prove its usability wholly because there're a lot of problems that we will face when people starting to adopt it in their real life.
for example the transaction and the fees itself,
what make it so special compared to other is its usability,but if the hype continue while nothing change i believe it'll be bad for Bitcoin itself in the future.
also CME listing is a bad move for Bitcoin right now but at the same time,
it's the trigger for people to know about it.
everything is like double edge sword for Bitcoin,they have their own advantage and disadvantage.

The thing about derivatives, is that they allow you to go short - and the losses could be unlimited because bitcoin is on a tear right now.

If the people who go short are borrowing to do so, and they default, then the lenders are in trouble. And that's where the trouble comes for teh banking system - bad debts.

If big investors want to invest, they'd be better off using an ETF, rather than derivatives. It'll be interesting to see how this plays out.

[ragnar0k]

They can do whatever they want in their speculative cash-settled sandbox, cant see how it will impact btc if not minimally

[Samarkand]

...There is nothing stopping the CME from including scam cryptocoins and tokens in their market. Like what they did in the past, they will combine different scam altcoins with bitcoin in tranches, and have them rated as class A investments.

...

I think this is pure conjecture. I couldn´t find any claim that the CME group actually has any plans to offer any products related to altcoins at all.

Why would they even do that? The liquidity of the majority of altcoins (with the exception of maybe ETH) is way too low to be suitable
for any sort of derivatives. Additionally, it is very doubtful whether it would be even legal for them to offer any products related to this due
to the regulatory uncertainty surrounding most of these cryptocurrencies.

[Clavulanic]

actually what he said make a sense,
but it will affect the entire economy ? i doubt that it will.
Bitcoin has not prove its usability wholly because there're a lot of problems that we will face when people starting to adopt it in their real life.
for example the transaction and the fees itself,
what make it so special compared to other is its usability,but if the hype continue while nothing change i believe it'll be bad for Bitcoin itself in the future.
also CME listing is a bad move for Bitcoin right now but at the same time,
it's the trigger for people to know about it.
everything is like double edge sword for Bitcoin,they have their own advantage and disadvantage.

I guess it was just a another rumors coming from those who didn't wan't bitcoin to succeed. In fact those countries started to adopt bitcoin didn't have any major issues about that said problems that may occur to fiat economy. Each currency has it's own specific negative and positive breakthrough in terms of usability and impact to society. If we have to review about Japan and Korea's bitcoin adoption, it went out smoothly without any reported cases of economic fall down. Now the understanding was of decentralized must always be in separate state compared to a centralized fiat cash currency.

[CryptoBry]

...There is nothing stopping the CME from including scam cryptocoins and tokens in their market. Like what they did in the past, they will combine different scam altcoins with bitcoin in tranches, and have them rated as class A investments.

I think this is pure conjecture. I could not find any claim that the CME group actually has any plans to offer any products related to altcoins at all. Why would they even do that? The liquidity of the majority of altcoins (with the exception of maybe ETH) is way too low to be suitable for any sort of derivatives. Additionally, it is very doubtful whether it would be even legal for them to offer any products related to this due to the regulatory uncertainty surrounding most of these cryptocurrencies.

The plan for the futures is centered on Bitcoin and if ever there would be an addition of other coins later I don't think these people are stupid enough to include the so-called scam or shitcoins. Definitely, there can be a big possibility that later on they might include Ethereum and even BitcoinCash but no shitcoins for sure. The fear is unfounded to say the least. let's see how things will transpire under CME's proposal which is not yet approved by the government.

[Torque]

There is a lot of hidden meaning and complexity in Peterffy's response. I'll try to summarize.

It has everything to do with how equities, commodities, other assets, etc. are structured on Wallstreet. For the vast majority of these asset classes, the Average Joe masses only collectively own about 1% of any of them. What this guy is backhandedly trying to say is that the other 99% (think pre-mined) are in corporate industry "strong hands" that won't foolishly just sell it all in the event of something bad happening (e.g., stock market correction, black swan event, terrorist attack, etc.). Also these "strong hands" asset products are re-hypothecated and re-leveraged as collateral against other investments. The fear of a massive sell off by thousands or millions of weak, jumpy hands, creating a cascading domino of margin calls, is low. Thus volatility and systemic risk is low.

But Bitcoin is different. 90+% of this asset class got into Average Joe's hands first, before Wallstreet coming in. And once Bitcoin futures and ETF derivatives get created, and then are possibly leveraged against other assets/investments as collateral, that poses a long term systemic risk problem to Peterffy. Because he believes that Average Joes are weak sheeple who are more prone to panic and sell all their bitcoin (the underlying hard asset), which would induce and create massive volatility in futures/derivatives since they hold A LOT of it (actually the MAJORITY of it). He's also worried about the systemic risk to short sellers who may not be able to cover a sudden "to the moon" price rise (e.g., someone is trying to corner the market using massive leverage).

Personally, I believe he is both right and wrong.

He's right about the clearing of bitcoin trades. Wallstreet tends to create their own fkn problems. So Bitcoin should be isolated from all other clearing house products. Available margin should be low. Everything should be fully collateral backed. Leveraging and rehypothecation of Bitcoin derivatives against other investment products should be illegal and not allowed.

But he's wrong and condescending about the masses. I think they have stronger hands than over leveraged Wallstreet does. And during a sudden bearish event, if anything I would hope that the masses would be BUYING more bitcoin, not selling it.

[TwoCorn]

Is this guy just pre-scapegoating for the coming financial crisis which has nothing to do with Bitcoin or cryptocurrencies?

[tunctioncloud]

I do not see how could the fact a scam coin becoming very worthy could crash the entire economy. In fact, the more money will be in a given crypto-currency, the more it will be resistant.

[alani123]

This isn't something notable in my opinion, It's a point trying to be made based on someone's feelings for Bitcoin, but does in no way act as a prediction. I think that it's worth mentioning that cnbc has also been hosting a lot of pro-bitcokn content lately, so it'd might be them trying to balance things out with some irrelevant anti-bitcoin stuff to please viewership.

[Torque]

You guys saying he's FUDing or bearish on Bitcoin, I don't think some of you watched the video.

Let me help you out here. Go to:
https://www.cnbc.com/2017/11/15/thomas-peterffy-keep-bitcoin-away-from-the-real-economy.html

1. Start the video on that page, jump to @3:40

2. Listen carefully to what Thomas Peterffy says

3. Note: He is the Chairman and CEO of Interactive Brokers
https://www.interactivebrokers.com/en/index.php?f=564

4. Connecting the dots yet?  

[Don Pedro Dinero]

actually what he said make a sense,
but it will affect the entire economy ? i doubt that it will.
Bitcoin has not prove its usability wholly because there're a lot of problems that we will face when people starting to adopt it in their real life.
for example the transaction and the fees itself,
what make it so special compared to other is its usability,but if the hype continue while nothing change i believe it'll be bad for Bitcoin itself in the future.
also CME listing is a bad move for Bitcoin right now but at the same time,
it's the trigger for people to know about it.
everything is like double edge sword for Bitcoin,they have their own advantage and disadvantage.

The thing about derivatives, is that they allow you to go short - and the losses could be unlimited because bitcoin is on a tear right now.

If the people who go short are borrowing to do so, and they default, then the lenders are in trouble. And that's where the trouble comes for teh banking system - bad debts.

If big investors want to invest, they'd be better off using an ETF, rather than derivatives. It'll be interesting to see how this plays out.

I am not too worried about the possibility of people opening shorts on bitcoin, which means betting against its rise. Shorts are widely used in the stock market and very rarely affect significantly big companies, like Johnson and Johnson or Coca Cola. Smaller companies can be very affected though. If there are short attacks on bitcoin there will be some downward trends, but bitcoin will get out stronger than ever as it has happened with many threats before.

[audaciousbeing]

Everyone have been expressing their opinion concerning the way they see bitcoin and how it purported to them in their own light. But the way they make it seems just like the constitution where someone will be relying on it to perform and action while the other will be relying on that same constitution to stop that same action. But I would agree with the school of thought against the future trading because that is calling for more speculations to determine the direction of price. Currently, people speculate and it sometimes turn out to be correct, at other times, it turns out to be the wrong one. But with such introduction, it then mean price will be decided based on the feelings of the majority of people while developments in the field of blockchain, adoption of blockchain technology and bitcoin, will contribute lower input into such determination.

[Syke]

But he's wrong and condescending about the masses. I think they have stronger hands than over leveraged Wallstreet does. And during a sudden bearish event, if anything I would hope that the masses would be BUYING more bitcoin, not selling it.

Likely true. Somewhat related, I'd love to see this chart updated on the age of coins:

https://www.reddit.com/r/Bitcoin/comments/2n205b/an_area_chart_showing_the_distribution_of/

[GreatOrchid]

But all this problem is because people can not stop buying anymore, they all are excited because they dont want to be late to the party, and that is the reason of why they are still investing in bitcoin instead of putting all their money into a bank. How would satoshi feel about all those words? he might be one of the most blessed guys on this world because all his goals and visions are now becoming true.
It is amazing guys, i can not realize how fast it is growing everyday, it seems that it will never stop going up

[Dabs]

... I don't think these people are stupid enough to include the so-called scam or shitcoins. Definitely, there can be a big possibility that later on they might include Ethereum and even BitcoinCash but no shitcoins for sure.

You just mentioned a shitcoin. Or two. Not sure.

[fabiorem]

You going to post a [bullish] post at any point, bbc.reporter?

Jus' wonderin'

He/she works for the media, what do you expect?

I hope more future markets adopt bitcoin and altcoins en masse.

These news are bullish. The price will skyrocket. CME is implementing ways to block panic-selling and thus keep the price up.

Billionaries are worried because this is a real threat to the status quo.