why CBOE and CME futures trading may LOWER / SLOW the price of bitcoin.

[Coollikethat]

These futures contracts are the same as Gold futures contracts. First, its all paper and settled in dollars not BTC. More importantly, if you look at the Gold Futures market there are more Gold contracts than gold available: 542 contracts to 1 ounce of gold.   The net effect is artificially keeping gold prices suppressed! If they overhaul that system and settle in real gold or mandate 1 contract per available ounce. gold price would skyrocket!

They are perpetrating the same scheme with BTC paper futures... the net result will like lower the institutional demand for BTC! Not the big upward pressure on price you would expect.  



Here's Why the Gold and Silver Futures Market Is Like a Rigged Casino...

https://www.moneymetals.com/news/2016/05/16/silver-gold-futures-market-000868

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[davis196]

These futures contracts are the same as Gold futures contracts. First, its all paper and settled in dollars not BTC. More importantly, if you look at the Gold Futures market there are more Gold contracts than gold available: 542 contracts to 1 ounce of gold.   The net effect is artificially keeping gold prices suppressed! If they overhaul that system and settle in real gold or mandate 1 contract per available ounce. gold price would skyrocket!

They are perpetrating the same scheme with BTC paper futures... the net result will like lower the institutional demand for BTC! Not the big upward pressure on price you would expect.  



Here's Why the Gold and Silver Futures Market Is Like a Rigged Casino...

https://www.moneymetals.com/news/2016/05/16/silver-gold-futures-market-000868

The only thing that will suppress the bitcoin price is the fact that the big institutional investors will buy btc futures,instead of buying bitcoins.This demand won`t help for increasing the bitcoin price.
I can`t agree completely with your theory about the futures contracts.I think that futures and all the other derivatives are like market gambling.One player bets for a higher asset price is the future,the other player bets for a lower price.It doesn`t matter that the futures contracts are more than the bitcoin mined.
It`s just gambling.

[hase0278]

The only thing that will suppress the bitcoin price is the fact that the big institutional investors will buy btc futures,instead of buying bitcoins.This demand won`t help for increasing the bitcoin price.
I can`t agree completely with your theory about the futures contracts.I think that futures and all the other derivatives are like market gambling.One player bets for a higher asset price is the future,the other player bets for a lower price.It doesn`t matter that the futures contracts are more than the bitcoin mined.
It`s just gambling.

That being said, it will still hinder the progress of the rise of bitcoin. It will surely make a lot of fiat to go towards it that is owned not just by big institutional investors but it will also attract whales as well but it will only be temporary. I like normal gambling on btc gambling sites more though rather than bet with CME futures though. Considering it's effects in the long run, I think it won't be that massive as it will only temporarily draw away investors from btc.

[fabiorem]

The mint certificates, the ETFs, and the coins in an investor’s safe – all of them – are valued, at least in large part, based on the most recent trade in the nearest delivery month on a futures exchange such as the COMEX. These “spot” prices are the ones scrolling across the bottom of your CNBC screen.

CNBC screen, not your bitcoin exchange screen.

This will only affect the price if they incorporate all bitcoin exchanges in their casinos.

Every country that have a (physical) gold exchange have it annexed and controlled by its stock exchange, which in turn is controlled by the State and hence is centralized. From there they have ETFs and futures.

Gold is not a decentralized trading system as bitcoin is, that is the reason why the price is always kept down. You dont have a independent gold exchange, as we have with bitcoin.

The only way they can affect the price is if the hedge funds buy bitcoins themselves and dump it when gambling for low prices in futures. But then theres the whales, and most whales are holders, and some of them just hate the centralized financial system.

[alyssa85]

The only way they can affect the price is if the hedge funds buy bitcoins themselves and dump it when gambling for low prices in futures. But then theres the whales, and most whales are holders, and some of them just hate the centralized financial system.

I'm pretty sure that they're accumulating bitcoins for that purpose. And the hedge funds are bigger than any bitcoin whale -they're bigger than the Winklevoss brothers.

[fabiorem]

The only way they can affect the price is if the hedge funds buy bitcoins themselves and dump it when gambling for low prices in futures. But then theres the whales, and most whales are holders, and some of them just hate the centralized financial system.

I'm pretty sure that they're accumulating bitcoins for that purpose. And the hedge funds are bigger than any bitcoin whale -they're bigger than the Winklevoss brothers.

How much time do you think it will take for them to just destroy it?

The community is not reacting to it, instead it rejoices on ATHs and is not paying attention to the fact we dont have any correction anymore.

[cellard]

These futures contracts are the same as Gold futures contracts. First, its all paper and settled in dollars not BTC. More importantly, if you look at the Gold Futures market there are more Gold contracts than gold available: 542 contracts to 1 ounce of gold.   The net effect is artificially keeping gold prices suppressed! If they overhaul that system and settle in real gold or mandate 1 contract per available ounce. gold price would skyrocket!

They are perpetrating the same scheme with BTC paper futures... the net result will like lower the institutional demand for BTC! Not the big upward pressure on price you would expect.  



Here's Why the Gold and Silver Futures Market Is Like a Rigged Casino...

https://www.moneymetals.com/news/2016/05/16/silver-gold-futures-market-000868

People will not pay attention to prices that are obviously not based on real Bitcoin. Exchanges that remain pure to the real Bitcoin price and don't involve themselves in future will be the market makers, because anyone paying real BTC for the same prices as the manipulated future-market BTC prices is a total retard. If it's not backed up by the underlying asset then the resulting price is never a market maker. Basically it will have no influence on the price. Futures only guide prices when the underlying asset doesn't exist yet (the fork's futures for example). Gold is not BTC.

[European Central Bank]

You can't move, sell, verify or store physical gold without a huge amount of hassle.

There's no point making this comparison.

They stuck a paper market on top of gold as otherwise there basically isn't one.

That's not the case with bitcoin.

[Coollikethat]

You can't move, sell, verify or store physical gold without a huge amount of hassle.

There's no point making this comparison.

They stuck a paper market on top of gold as otherwise there basically isn't one.

That's not the case with bitcoin.

Dude, CME and CBOE are implementing the exact same methodology as gold futures.  The paper contracts are settled in cash. Next to no BTC is involved. Its a moot point.

[richardsNY]

I have seen various scenarios being described by people as to how they think CME will impact this market negatively, but it's empty speculation since we don't know how things will play out. It may also turn out that there won't be much interest from institutional parties at all, which again is empty speculation, but as long as we haven't seen them start trading, everything is and will remain empty speculation. People think to know exactly how things will play out, but we've seen how this market crushes everything they come up with.

[gentlemand]

I have seen various scenarios being described by people as to how they think CME will impact this market negatively, but it's empty speculation since we don't know how things will play out. It may also turn out that there won't be much interest from institutional parties at all, which again is empty speculation, but as long as we haven't seen them start trading, everything is and will remain empty speculation. People think to know exactly how things will play out, but we've seen how this market crushes everything they come up with.

It's the scale and lack of apparatus that will have turned off institutionals. I don't see how anyone could take in the percentages and not drool at the possibilities though of course the bigger it gets the more sluggish it'll be, however right now it really doesn't seem much tamer than when it was in the hundreds.

The more I read about it the less I understand so I'm sitting back and saluting whatever may happen.

[uslfd]

You can't move, sell, verify or store physical gold without a huge amount of hassle.

There's no point making this comparison.

They stuck a paper market on top of gold as otherwise there basically isn't one.

That's not the case with bitcoin.

Dude, CME and CBOE are implementing the exact same methodology as gold futures.  The paper contracts are settled in cash. Next to no BTC is involved. Its a moot point.

Of course you could not make direct comparison with gold. Gold's immovable and expensive to store property indeed makes it different from BTC. because it means for example, it will cost you approx 1% to hold gold but holding real BTC is not as nearly as expensive.
BTC's easy to move nature also means any anomalies in the futures market could also easily be arbitraged away.

[cindygirl]

Excuse me for maybe being a bit slow but can someone explain to me what it is that I have missed, to my mind a futures contract is just an agreement to buy/sell at a later point in time for a set price and so bitcoin will then be transfered at that date? How is that feasible without involving bitcoin?

[European Central Bank]

Dude, CME and CBOE are implementing the exact same methodology as gold futures.  The paper contracts are settled in cash. Next to no BTC is involved. Its a moot point.

any trader anywhere can immediately and instantly take delivery of their bitcoin wherever they are in the world 24/7. they'll know it's real, it can be verified, no one can take it off them, it can't be faked.

no gold trader has ever had that option anywhere ever. it's impossible to achieve. they've always had nothing but promises and may never have touched or seen any real gold in a lifetime of trading it. this was long before stuff like gold etfs arrived. it's always been that way.  

that makes it a totally different proposition. i don't think enough wall street guys realise this. they might think it's just another thing you can use to pull the wool over everyone's eyes. it's pretty much the first and only thing that doesn't allow that which is why it's such a big deal.

[Coinnosaurus]

I have seen various scenarios being described by people as to how they think CME will impact this market negatively, but it's empty speculation since we don't know how things will play out. It may also turn out that there won't be much interest from institutional parties at all, which again is empty speculation, but as long as we haven't seen them start trading, everything is and will remain empty speculation. People think to know exactly how things will play out, but we've seen how this market crushes everything they come up with.

Still can't get why you're reading/posting on this board ??

[Syke]

Excuse me for maybe being a bit slow but can someone explain to me what it is that I have missed, to my mind a futures contract is just an agreement to buy/sell at a later point in time for a set price and so bitcoin will then be transfered at that date? How is that feasible without involving bitcoin?

This are "cash-settled". That means they're really just betting on the price. Neither side buys any bitcoins.

http://www.wikinvest.com/wiki/Cash_settlement

[fabiorem]

Dude, CME and CBOE are implementing the exact same methodology as gold futures.  The paper contracts are settled in cash. Next to no BTC is involved. Its a moot point.

any trader anywhere can immediately and instantly take delivery of their bitcoin wherever they are in the world 24/7. they'll know it's real, it can be verified, no one can take it off them, it can't be faked.

no gold trader has ever had that option anywhere ever. it's impossible to achieve. they've always had nothing but promises and may never have touched or seen any real gold in a lifetime of trading it. this was long before stuff like gold etfs arrived. it's always been that way.  

that makes it a totally different proposition. i don't think enough wall street guys realise this. they might think it's just another thing you can use to pull the wool over everyone's eyes. it's pretty much the first and only thing that doesn't allow that which is why it's such a big deal.

True. But I'm still worried if they dont have any new trick to play with.

And if they had actually bought bitcoin and are being responsible for the current pump? There's no correction, its only rising and rising. They can just dump it, as any whale can, except that they have 100x more money than any whale.

[Rahar02]

I don't think so, bitcoin futures won't slow down the increases in bitcoin price.
Bitcoin futures is a place to gamble about bitcoin price for a certain time-stamp based on Bitcoin Reference Rate which calculates from some big exchanges such as Bitstamp, Gdax, itBit, and Kraken. These exchanges are the real market makers, and bitcoin futures contract's holders will bet whether it's going up or fall down, while the price constantly rises, it's an obvious guess.
For investors who bet it will rise, they will buy more and more bitcoin to make sure they will win the contract.

[thecodebear]

Yeah Bitcoin Futures is not going to slow Bitcoin down. It's for people who don't want to participate in the real bitcoin markets and just want to gamble on the price. People always bring up gold being held down by gold futures. Bitcoin and gold are quite different. Gold was already controlled by the banks, which is what made it possible to control the price. Wall St doesn't control the Bitcoin supply. Because trading physical gold is unreasonable the gold paper markets was the only way to price gold, so its these markets that the price is based off of. Whereas with Bitcoin the "paper markets" aka futures will just be keying off the real Bitcoin price, not dictating it. It's just Wall St looking to gamble off a price ticker so they can make money from each other, nothing more.

[fabiorem]

https://www.investopedia.com/terms/l/leverage.asp

Leverage is playing with money you dont have.

You just borrow it from the house and put it in some asset.

In a bear market, leverage is used to short positions quickly.

But as it happens with gold, the house need to hold the asset in custody so that shorting would affect its price.

Notice the constant pump recently, only green candles and no correction. This is not the behaviour of our usual whales.

This is the behaviour of someone who received a green light to buy and is covering a lot of positions, rising the price up. In other words, the hedge funds themselves are buying bitcoin to hold it in custody, as digital gold.

However, the difference here is that most gold is held in custody, by States, by banks and stock markets, whereas bitcoin is hodled by its users. Most of the bitcoins are not on the exchanges, and the limited supply keeps the price rising.

Now, lets imagine a hedge fund buy one million dollars of bitcoins in Bitstamp, for example (I dont know if it is the fund or CME itself who buys it, but lets suppose its the fund). They hold it in custody, then bet for a fall in CME, using 10x leverage, that is, they borrow 9 million dollars and bet on half the current price.

Then, they dump their coins in Bitstamp, for half the price they bought for. The weak hands panic and sell their coins, some hodlers get out of their hideouts and throw some of their coins too. The price drops to half, the fund win the bet, and get 10 million dollars. They can use one of these to buy bitcoin again, so the price will pump one more time, the same way its pumping now, only green candles.

Now, I doubt one million dollars would make a difference, but these funds have millions at their disposal.

I dont know if the whales know about such mechanisms, but people should be informed about what the sharks can do using their instruments. They can margin-trade with higher values than in any bitcoin exchange, and they will settle it in cash. However, someone needs to buy the supply. Limiting the supply might reduce the shorting effects, and those funds can lose their bets and get rekt, but for this people should be hodling, even in the face of a quick fall.