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Author Topic: CME Bitcoin Futures  (Read 212 times)
Admired
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December 06, 2017, 10:52:16 AM
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Can someone explain to me how this will drive the price of btc higher? So if futures allow two parties to exchange an asset at a specified price at an agreed upon date in the future and the settlement is made in cash how is bitcoin having any sort of impact on how this impacts the price? I guess because the asset (btc) is being traded???
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December 06, 2017, 01:48:35 PM
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No, you are correct in your questioning of it. It won't have any direct effect on Bitcoin prices. Futures is just moving cash around while betting on the price of the Bitcoin markets. Futures market doesn't have a price of its own and no bitcoin is being traded. It's literally just gambling on Bitcoin's price. Like betting on a horse race, you don't affect the outcome of the race, you just try to make money betting on the outcome.

Some people think Wall St will buy up a bunch of Bitcoin (or already are) and then short sell in the futures and then dump all their bitcoin in an effort to try to crash the price so that their futures short prices get hit and then they can pick up money on the futures market. And then keep doing that - buying bitcoin, buying short futures, dumping bitcoin, selling futures for gains, repeat. People think they will be able to do this because banks have apparently done this in the gold futures market. Though these people don't understand that banks already had the gold market cornered which is why they could do this, and in gold the paper market is what drives the price. While in Bitcoin obviously Wall St or the banks will only be able to get their hands on a tiny bit of the Bitcoin out there, and the futures have no price of their own and simply take their cue from the actual Bitcoin prices.

Though the indirect effect is that having a regulated futures market makes Wall St investors, and apparently the SEC, feel more comfortable with Bitcoin for whatever reason. So Futures should lead to the stuff that will actually affect Bitcoin and rise the prices, like direct hedge fund investing and ETFs.



tl;dr
It will have no direct effect. But net indirect effect should be very positive as it should lead to Wall St entering Bitcoin big time!
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December 06, 2017, 08:33:14 PM
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Can someone explain to me how this will drive the price of btc higher? So if futures allow two parties to exchange an asset at a specified price at an agreed upon date in the future and the settlement is made in cash how is bitcoin having any sort of impact on how this impacts the price? I guess because the asset (btc) is being traded???

btc rising without CME ,  CME may add more speed to bitcoin price and can see daily price update.
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December 06, 2017, 08:44:18 PM
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What? what do you mean by adding more speed to the network? do you know what a future contracts provider is? i guess that you dont.

btc rising without CME ,  CME may add more speed to bitcoin price and can see daily price update.

They are not going to add speed to the network, if you are trying to mean "price" the it is not going to happen too. because they are not going to buy bitcoin directly.

The ones who are going to buy bitcoin are the ones who invest through those futures, if the do not buy those future contracts, then they are not buying bitcoin, which is the same as nothing.


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gentlemand
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December 07, 2017, 01:27:34 AM
 #5

This is a good little summary that popped up recently - https://medium.com/@whalecalls/q-a-upcoming-cboe-bitcoin-futures-eccaea851a13

I still don't understand anything about it so I'll let others read it and take what they wish from it.

Cash settled means none of it touches Bitcoin but the incentive for them to have direct moves on the market must surely be overwhelming. Whether they're allowed to do it is another matter. Perhaps they'll do it through proxies.

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