Since learning about how the btc futures work, I am less bullish on the matter. They are cash settled meaning they are just bets and arent every settled against real bitcoins. Each owner has a brokerage account that is restricted to them that holds their bets. At the end of the trades the exchange uses bitcoin's price on real exchanges as an imaginary reference rate to settle the bets. Its like betting on horses. Those with losing bets pay those with winning bets - but never are real bitcoins actually touched - no clearinghouse is ever going to buy from bitstamp, etc. in relation to futures. I cant think of a way to arbitrage either, since futures cant be transferred away from their owner.
Futures are a trick and are not actually increasing the public's exposure to bitcoin at all.
Here is the potentially bearish take:
What is the limit on the futures? It has nothing to do with the amount of real bitcoins, since there is no settlement with real bitcoins. There could be billions of these futures. So essentially we have a limitless number of worthless imaginary coins being dumped to all wannabe bitcoin investors instead of them buying real bitcoins. Futures are keeping traders who were interested in buying real bitcoins on real exchanges, instead buying imaginary bitcoins on imaginary exchanges where they support the banks. It is effectively keeping them OUT of the bitcoin ecosystem right where the banks want them. Meanwhile our market cap of real bitcoins is not increasing at all. In fact we might even be having some of our traders SELLING and LEAVING so that they can trade on more reliable futures exchanges.
YES. I am thinking the same thing.
Question: Does money rush into the futures as soon as they start trading (Sunday night!) and bitcoin itself drops?
We are about to crash, I just figured we might have a little more time.
