Bitcoin Futures/Wall St.

[fatalbert]

We need to spread the word and F Wall st.

Futures are going to start trading on it Sunday night. These futures are cash settled. This means they are not connected to BTC in anyway. Like 0.0000%. They are just trading fiat aka making fiat bets on BTC's actual price. So they have endless fiat dollars to short their futures down to $0.

But here's there beauty. If tons of us stay HODL and completely ignore the futures price, futures price can be down 50% and BTC on say coinbase can be plus 20%. This would be all over the evening news and expose Wall St. for the sham it is.

Spread the word.

Example: Someone makes a billion $ bet BTC will be $5,000 Dec 31st. They are trying to effectively short BTC. If BTC on coinbase/exhanges is $10,000 on Dec 31st. This person who made the bet just has to pay the difference between $5,000 (their bet) and BTC physical price of $10,000. So they owe $5K in fiat. (Edit: $5k per unit, so millions/billions)

It's a way to manipulate a currency/asset etc, because people think the futures is an actual price or indicator. It is neither, it is a bet is all.If everyone stayed HODL, Wall. St. would get destroyed.

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[Voice-Of-Reason]

right right

So the same guys making the bets would never buy bitcoin during the days prior to these Futures releases to dump them after right?

Did you think that the people who would make bets in the billions would not use a couple of millions to manipulate the btc market?

The market cap is still too low and very easily manipulated...

[cupronickel]

right right

So the same guys making the bets would never buy bitcoin during the days prior to these Futures releases to dump them after right?

Did you think that the people who would make bets in the billions would not use a couple of millions to manipulate the btc market?

The market cap is still too low and very easily manipulated...

Dead right. But whilst I expect a shake out & weak hands will be bought out. Wall Street hunts profit like a pack of hyenas. The o/p's answer is correct. Just hodl through it all. We may be facing a bearish winter. The coming weeks will be interesting, just hold your nerve.

[Iranus]

Right, so you're suggesting that people pay a price that's 70% more than where they can easily get it elsewhere?

It only takes a very small number of people to do arbitrage trading before your idea gets blown out of the water.  It's impossible for everyone to abide by this - even if it's theoretically possible, it won't get anywhere.

BTC can be manipulated in the same way that any other asset.  There's also no guarantee that it's not being manipulated to make the price rise rather than fall.

[DannyHamilton]

Example: Someone makes a billion $ bet BTC will be $5,000 Dec 31st. They are trying to effectively short BTC. If BTC on coinbase/exhanges is $10,000 on Dec 31st. This person who made the bet just has to pay the difference between $5,000 (their bet) and BTC physical price of $10,000. So they owe $5K in fiat.

Nope.  That's not right.

If they "make a billion $ bet BTC will be $5,000 Dec 31st" then (depending on exactly what you mean by "make a bet") they probably have a contract to sell 200,000 units at $5000.  If the exchange price  is $10,000 on Dec 31st, then they need to pay the difference PER UNIT.  They don't just owe $5k in fiat.  They owe $1 BILLION in fiat.

[fatalbert]

Yes, per unit. You are correct. And I kinda mixed options (on the futures) in the description too but hopefully people get the point.

[DannyHamilton]

Yes, per unit. You are correct. And I kinda mixed options in the description to but hopefully people get the point.

Short positions can be VERY dangerous...

The interesting thing about short positions is that they have limited profits (Bitcoin value won't drop below $0), but they have unlimited losses (Bitcoin can always go higher).

Unlike a long position in the underlying asset directly...

The enthusiasm and exuberance of a rising market ALWAYS has the potential to reach beyond the limits of your financial resources when you take a short position in a derivative