Big Money Is Betting On A Bitcoin Price Collapse (BTC)

[imolivia1984]

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event.

While it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world’s most popular cryptocurrency has stagnated since the beginning of December when first the Cboe then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000.

And while bitcoin futures markets volumes have been lower than most had expected, the past 4 weeks have provided enough data to observe how volumes and open interest have evolved.

We discussed previously  that Bitcoin futures were off to a slow start in the first week of trading, with volumes of CBOE Bitcoin futures averaging just around $40MM per day, despite intense media hype helping fuel heavy trading when both contracts launched, at least in the first hours of trading.

Since then, volumes spike briefly in the following week coinciding with the launch of the CME futures, with volumes of on both exchanges at relatively similar levels.

Then, as JPM’s Nikolaos Panagirtzoglou shows, after a spike in volumes to around $200mn on 22 December, which saw sharp swings in underlying Bitcoin prices, volumes have averaged around $50mn and $60mn per day on the CBOE and CME futures, respectively.

[HabBear]

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event.

While it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world’s most popular cryptocurrency has stagnated since the beginning of December when first the Cboe then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000.

And while bitcoin futures markets volumes have been lower than most had expected, the past 4 weeks have provided enough data to observe how volumes and open interest have evolved.

4 weeks of data isn't enough to draw a conclusion between the availability of bitcoin futures and the general new interest created by that news. The CBOE and CME transactions are not linked to the blockchain, therefore there is zero direct correlation or causal relationship between futures activity and bitcoin price.

It takes a 1 week for new accounts to get verified to produce new investments, how can you make assumptions based on just 4 weeks of data?

There's greater evidence available that the recent dip in Bitcoin was caused by Jamie Dimon saying "I like it now" than anything related to futures. Obviously I'm kidding about Dimon's comments, but every time he criticized Bitcoin in the past we saw a rally. The reality is that rumors from China and S. Korea about bans on the cryptocurrency is what's keeping the price down. This is evidenced by the fact that the news from S. Korea today that they won't ban Bitcoin has coincided with a $1,000 price surge.

The 30% drop ($6,500) off the high is typical in Bitcoin...we've seen those swings through out all of 2017.

You don't explain anywhere why you believe "big money is betting on a bitcoin price collapse", do you plan to share that point of view in a future post?

[Xavofat]

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event.

Personally, I'd say that the less volume there is on futures exchanges the better.  Since the trades are settled in fiat and there's no use of crypto in the process, it doesn't make much sense for something which is at least supposed to be a currency.

However, now that futures are available it gives major organisations an easier option to manipulate the market.  It would be a lot harder to trade huge amounts on typical Bitcoin exchanges, especially when shorting or margin trading.

Since they have a better opportunity to bet on a price collapse and yet the volume on futures exchanges is low, doesn't that mean that "big money" is not betting on a Bitcoin price collapse?

[sirkings0003]

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event.

While it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world’s most popular cryptocurrency has stagnated since the beginning of December when first the Cboe then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000.

And while bitcoin futures markets volumes have been lower than most had expected, the past 4 weeks have provided enough data to observe how volumes and open interest have evolved.

We discussed previously  that Bitcoin futures were off to a slow start in the first week of trading, with volumes of CBOE Bitcoin futures averaging just around $40MM per day, despite intense media hype helping fuel heavy trading when both contracts launched, at least in the first hours of trading.

Since then, volumes spike briefly in the following week coinciding with the launch of the CME futures, with volumes of on both exchanges at relatively similar levels.

Then, as JPM’s Nikolaos Panagirtzoglou shows, after a spike in volumes to around $200mn on 22 December, which saw sharp swings in underlying Bitcoin prices, volumes have averaged around $50mn and $60mn per day on the CBOE and CME futures, respectively.

Surely there would be fluctuations of bitcoin price, but the price will not clash like below $10,000. I believe the present challenge facing bitcoin right now is the high cost of processing fee.

[bitart]

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event.

Personally, I'd say that the less volume there is on futures exchanges the better.  Since the trades are settled in fiat and there's no use of crypto in the process, it doesn't make much sense for something which is at least supposed to be a currency.

However, now that futures are available it gives major organisations an easier option to manipulate the market.  It would be a lot harder to trade huge amounts on typical Bitcoin exchanges, especially when shorting or margin trading.

Since they have a better opportunity to bet on a price collapse and yet the volume on futures exchanges is low, doesn't that mean that "big money" is not betting on a Bitcoin price collapse?

There should not be a really direct effect on the crypto prices if there are trades on the futures exchanges... Bitcoin is now traded and bought by average people too, there are a lot of newcomers who has no idea about the basics of bitcoin... They have seen it on TV or heared it from the neighbours so most of them have no idea about the normal exchanges, so they surely won't follow the actions on the futures markets... The only thing that can make the futures exchanges to have direct effect on bitcoin price is the media, if the big financial sites will start to predict the bitcoin price, based on the futures market, and this way the average people will do what the big news sites suggest them. This way, no matter how little is the trading volume on the futures, they can have huge impact on the bitcoin price...

[soham]

That probably is, but we should not also forget the scaling issue that bitcoin network is facing since last few weeks. Bitcoin future contract is not directly impacting the bitcoin market because those money is not directly coming to the bitcoin market, even though big money is betting for the lower price.

The impact we are seeing is mainly because of the scaling issue. The incapabilities of bitcoin network is now wide open to the market and a lot of people have shifted big money out of bitcoin to some other cheaper options, especially the frequent transactors. that's the reason why bitcoin is rapidly loosing its market cap as well as dominance. If we can't quickly start taking care of this scaling issue, bitcoin is going to die a slow death.

[squatter]

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event.

While it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world’s most popular cryptocurrency has stagnated since the beginning of December when first the Cboe then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000.

As I remember things, the price rose significantly when CBOE futures were launched. By and large, people were expecting a similar event when CME futures launched. Appropriately, CME traders shorted the top and the market dumped. They did it on high volume too (at least when compared to the trading sessions that followed).

I wouldn't read that as betting on a "price collapse," though. It was just the path of maximum pain. Most traders lose money, so the market follows the path of maximum pain. Everyone expected the price to go exponentially higher and many bought near the top. That market exuberance got punished. I think the "smart money" was just shorting the top. And if they're smart, they know they can't suppress Bitcoin's price. It's much smarter to ride the waves.

[MiningSensei]

And they are always the FIRST people who is always dumping cheap coins when the price starts going down,
i am in a few telegram groups, and i can not describe how disgusting it was to see how many newbies were saying that bitcoin was going to die because of a little dip.

There should not be a really direct effect on the crypto prices if there are trades on the futures exchanges... Bitcoin is now traded and bought by average people too, there are a lot of newcomers who has no idea about the basics of bitcoin.

The futures were a bad idea.. and we all knew that from the very, very beggining, anyway, they pumped and dumped the price, maybe it was all a huge scenario to make quick profit.

As I remember things, the price rose significantly when CBOE futures were launched. By and large, people were expecting a similar event when CME futures launched. Appropriately, CME traders shorted the top and the market dumped

My theory, is that they are still manipulating the price.

[drfugazi]

And they are always the FIRST people who is always dumping cheap coins when the price starts going down,
i am in a few telegram groups, and i can not describe how disgusting it was to see how many newbies were saying that bitcoin was going to die because of a little dip.

There should not be a really direct effect on the crypto prices if there are trades on the futures exchanges... Bitcoin is now traded and bought by average people too, there are a lot of newcomers who has no idea about the basics of bitcoin.

The futures were a bad idea.. and we all knew that from the very, very beggining, anyway, they pumped and dumped the price, maybe it was all a huge scenario to make quick profit.

As I remember things, the price rose significantly when CBOE futures were launched. By and large, people were expecting a similar event when CME futures launched. Appropriately, CME traders shorted the top and the market dumped

My theory, is that they are still manipulating the price.

So what will be the next steps according to your theory? Any bull run to 40k incomming soon?
Its a long time of moving sideways by now..

[Shrinath]

While it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world's most popular cryptocurrency has stagnated since the beginning of December when first the CBOE then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000. [The future of Bitcoin contract is not directly impacting the bitcoin market because the projected funds are yet to reach the direct bitcoin market. However, big money is betting for the lower price. The impact we are seeing is mainly because of the scaling issue. The incapabilities of bitcoin network is now wide open to the market and a lot of people have shifted big money out of bitcoin to some other cheaper coins, especially the frequent transactors. That's the reason why bitcoin is rapidly loosing its market cap as well as the dominance in the crypto world. Ten years ago Bitcoin didn't exist. Five years ago they cost $12 each. 12 months ago they were almost $857 and just last month they were worth almost $20,000 each. Then they crashed. Since December's high Bitcoin's price has halved - losing more than $9,500 in value - in the past day alone $3,000 has been wiped from the price. That's a fall of 25% in a day, 37% in a week and more than 50% in the past month, according to Coinbase figures.

[BartS]

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event.

Personally, I'd say that the less volume there is on futures exchanges the better.  Since the trades are settled in fiat and there's no use of crypto in the process, it doesn't make much sense for something which is at least supposed to be a currency.

However, now that futures are available it gives major organisations an easier option to manipulate the market.  It would be a lot harder to trade huge amounts on typical Bitcoin exchanges, especially when shorting or margin trading.

Since they have a better opportunity to bet on a price collapse and yet the volume on futures exchanges is low, doesn't that mean that "big money" is not betting on a Bitcoin price collapse?

It may give to them a way to manipulate the price that is correct, but right now I see no evidence of it, most of the reduction in the price has to do with events related to bitcoin and cryptocurrencies and not with the future markets, threats of bans coming from different countries, a hack, and simply no hype around bitcoin have made the price to drop, I do not see anything that suggest me all of this is happening due to manipulation.