Bitcoin price suppression - futures volume vs spot volume

[brainactive]

Prior to 2017, there was no futures market for Bitcoin and all trades were 100% spot.

Now, futures volume for Bitcoin is up to 10x the spot volume.

The silver market is also notorious for having a large futures/paper market compared to physical and is likely one of the reasons why silver prices are able to be suppressed.

Is Bitcoin going to suffer the same fate as silver, with prices being suppressed in the coming years? Will Bitcoin-futures-backed-ETFs be the nail in the coffin?

Thoughts? Keen to hear any arguments against this view.

[mk4]

I don't think futures necessarily "suppress" prices; I think it just makes the markets a lot more sort of "dramatic" than it should be.

And no, I don't think ETF will be "the nail in the coffin". Though it will definitely help A LOT with market liquidity. It will be significantly harder to move the price to either direction if enough money comes in.

[leea-1334]

That does not sound right OP. I came into Bitcoin in 2017 (maybe a bit earlier but 2017 was when I had my own first real wallet) and I am very very sure there were already big news about futures markets and a lot of people placing bets on futures.

Maybe at the time there was no "official" futures platforms but online I even remember on Ethereum there were many betting Dapps with Bitcoin futures betting.

Some tokens also have the same futures being bigger than their actuals and their prices are not being suppressed

[Wind_FURY]

I don't think futures necessarily "suppress" prices; I think it just makes the markets a lot more sort of "dramatic" than it should be.

And no, I don't think ETF will be "the nail in the coffin". Though it will definitely help A LOT with market liquidity. It will be significantly harder to move the price to either direction if enough money comes in.

I believe it is possible that an army of short-sellers can suppress the price, and probably also crash it. BUT it also goes to the other direction too. Short-sellers can also be short-squeezed once an army buyers, spot or futures, start to buy.

OP, do actually believe short-sellers will, or can, short and suppress Bitcoin forever?

[brainactive]

I don't think futures necessarily "suppress" prices; I think it just makes the markets a lot more sort of "dramatic" than it should be.

And no, I don't think ETF will be "the nail in the coffin". Though it will definitely help A LOT with market liquidity. It will be significantly harder to move the price to either direction if enough money comes in.

I believe it is possible that an army of short-sellers can suppress the price, and probably also crash it. BUT it also goes to the other direction too. Short-sellers can also be short-squeezed once an army buyers, spot or futures, start to buy.

OP, do actually believe short-sellers will, or can, short and suppress Bitcoin forever?

Unsure, hence the question. I do know the banksters are ruthless and they've done it before with silver which has been suppressed for many decades (and still is). But silvers paper market is many multiples the nonpaper market (more than 100x). If bitcoins futures market gets bigger relative to spot market, then perhaps it could suffer the same fate. Hoping it doesn't get to that stage though.

[mk4]

Unsure, hence the question. I do know the banksters are ruthless and they've done it before with silver which has been suppressed for many decades (and still is). But silvers paper market is many multiples the nonpaper market (more than 100x). If bitcoins futures market gets bigger relative to spot market, then perhaps it could suffer the same fate. Hoping it doesn't get to that stage though.

It theoretically can; but like what Wind_FURY said, it can go both ways. I'm definitely not buying that it will have the same fate though. I'd imagine that they'd be FAR more wary of shorting bitcoin in longer time frames simply due to the fact that bitcoin has been notorious of large upward price spikes. I'd imagine that if huge entities would short bitcoin, it would only be through using FUD in far shorter time frames.

I mean, look, we had another flooding of China "ban" news 30 minutes ago lol.

[Wind_FURY]

I don't think futures necessarily "suppress" prices; I think it just makes the markets a lot more sort of "dramatic" than it should be.

And no, I don't think ETF will be "the nail in the coffin". Though it will definitely help A LOT with market liquidity. It will be significantly harder to move the price to either direction if enough money comes in.

I believe it is possible that an army of short-sellers can suppress the price, and probably also crash it. BUT it also goes to the other direction too. Short-sellers can also be short-squeezed once an army buyers, spot or futures, start to buy.

OP, do actually believe short-sellers will, or can, short and suppress Bitcoin forever?

Unsure, hence the question. I do know the banksters are ruthless and they've done it before with silver which has been suppressed for many decades (and still is). But silvers paper market is many multiples the nonpaper market (more than 100x). If bitcoins futures market gets bigger relative to spot market, then perhaps it could suffer the same fate. Hoping it doesn't get to that stage though.

Perhaps would be the best word, and honestly, yes the “ruthless” bankers “could” suppress it. BUT why suppress it if the “ruthess bankers” can make more fiat by letting it surge. Plus why build, and develop a futures market just to “suppress” it? They built the futures market because they wanted some way to join us to the moon.

[DarkDays]

I don't think futures necessarily "suppress" prices; I think it just makes the markets a lot more sort of "dramatic" than it should be.

Generally, yes, this should be the case but considering the Tweeter news yesterday and how the market only nudged a little, it is hard to believe that futures market makers was not surpassing the market...

Could also have been that the price was already factored in for the news, but still this is the second piece of news after Tesla that should have sent BTC and all markets onto a rampage.

Yet, somehow this had very little effect, and now the same China news is very conveniently (and if I may add in a very timely fashion) sent the markets onto a massive dump. This is a great buying opportunity but still this 'old China FUD' is just ongoing....

[brainactive]

Perhaps would be the best word, and honestly, yes the “ruthless” bankers “could” suppress it. BUT why suppress it if the “ruthess bankers” can make more fiat by letting it surge. Plus why build, and develop a futures market just to “suppress” it? They built the futures market because they wanted some way to join us to the moon.

Why are the bankers suppressing silver when they could let it surge and join us to the moon?

[MarkWal36]

Perhaps would be the best word, and honestly, yes the “ruthless” bankers “could” suppress it. BUT why suppress it if the “ruthess bankers” can make more fiat by letting it surge. Plus why build, and develop a futures market just to “suppress” it? They built the futures market because they wanted some way to join us to the moon.

Why are the bankers suppressing silver when they could let it surge and join us to the moon?

The answer to this question is simple "greed and profit",They're basically keeping the silver price down to stop the ongoing flight to precious metals and in doing so prevent the dollar from crashing.

for a more detailed explanation you should read this article

[electronicash]

it should be able to suppress the price since the banks and institutions have a huge amount of coins enough to dump in the crypto exchanges when they short in the futures market. its been done before in the gold and silver market making these not appealing to the small investors. Bitcoin ETF is not even a real BTC. it becomes easier for the price to suppress if the companies today like Paypal become a futures/derivative exchange of crypto.

[Hippocrypto]

Prior to 2017, there was no futures market for Bitcoin and all trades were 100% spot.

Now, futures volume for Bitcoin is up to 10x the spot volume.

The silver market is also notorious for having a large futures/paper market compared to physical and is likely one of the reasons why silver prices are able to be suppressed.

Is Bitcoin going to suffer the same fate as silver, with prices being suppressed in the coming years? Will Bitcoin-futures-backed-ETFs be the nail in the coffin?

Thoughts? Keen to hear any arguments against this view.

Basically FUD and negative news started to take a strong factors that made this current situation really hard to overcome. Every individuals had doubts that price will survive and recover successfully, but for my personal point of views I wanted to remain strong despite of those hearsays. Hopefully, it's not that worst in the next few days and we will see bitcoin soars higher all over again.

[brainactive]

Basically FUD and negative news started to take a strong factors that made this current situation really hard to overcome. Every individuals had doubts that price will survive and recover successfully, but for my personal point of views I wanted to remain strong despite of those hearsays. Hopefully, it's not that worst in the next few days and we will see bitcoin soars higher all over again.

The thing I always seem to hear from people is "Look at the past, Bitcoin has always crashed hard but it always came back stronger than ever."

This ignores the fact that in 2009-2017 there was no futures market. Post 2017, there was a futures market. And as at 2021, it is now 10x as big as spot (for every $1 traded on spot exchanges, $10 is traded in futures) and the trend seems to be increasing. We are seeing a bigger and bigger paper market. And this makes price suppression a real threat. We know the banks don't like bitcoin. All the bitcoin maxis are like "there's nothing the banks can do to stop bitcoin". I reckon they can. They can use the futures market.

[Wind_FURY]

Perhaps would be the best word, and honestly, yes the “ruthless” bankers “could” suppress it. BUT why suppress it if the “ruthess bankers” can make more fiat by letting it surge. Plus why build, and develop a futures market just to “suppress” it? They built the futures market because they wanted some way to join us to the moon.

Why are the bankers suppressing silver when they could let it surge and join us to the moon?

I don’t know. They probably hate Silver because they’re HODLing Gold? Or there’s probably low physical demand for Silver, and therefore also as an investment? I don’t care “why”, and IF they suppressed Silver, but I would like to see more of your research about this. Tin-foil hats on.

 

[mk4]

Why are the bankers suppressing silver when they could let it surge and join us to the moon?

Maybe it's just because there's a lot less demand for silver than silver holders think, and that bankers deliberately suppressing silver is simply just a tinfoil-hat take.

[SquallLeonhart]

The thing I always seem to hear from people is "Look at the past, Bitcoin has always crashed hard but it always came back stronger than ever."

This ignores the fact that in 2009-2017 there was no futures market. Post 2017, there was a futures market. And as at 2021, it is now 10x as big as spot (for every $1 traded on spot exchanges, $10 is traded in futures) and the trend seems to be increasing. We are seeing a bigger and bigger paper market. And this makes price suppression a real threat. We know the banks don't like bitcoin. All the bitcoin maxis are like "there's nothing the banks can do to stop bitcoin". I reckon they can. They can use the futures market.

What changed then? I mean yeah between 2009-2017 there were no futures market and we grew a lot, sure that part is true, but what changed? Didn't we increased a ton since 2017 as well? The start of 2017 was 700 dollars, and peak of 2017 was nearly 20k dollars, where are we now? We are over 40k and we have went over 60k as well. So all in all I would say that even with the futures market we are doing fine, there is nothing that we should be sad about the futures market.

I understand that it is not really that much of a problem but at the end of the day it does give incentives to drop the price, that part is much true. I mean that doesn't mean that it is all bad, but I would say there are bad parts about it, I agree to that.

[davis196]

The Bitcoin futures market exists since 2017.
The Bitcoin price increased from a few thousand dollars back in 2017 to 60K USD in the spring of 2021.
Does that look like a Bitcoin price suppression?I don't think so.
If too many futures traders are shorting the price of Bitcoin,then a "short squeeze" might happen(theoretically).Many traders will start buying BTC on the spot market and pumping the price,therefore the BTC futures will be "out of the money" so the traders,who are shorting BTC will dump the futures and buy BTC on the sport market,leading to a bigger pump.I know that the BTC market is different than the stocks market,but such thing can happen.
I have always hated all the financial derivatives and especially Bitcoin futures.We don't need this BS.
If anyone wants to bet on the Bitcoin price,buying BTC directly is the best option.

[palle11]

I don't expect bitcoin rising volume to be suppressed either because of futures trading. IMO it will rise more because it is other means to trade in bitcoin apart from spot or hodling. Some forex brokers have btc/USD pairs on their platform but it is not activated for trade yet. In this too I think if most forex brokers begin the trading of bitcoin pairs just like binance  and other crypto exchanges, the volume will increase and not suppressed.

[sana54210]

What changed then? I mean yeah between 2009-2017 there were no futures market and we grew a lot, sure that part is true, but what changed? Didn't we increased a ton since 2017 as well? The start of 2017 was 700 dollars, and peak of 2017 was nearly 20k dollars, where are we now? We are over 40k and we have went over 60k as well. So all in all I would say that even with the futures market we are doing fine, there is nothing that we should be sad about the futures market.

I understand that it is not really that much of a problem but at the end of the day it does give incentives to drop the price, that part is much true. I mean that doesn't mean that it is all bad, but I would say there are bad parts about it, I agree to that.

The change is the amount. You are 100% right about what you said, however the psychology of people changed because of the price. When it is few thousand dollars then people do assume 2x is easier, so from 3k to 6k sounds easier, and if it is 5 tk 10k that is still easier, or even 9k to 18k could become relatively easy. However when you are at 40k, it is harder to reach to 80k, or at least that is how people assume which is not half wrong but not fully right neither.

So, now futures have a lot easier time to make it go down because going higher is something that "sounds" difficult. From 40k to 50k sounds a lot harder than from 4k to 5k, which is why whales that want to drop the price can do it easier because convincing people is easier.

[brainactive]

What changed then? I mean yeah between 2009-2017 there were no futures market and we grew a lot, sure that part is true, but what changed? Didn't we increased a ton since 2017 as well? The start of 2017 was 700 dollars, and peak of 2017 was nearly 20k dollars, where are we now? We are over 40k and we have went over 60k as well. So all in all I would say that even with the futures market we are doing fine, there is nothing that we should be sad about the futures market.

I understand that it is not really that much of a problem but at the end of the day it does give incentives to drop the price, that part is much true. I mean that doesn't mean that it is all bad, but I would say there are bad parts about it, I agree to that.

The change is the amount. You are 100% right about what you said, however the psychology of people changed because of the price. When it is few thousand dollars then people do assume 2x is easier, so from 3k to 6k sounds easier, and if it is 5 tk 10k that is still easier, or even 9k to 18k could become relatively easy. However when you are at 40k, it is harder to reach to 80k, or at least that is how people assume which is not half wrong but not fully right neither.

So, now futures have a lot easier time to make it go down because going higher is something that "sounds" difficult. From 40k to 50k sounds a lot harder than from 4k to 5k, which is why whales that want to drop the price can do it easier because convincing people is easier.

I agree with everything sana54210 said. The only thing I would add is, the other thing that changed is the volume of futures vs spot. It's not just a matter of whether there is a futures market that allows suppression. It also depends on the relative weight of futures to spot. Back in 2017, yes there was a futures market but it was tiny, in fact the futures volume was less than spot volume back then. Now, the futures volume is 10 times as big as the spot volume, making suppression easier. The trend is only continuing to widen.