how could they weave the fate of bitcoin into derivitives? there is no paper market for bitcoins, even JPM couldn't short 22 million bitcoins, although I welcome them to try. there are no legitimate exchanges for this to happen and apparently "no fresh fiat" either as some like to say.
they want a stash only to hold, because they cant take the risk of not having any.
They don't weave the fate of Bitcoin into derivatives. They weave the fate of the special investment vehicle(s) and the debt it owes to the bank, into derivative contracts in order to keep the debt off the banks balance sheets, if deemed necessary to do so.
They can use their special investment vehicles to surreptitiously enter the market and even if they done so purely through open market operations (as opposed to through OTC deals which would be far more likely) and took a loss to begin with. Their position would soon become so large and their spending power so limitless compared with every other entity in Bitcoin that they could soon have the whole Bitcoin market bobbing up and down on the end of a piece of string.
Say the meteoric rise was every bit as much to do with establish banking houses quietly taking positions in the Bitcoin market as it was to do with China? Sure, they will have enriched many early adopter speculators. But if this were the case, how many since then have they impoverished?
