Reuters: Bitcoin gets boost as U.S. watchdog (CFTC) approves first swap

[LiteCoinGuy]

Bitcoin gets boost as U.S. watchdog approves first swap

TeraExchange on Friday launched a swap based on the bitcoin virtual currency, becoming the first to receive approval from a U.S. federal regulator for a financial product based on the budding

...

It took TeraExchange, which was launched in 2010, almost half a year to get the product past the regulator, the Commodity Futures Trading Commission, since first announcing its plans to launch the swap in March.

The company, one of a handful of platforms to facilitate regulated swaps trading that sprung up after the crisis, had to construct an index to gauge the value of bitcoin that the CFTC was satisfied could not easily be manipulated.


http://www.reuters.com/article/2014/09/12/us-usa-bitcoin-cftc-idUSKBN0H71FU20140912?feedType=RSS&feedName=technologyNews

http://www.teraexchange.com/


posted here because i think thats a milestone for bitcoin, isnt it?



LiteCoinGuy

[SpongeBTCants]

So many good news lately, wonder when whales will stop keeping the price low to buy as much cheap BTC as possible from morons before the price sky rockets again.

[oceans]

Definitely a milestone for bitcoin, really happy to see so many great things happening and so much good news coming through involving bitcoin and it seems to be happening a lot more often now as well which surely is a great sign?

[LiteCoinGuy]

http://www.finextra.com/News/announcement.aspx?pressreleaseid=56688

[QuestionAuthority]

Wow, this is huge and can help stabilize Bitcoin price once and for all.

The Tera Bitcoin Price Index employs a dynamic algorithm that compiles and filters data on a real-time basis from a number of widely utilized global bitcoin exchanges. In order to be included in the index these exchanges are required to execute and maintain an information sharing agreement with TeraExchange, as required by the CFTC. TeraExchange is the index administrator and calculation agent....."Regulated bitcoin swap trading provides institutional clients with a more efficie a more efficient and confident way to hedge and trade," said Christian Martin, CEO and co-founder. "A robust price index also helps the growing bitcoin trading community to accurately mark-to-market positions while establishing trust and stability in this growing global marketplace."

[Bitcoinpro]

dosn't really mean anything if it does explain it to me

[Bitcoinpro]

Wow, this is huge and can help stabilize Bitcoin price once and for all.

What r u talking about

[RawDog]

dosn't really mean anything if it does explain it to me

You are too dumb to understand things like this.  However, I'll tell you one thing you can understand - this is fucking huge. 

[Bitcoinpro]

dosn't really mean anything if it does explain it to me

You are too dumb to understand things like this.  However, I'll tell you one thing you can understand - this is fucking huge. 

Sure bud just answer the question instead of trying to sound like an ass hat

[RawDog]

dosn't really mean anything if it does explain it to me

You are too dumb to understand things like this.  However, I'll tell you one thing you can understand - this is fucking huge. 

Sure bud just answer the question instead of trying to sound like an ass hat

The answer will be of no use to you.  You'll just have to believe that bitcoin swaps are a very important step forward.  It basically means, now wall street is actually involved and designing financial products around bitcoin.  Never before has that been done. 

Look, this stuff is technical.  It's not really good for morons.  Try a Frisbee.

[trabitc]

I didn't understand much about this news but if it's huge, it's nice for me and for bitcoins.

[Bitcoinpro]

dosn't really mean anything if it does explain it to me

You are too dumb to understand things like this.  However, I'll tell you one thing you can understand - this is fucking huge. 

Sure bud just answer the question instead of trying to sound like an ass hat

The answer will be of no use to you.  You'll just have to believe that bitcoin swaps are a very important step forward.  It basically means, now wall street is actually involved and designing financial products around bitcoin.  Never before has that been done. 

Look, this stuff is technical.  It's not really good for morons.  Try a Frisbee.

Translation:

Brain injury association of America certified WORTHLESS

[RawDog]

dosn't really mean anything if it does explain it to me

You are too dumb to understand things like this.  However, I'll tell you one thing you can understand - this is fucking huge.  

Sure bud just answer the question instead of trying to sound like an ass hat

The answer will be of no use to you.  You'll just have to believe that bitcoin swaps are a very important step forward.  It basically means, now wall street is actually involved and designing financial products around bitcoin.  Never before has that been done.  

Look, this stuff is technical.  It's not really good for morons.  Try a Frisbee.

Translation:

Brain injury association of America certified WORTHLESS

Don't worry about it dude - just put one of these in your car window:

[Bitcoinpro]

dosn't really mean anything if it does explain it to me

You are too dumb to understand things like this.  However, I'll tell you one thing you can understand - this is fucking huge. 

Sure bud just answer the question instead of trying to sound like an ass hat

The answer will be of no use to you.  You'll just have to believe that bitcoin swaps are a very important step forward.  It basically means, now wall street is actually involved and designing financial products around bitcoin.  Never before has that been done. 

Look, this stuff is technical.  It's not really good for morons.  Try a Frisbee.

Translation:

Brain injury association of America certified WORTHLESS

Don't worry about it dude - just put one of these in your car window:

Now your explaing the currency swap exemption properly

[jbrnt]

So this swap is an agreement to sell bitcoin at an agreed rate in the future, right? Does it mean merchants who accepts bitcoin do not need to sell the bitcoin they received on the exchange immediately?

[adamstgBit]

WOOT WOOT

[Verse]

So this swap is an agreement to sell bitcoin at an agreed rate in the future, right? Does it mean merchants who accepts bitcoin do not need to sell the bitcoin they received on the exchange immediately?

Yes. This is a crucial step towards stabilizing the exchange market and turning Bitcoin into a viable currency instead of an investment currency. Additionally, if these swaps are heavily used, they could create significant upward price pressure for BTC by forcing the market into a longer position and therefore able to price in externalities like deflation, and the demand increase for BTC at higher valuations (wire transfers for large corporations which exchanges cannot currently handle due to the limited market.)

Keep your eye on these swaps, they could serve as a tipping point.

You can get more information here, instead of having that kid posting handicap signs call you an idiot: https://en.wikipedia.org/wiki/Swap_%28finance%29

Or a simple explanation here: http://www.investopedia.com/articles/optioninvestor/07/swaps.asp



tl;dr: Bitcoin's real value is in the future, not the present. Swaps = Long positions = Long term upward price pressure = Good.

Disclaimer: Please note that I am not necessarily saying that the current $470 price is 'good' by extension, Bitcoin could (still) be overvalued and a market correction could suppress any short term swap benefits.

[QuestionAuthority]

So this swap is an agreement to sell bitcoin at an agreed rate in the future, right? Does it mean merchants who accepts bitcoin do not need to sell the bitcoin they received on the exchange immediately?

Yes. This is a crucial step towards stabilizing the exchange market and turning Bitcoin into a viable currency instead of an investment currency. Additionally, if these swaps are heavily used, they could create significant upward price pressure for BTC by forcing the market into a longer position and therefore able to price in externalities like deflation, and the demand increase for BTC at higher valuations (wire transfers for large corporations which exchanges cannot currently handle due to the limited market.)

Keep your eye on these swaps, they could serve as a tipping point.

You can get more information here, instead of having that kid posting handicap signs call you an idiot: https://en.wikipedia.org/wiki/Swap_%28finance%29

Or a simple explanation here: http://www.investopedia.com/articles/optioninvestor/07/swaps.asp



tl;dr: Bitcoin's real value is in the future, not the present. Swaps = Long positions = Long term upward price pressure = Good.

Disclaimer: Please note that I am not necessarily saying that the current $470 price is 'good' by extension, Bitcoin could (still) be overvalued and a market correction could suppress any short term swap benefits.

That's all correct. Bitcoin could end up with a decreased USD exchange rate initially but the long term growth would be impressive and steady. We could look forward to real adoption by normal people not just the fringe element that uses it inbetween their posting of handicapped signs.

[blumangroup]

So this swap is an agreement to sell bitcoin at an agreed rate in the future, right? Does it mean merchants who accepts bitcoin do not need to sell the bitcoin they received on the exchange immediately?

Technically this is true. However someone selling a futures contract to sell something in the future generally has the same effect on the "spot" market as an outright sale would have.

[Gleb Gamow]

So this swap is an agreement to sell bitcoin at an agreed rate in the future, right? Does it mean merchants who accepts bitcoin do not need to sell the bitcoin they received on the exchange immediately?

Technically this is true. However someone selling a futures contract to sell something in the future generally has the same effect on the "spot" market as an outright sale would have.

This is exactly what I once proposed, dedicating a thread to such, but was shut down (not the thread) via a myriad of posts espousing as to why my idea would never come to fruition.

My electronics teacher in high school ('76) told me that there would never be a TV watch due not being able to manufacture a cathode ray tube small enough to create such a thing after I asked a "what if" question. He was somebody I looked up to at the time. Image the possibilities if he would have said something akin to, "That's a great idea, Bruno. Why don't you try to build something like that, but probably not based on a CAT."

Look at my sig. Does that also look like a crazy idea?

~Bruno Kucinskas