Anyone else think CME will crash the price of bitcoin when they start selling futures? Most people seem to think the price will rise but big institutional figures/companies who want to short bitcoin will finally have a means of doing so.
The year are cash settled and other exchanges don't suddenly shut down. They are going to JUST themselves with arbitrage.
Noah Anderson
Yeah I agree; I opened a bitcoin short at $7900 bitfinex, still waiting. I should have closed at 5500, but I think bitcoin will dip to $3000-$4000 in a few months. All they would need to do is network congestion on next block difficulty.
Hunter Clark
Of course, the same reason Bitcoin unexpectedly pumps will cause its downfall. Bitfinex pumps or dumps depending on whether there are a lot of open longs or shorts. They trade against their own customers ffs.
Ethan Turner
yes it will price will go up until cme add bts and then they short the shit out of it buy the dip at 3k and long it
Daniel Edwards
Does anyone else think me betting against France in the football World Cup makes them more likely to lose?
today OP you attained wisdom
Samuel Butler
You humongous retard
Shorting means borrow someone asset for a fee, sell atm and buy back when agreed
If you have enough money to sell 1M btc everything will go nuts
Brody Rodriguez
I think it will be similar to paper gold and silver.
Unlimited fiat shorts might cause the market to crash since it's all cash settled.
Thomas Gomez
You don't know what a futures contract is.
Chase Myers
It won't because they limit it to 7% loss on the day and 15% gain. The market is literally too slow and limited. It won't tame Bitcoin it will just destroy a bunch of wall-street wallets and they will fucking demand Bitcoin be regulated.
Nicholas Cooper
My mistake I forgot the key word. Bitcoin exchanges. This won't hurt Bitcoin but it will destroy every US based exchange.
It's forex all over again.
Luis Roberts
Yeah fucking right you shorted the very top
Juan Flores
It's where a bunch of faggots pretend they own the assets just to trade with high leverage.
Noah Miller
if anytihng the price is gunna jump big time. The main thing that held big investment houses from investing is the lack of having a clearinghouse which acts as a safeguard in case shit goes south. with CME getting involved, you now have the sagfeguard needed to permit these institutions to hold Bitcoin alongside gold holdings and similar asset types
Kayden Jackson
Don't they have to buy the asset in order to let people borrow it and short it? If not how do the customers borrow something CME doesn't have? Can I start a company letting people borrow things I don't own?
Wyatt Rivera
>ask JP Morgan this question about Silver >Get laughed at
Caleb Nelson
>pretend you have bitcoins >trade it for market price >get rich >market crashes
that's it.
Brody Carter
A future's contract involves 3 parties, you, the contra, and the clearinghouse between you two.
If I want to buy a futures contract from the clearinghouse, there needs to have been someone else who has already sold a futures contract. A futures contract is an agreement to deliver an underlying asset in the future. So selling a futures contract requires you to sign a document agreeing to deliver Bitcoin on a certain date, with huge penalties. The clearinghouse vets all it's members, only trustworthy folk may enter. As such, its 0 sum, every winner has a loser. Equal and Opposite.
So for someone to "short" bitcoin via Futures, you'd have to "bet" that the future spot price of bitcoin falls. To do this, you need to sell a future's contract that you borrow from another contract owner and hope to buy it back on the market before expiration, but after the price moves favorably.
Thus, in order to "short" via futures, there needs to be some whale who wants to lend you a bunch of futures, knowing full well that he'll get them back at the end. If he thinks the price will fall, how likely is he to lend them to you, so that you can sell them rather than he? So for a trade to actually take place, we have to have opposite expectations. There needs to be a whale who expects bitcoin to rise in the LR, or at least stay stabile so that he pockets the lending fee, and a speculator who expects it to fall in the SR (on the exchange). THe speculators are only allowed to FUD to the extent that whales Hodl.
Thus, you cant destroy bitcoin w Futures.
What you CAN Destroy is bitcoin's volatility.
Alexander Sanders
Pretty sure the CME is going to be cash-settled; they don't need any actual bitcoin they just bet on the price movements.
Jace Watson
>What you CAN Destroy is bitcoin's volatility. Which will cause the greatest alt boom of all time.
Jack Johnson
If they are cash settled, CME can just issue contracts where the owe the difference of the price from an index. This is basically issuing a naked short, considered pretty risky. But they have so much money it's not a huge concern if they did this desu
Ian Collins
This is because the futures market is a market for Price CHANGES.
Every day all outstanding future's contracts are "marked to market", meaning the "price" that they read is adjusted so they all are the same at the end of the day. Gains and losses are they recognized, people who bought Long contracts whose price went up still have the same contract at the end of the day, but pocket the price change.
The great thing about price changes is that you get huge fucking leverage from the Clearinghouse with which to trade them. So even tho the price changes 1% you can make 20% on your initial investment.
This makes a TON of capital able to speculate very accurately, down to a penny or fraction of a penny, on the price of the underlying. Volatility is usually muted after futures contracts are introduced, which would only be good for bitcoin.
BUT WAIT:
There is no guarantee that anyone will show up to the CME w bitcoins to sell in the future. Without them, there can be no futures exchange. These people are the farmers who sell their wheat in advance on the futures exchange to lock in the price.
MIners are the only natural hedgers. They know they'll have a certain bitcoin revenue they need to offload the price and currency exchange risk of. Futures arent magic.
Luis Bailey
why do you thinkthat is?
Joshua Scott
>There is no guarantee that anyone will show up to the CME w bitcoins to sell in the future. CME bitcoin futures will not entail any exchanging of actual bitcoins, as it is cash settled.
Liam Morgan
Because a not so volatile bitcoin causes people to go to alts. Look at what happened before. I dont know why Bitcoiners are so happy with the CME news, its not an ETF. The CME group explicitly mentioned taming the BTC price.
Eli Hill
/thread
Angel Bennett
you really dont understand futures do you?
Most futures allow for cash settlement. At the end of the fucking term on the future's contract though, the underlying must be delivered. There is a difference between settling the transactions OF futures contracts and fulfilling futures contracts themselves.
Ya, ES-Mini Futures are cash settled, but this is because it would be absurd to actually deliver 500 actual individual stocks at the expiration date. So the CME says, hey, just pay us the money, we'll go buy the sp500 and settle the contract.
Angel Taylor
>the underlying must be delivered. that's not a cash-settled futures contract though famalam
Carson Cruz
The entire idea of cash-settling is to avoid the having to deliver underlying See pic related.
Kevin Torres
Or you can read this business insider article about it if you don't want to listen to me.
Now tell me again who doesn't fucking understand futures you fucking mongoloid cunt.
Austin Adams
This.
I'm baffled how people don't understand CME is acually good for alts not BTC itself.
Easton Green
To double down my statment after initial pump to HUGE levels (i dunno 10-15k?) CME will do to BTC what ICO-s did to ETH.
Tame it long term, make not bullish or bearish......just there.