Let's say

That'd mean EVERY single miner has to play their part and how do you suppose that's gonna work huh?

Why would miners willingly tank btc price? They spent thousands on mining equipment.
Also, who would actually buy a futures contract? Miners can't guarantee that they get any specific number of bitcoin until they actually get it, which means they're going to be forced to pay up if they fail to deliver. Buying a futures contract would actually increase the risk to miners.

hahahahaahahahahahahahahahahahaha fuck off

all the miners are from china
sometimes you seem to forget that

but who is the semen demon

Not every single miner, just a couple of whales.
Who do you think rule this market right now? The aggrgated little investors? Oh user, you are so cute.

Wrong.

You think every miner in the world is gonna collaboratively stop mining to pull this shit off?

google Chingy Chong

i hope mao comes back from the dead and starves your family to death cumnigger

every miner in china, yes
i'm not even the original argument poster either
his argument just points out a hole in the futures as irrevocably beneficial argument
groupthink can infiltrate the system, especially when all the wealth in bitcoin is owned by the small group of early investors and the miners

Will someone answer my fucking question or not?????

I thought I understood futures markets, but I'm not following the math on this. How is the investor getting 35k net profit? If bitcoin is worth more than 25k when the contract matures, then you're losing money, aren't you? When you buy the contract, are you not essentially betting that the asset will be worth less than what the buyer is contracted to buy it for?

No, you are not entitled to one, but I'm going to tell you that you are a brainlet.

Fuck I meant to say $10,000 profit.
I messed up the question.

Still though, how is this not free interest? What am I missing here????

If he thought bitcoin will go up, why would he make a contract to force you to buy for 25000$ when he could make a contract to force you to buy for 5000$?

He think he can make more money by using his money trading elsewhere in the meantime. So he agrees on the future price contract with me and gets to trade his money in other markets until the end of the year and buy for $25,000, because he thinks the actual spot price will be $35,000, by the end of the year.

cash. cold hard cash, thats why.

Ok. Then in that case, you either think bitcoin will be worth less than the contracted price, or you shouldn't buy it. If the investor is right, even it isn't 35k, even if it's 26k, then you're required to sell him your bitcoin for less than it's worth. If you have a ton of bitcoin that you got cheap, then you can do this year after year without risking your profits to a crash or long decline, at least as much as you contract to sell. If not, then to do the same thing the next year you're having to buy back bitcoin at a higher price than you previously sold for in order to be compliant when the next contract matures. Essentially you're continually buying bitcoin at higher prices and then selling later for less than it's worth. In the long run you either deplete your stack without making enough to replenish it or you just run out of money because the replacement cost is higher than your profits. The only way that doesn't happen is if bitcoin grows more slowly than the growth rate anticipated by the contract price.

you're such a fucking brainlet holy shit

90% of hashrate is in China and most of that is controlled by just a handful of people. Bitcoin is decentralized in name only.

OP and everyone else in this thread

you're all idiots and have no idea how futures work

investopedia.com/terms/f/futures.asp

read, and then ask again

TL;DR: no this is not free money because that's not how futures work

you're such a fucking brainlet holy shit

> then you're required to sell him your bitcoin for less than it's worth
Yeah, so what? If it's risk-free, is it not worth doing that with a significant chunk of my portfolio regardless, because I can keep trading with another part of my portfolio?

Futures contracts are usually set at a 'risk-free rate' at that point in the future.

If it's higher than a savings account rate, then isn't this just a "better" savings account?

cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures/contract-specifications

and if that's too much

medium.com/@ImagineTraffic/the-5-minute-guide-to-bitcoin-futures-804a4935b583

>If a futures contract costs more than Bitcoin, you could buy Bitcoin, and sell a future contract at the same time, then, when the contract is up, you deliver the bitcoin for the agreed upon price and therefore profiting on the difference. This is called “cash and carry” arbitrage.
I'm familiar with cash and carry arbitrage. But if I sell a covered future contract, so basically I buy a Bitcoin at the same time, then it's basically a better savings account?

I am losing out on "potential gains," sure, but if the savings rate is higher than the best CD/bond I could get and I would normally get a CD/bond, then it's still better, yes?

It's trivial to beat bonds. The prices don't have to be exactly the same but they will be extremely close.

Ok so for something as volatile as Bitcoin, why doesn't this render any CD from a bank of equal length obsolete?

If you're quantifying risk as the potential to lose money, and you're making an agreement to sell an asset at an agreed-upon price, then if you sell the asset at that price when it's worth more you've lost money equal to the difference in the price at maturation and the contract price. The risk in your example is that bitcoin will be worth more than 25k. The risk the investor takes is that it won't be. If you got in below 25k then you've still made a profit, it's just lower than what it would've been if you'd sold at market in a year instead. And to do it every year, you have to keep buying bitcoin, presumably at increasingly higher prices. That's sustainable if you buy next year's bitcoin before it reaches the price of this year's contracts. But a large part of your (already reduced) profit will be going into keeping that inventory for the next year's contract, which means holding bitcoin, and thus exposing yourself to the same market risk that you're trying to avoid by buying the contract in the first place.

Arbitrages will keep the prices close enough that arbitrages isn't particularly profitable. Because bonds pay out so little, this means that the prices will stay very close.

I'm not concerned with losing value in buttcoins, only in fiat.
It's just cash and carry arbitrage then, like the other guy said.
So the reality is that futures prices will be relatively close to the spot price of bitcoin * the "risk-free" bond rate, so close that it's pretty much not worth the profit to make a "covered" future contract and at best it's a small chance at arbitrage, assuming I would have locked away the $70,000 minimum that year into a bond anyway. So the only use it could have for me is to short Bitcoin by not covering it....which is kind of an obvious mistake because we all know how messed up people get shorting Bitcoin..

Am I getting that right?

can confirm, have gotten messed up every time i've shorted bitcoin

Bitcoins purchasing delays and fear of hacking/exit scams might allow the prices to drift a bit more, but not so much that arbitrage becomes easy money. Shorting in the short term isn't that dangerous and the big players only have to use a fraction of their funds to do it. If they can cause a bubble pop, which shouldn't be too hard since it's on everyone's mind and all over the news, they can take away a big profit.

>purchasing delays and fear of hacking/exit scams
Cool, 2 things I never have to deal with because I'm not an idiot and understand blockchains.
But I think I get it now. And 70k is too much for me to lock away in a bond, even with some arbitrage, without the opportunity to trade anyway. Makes sense.