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Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

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Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#21

>"The decision to clear client trades will be made on a case-by-case basis, the person said." Could someone say what "clearing the trades" mean here?

It's where Goldman would net off trades between their own clients, effectively acting as an exchange for their clients using the prices on the official exchange. They say in the article they won't act as market-makers or hold their own positions. That means they won't perform their usual capacity for clients, where they act as middleman between the exchange and their own clients. ie they won't make a price for their clients to buy a bitcoin future the client wants to sell, and then turn around and sell the bitcoin to someone else the exchange later in the day. They won't do that. What the will do is buy the bitcoin future if they have another client that wants to buy it at the same time, because then they will never assume much risk.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#22
post #9

I wonder what Jamie Dimon thinks about this! Funnily enough, my sources tell me JP will be in on the futures contracts as well. What hypocrisy!

It's not really hypocrisy. There's money to made by clearing futures and some of the banks want that money. What's being traded doesn't really matter.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#23

Earlier quoted context omitted.

Clearing the trades means both buying and selling.

So they are the market maker?

No, they just serve as a central point to match buyers and sellers so the buyers and sellers don't have to find each other themselves. They aren't making a market but they do get clearing fees.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#24
post #18
post #7

bitcoiners in 2012: "Bitcoin will eliminate the wall street banksters!" Bitcoiners right now: "OMG Goldman is getting in, who's ready for their moon rocket?"

Expectations are rather more mixed than that.[0] Sure, the price could spike even higher after futures go on sale. But volatility will increase dramatically. And you can't count on exchanges, if the price collapses. 0) https://www.coindesk.com/bitcoin-futures-make-way-new-kind-w...

Futures markets reduce volatility.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#25

I have been trading crypto for 5 years now and it is a wet dream for rogue traders. There was a myriad of stories about traders and even banks that tried to pull of some shady statretgy in the stocks markets that the SEC shut down, those same strategies seem to be fair game in the crypto world, you just have to have pockets that are deep enough. My point is that if you are smart and think you can beat or even keep up…

I've always laughed watching the cultist end of the crypto community up on their imaginary moral high horses talking about how much "better" crypto was than banks and regulated markets.. given the fact that crypto markets basically represent all of the shady shit manipulators in regulated markets would love to do but can't.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#26
post #15

This should give the big Wall St banks the ability to muck with crypto prices however they choose, just like they can do with gold and silver and other commodities (for example, Goldman magically closed gold positions and sold short 2 days before historic 25% price drop in 2 trading days in 2013[0]) Hopefully people will read those contracts and understand how delivery actually works and realize that COMEX or whoever…

> This should give the big Wall St banks the ability to muck with crypto prices however they choose,

The current status quo is that large bitcoin holders can muck with crypto prices however they choose.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#28
post #4

The bigger it grows the harder it will fall. The design/implementation of bitcoin as a currency is severely flawed. Projects like Ethereum, Hyperledger, and IOTA have a more long term focus. Full Disclosure: I have no positions in any crypto but have been reading a lot. Also, in the midst of two courses that go that cover crytpocurrencies and blockchain tech. 1. https://www.coursera.org/learn/cryptocurrency 2. https:…

I agree that Bitcoin is extremely risky, but I've looked at IOTA, and it's an utter nonsense project. It's centralized, because the tangle security model it purports to use doesn't work, and its developers have pulled antics like explaining away a flaw in the client code by claiming it was put there intentionally to thwart copycats, and claiming a "partnership" with a company after IOTA used that company's software.

Hyperledger meanwhile is not a distributed cryptocurrency project. It's software for building consortium blockchains, meaning blockchains run by trusted third parties.

I agree with you on Ethereum. It's now processing more transactions than all other decentralized blockchains combined, including Bitcoin.

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#29
post #18

Earlier quoted context omitted.

Expectations are rather more mixed than that.[0] Sure, the price could spike even higher after futures go on sale. But volatility will increase dramatically. And you can't count on exchanges, if the price collapses. 0) https://www.coindesk.com/bitcoin-futures-make-way-new-kind-w...

Futures markets reduce volatility.

As I understand it, that's true only if there's a balance of buy-side and sell-side hedgers. Owners and miners are sell-side hedgers. Who are the buy-side hedgers?

Re: Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

#30
post #18

Earlier quoted context omitted.

Expectations are rather more mixed than that.[0] Sure, the price could spike even higher after futures go on sale. But volatility will increase dramatically. And you can't count on exchanges, if the price collapses. 0) https://www.coindesk.com/bitcoin-futures-make-way-new-kind-w...

Futures markets reduce volatility.

Can you do an "Explain it like I'm 5" of this? I don't doubt you but I'm struggling to make the connection. Will futures affect the pricing of the underlying asset? (I don't think so?)

I think you are saying "futures reduce volatility for the trader" but I'm not sure.

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