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Goldman Sachs Plans to Clear Bitcoin Futures When They Go Live

bloomberg.com

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

#31

Post by bonestamp2 »

curiousgal wrote: post #12
coryl wrote: post #11

Earlier quoted context omitted.

If you are short term day trading you're likely to be a victim of pump and dump groups and manipulation. Going long on high market cap coins with a longer timeline is a relatively safer bet.

There are fees to any position you hold so even though going long is indeed the safe bet, having a longer timeline requires deep pockets.

You can avoid the fees on some bitcoin exchanges if you're a market maker, and with the volatility that's pretty easy most days. I made a couple 0% fee trades today alone. But, the second part is definitely true... you still need deep pockets to hold a long position.

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

#32

Post by cm2187 »

lbotos wrote: post #30
CryptoPunk wrote: post #24

Earlier quoted context omitted.

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.

It allows participants to short and therefore should allow more balanced flows.

However one needs some pretty steel-made cojones to short a bubble....

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

#33

Post by cm2187 »

mirimir wrote: post #18
tCfD wrote: 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...

And that volatility should make this asset class (if it is one) unsuitable to trade for most banks and many institutional investors, who have VaR limits. The VaR of bitcoin is off the charts.

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

#34

Post by onion2k »

coryl wrote: post #11
curiousgal wrote: post #8

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…

If you are short term day trading you're likely to be a victim of pump and dump groups and manipulation. Going long on high market cap coins with a longer timeline is a relatively safer bet.

The rogue traders aren't looking for a safer bet.

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

#36

Post by cm2187 »

osrec wrote: 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!

He was talking about market making, not clearing. The bank doesn’t really take a principal risk on clearing. It does on market making.

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

#37

Post by zitterbewegung »

teilo wrote: post #35

> In fact, the Bloomberg system is a blockchain, just instead of having the users control it, we control it, but it has all the attributes of that. Thus proving that whatever he thinks about Bitcoin, Michael Bloomberg is clueless about the blockchain.

Actually they might be running a separate Blockchain to manage their side. Similar to https://github.com/jpmorganchase/quorum which uses raft con sensus.

He is being confusing though and you could be right so...

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

#38

Post by sdljfslkjfdsj »

lbotos wrote: post #30
CryptoPunk wrote: post #24

Earlier quoted context omitted.

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.

Also the CME & CBOE bitcoin contracts like many other futures commodities allow "spread" trading across duration. This has a dampening affect as well. In a lot of commodities spread trading volume exceeds that of the outright.

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

#39

Post by dia80 »

bogomipz wrote: post #10

>"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 means they will allow their account at the exchange to settle client trades. This will involve them using their existing collateral at the exchange to underwrite the client trades. They will in turn demand collateral from the client but may be potentially exposed if the client defaults.

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

#40

Post by dailyvijeos »

riazrizvi wrote: post #21
bogomipz wrote: post #10

>"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…

It’s smart because holding BTC in a Tulip-bulb crisis is insanely risky. This current crisis is due to elastic demand based on short-lived, fashionable attention of a tiny currency, whereas common currencies are more inelastic because their usage and scale lends themselves to more stability. The value will collapse when people lose interest or when large institutions get over the mania of New Relationship Energy. Durable, appreciating assets that are easily liquidated are ideal for holding balance sheet value. For transactions, BTC maybe fine but even that is risky.

It will be interesting to see if shorting will be possible.

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