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Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

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Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#11

Post by emerged »

gchokov wrote: post #2

Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...

My read is that futures trading legitimizes Bitcoin, perceptually at least signaling mainstream financial adoption of Bitcoin.

I'm sure that read is only one of the myriad of subjective factors involved (let's all agree that Bitcoin rises and falls in clouds of collective subjective perception), but I think it may be the dominant one.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#12

Post by devit »

gchokov wrote: post #2

Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...

As far as I can tell it's just a way to outsource holding the BTC.

A BTC future can be perfectly hedged by taking a loan until the settlement date and using it to buy 1 BTC, holding it until settlement and then selling, so that's probably what the counterpart selling the future is doing.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#13

Post by gchokov »

gibybo wrote: post #6
gchokov wrote: post #2

Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...

The markets are not as independent as they might seem. If the futures market gets ahead or behind of the other BTC markets, it creates opportunities for arbitragers to profit from the difference which has the effect of reducing the gap. It doesn't matter that they are cash-settled. For example, if lots of money start pouring into Bitcoin futures, the futures price will rise above the price on BTC exchanges. It will t…

Excellent explanation - thank you.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#14

Post by olalonde »

gchokov wrote: post #2

Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...

https://news.ycombinator.com/item?id=4693920

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#15

Post by tehlike »

flatline wrote: post #9
sliverstorm wrote: post #5

Earlier quoted context omitted.

Just the next step from the Bitcoin economy, to the Bitcoin Standard economy, to the eventual Bitcoin Fiat economy. Seriously, the Lightning network looks a lot like the old Gold Standard, and the arc of Bitcoin seems to be reinventing modern currency, so I'm trying to figure out what's next.

I agree, and I'm skeptical of Bitcoin on many levels. The vision it offers is very attractive, but each so-called feature comes with so many caveats that it's never clear there is a real advantage. Still, I think people hold onto the vision. As digital cash, I can buy something online more or less anonymously, without a middle man. Well, except for the miners. And my anonymity is blown if the person from whom I purch…

IF you want privacy, there are alternative coins that are fairly active with development: Monero, zcash, etc. I am not endorsing anything, but i believe the privacy & fungibility are important in a digital currency.

On the sad side, people who put money in bitcoin are thinking it's a great investment. This is not to devalue your comment, but for the past 10 years, almost every years, the low lows have been increasing.

Be your own bank is not a meaningful goal, though, at least with the way things are. Coinbase, for example, holds about 10% of circulating bitcoin is what i hear.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#16

Post by gchokov »

camillomiller wrote: post #4
gchokov wrote: post #2

Can’t really wrap my head around the rise of BTC in futures trading, as they are all cash settled. In other words, pure betting and gambling with the futures, as they really do not touch the underlying BTC. I guess, just a regular day in the massively manipulated crypto currency world...

Crypto might even be manipulated, but in this case what’s the issue? I don’t get your logic. Some independent financial entity decides to start trading futures on horse manure. That makes horse manure a heavily manipulated underlying financial product?

Well. You will see what manipulation means when the first contracts are about the expire!

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#17

Post by tehlike »

kgwgk wrote: post #10
module0000 wrote: post #3

Earlier quoted context omitted.

It’s about risk management. The highest volume futures contracts are cash settled as well(ES, NQ, ZB, 6E’s). Example usage 1: you may want to own BTC and de-risk before economic events by hedging % short BTC contracts.

As if there was any link between BTC and economic events...

was this a /s? IF it's not: With the current HODL mentality, you can imagine the bitcoin price go even higher. I wish the same HODL'ers were around in 2008, things would have been much different. "Buy the dips" is the best investment strategy that became mainstream thanks to bitcoin.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#18

Post by thisisit »

Is someone able to find how the cash settlement of these futures handle forks? I can find CME's policy but nothing for CBOE:

http://www.cmegroup.com/education/cme-bitcoin-futures-freque...

> 31. What is CME Group’s policy regarding hard forks?

> CME is developing a hard fork policy for capturing cash market exposures in response to viable forks. The policy may involve cash adjustments to position holders or listing related futures that are also issued to position holders.

Re: Bitcoin Futures Start with a Bang as Rally Trips Circuit Breaker

#20

Post by raverbashing »

JanSt wrote: post #8
sliverstorm wrote: post #5

Earlier quoted context omitted.

Just the next step from the Bitcoin economy, to the Bitcoin Standard economy, to the eventual Bitcoin Fiat economy. Seriously, the Lightning network looks a lot like the old Gold Standard, and the arc of Bitcoin seems to be reinventing modern currency, so I'm trying to figure out what's next.

To me, the Lightning network looks like a terrible idea. It achieves nothing that an increased blocksize would not have done on-chain yet wraps a faster-layer around the slower, deliberately crippled (1MB) blockchain and does require multi-hop liquidity that must be provided by interested parties. My understanding would be that the slower layer (like TCP) would be stacked on the faster layer (like IP). The lightning…

My opinion exactly

It's not a "terrible idea" it is what should have existed in the first place in the oficial blockchain

They're just adding a 2nd layer on top, calling it official and then saying "bitcoin is working"

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