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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

#151

Post by where_do_i_live »

tcoppi wrote: post #112
LrnByTeach wrote: post #40

I am trying to understand risks with arbitrage for professional traders with BTC spot (at Coinbase gdax) and CBOE Futures contract. Let us say, some professional trader "Short sell CBOE Future contract & Buy BTC Spot at Coinbase simultaneously" At the time of this writing, Futures contract short sell @ $18700 and BTC Spot buy @ $16700 simultaneously. http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures you wait…

CBOE settles to Gemini's spot price, not GDAX. The prices between exchanges differ dramatically currently.

You are correct it trades to Gemini's spot price, but you are wrong in terms of the difference between the two. As I write this there is a 5 cent different between GDAX and Gemini.

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

#152

Post by [deleted] »

user5994461 wrote: post #73
LrnByTeach wrote: post #40

I am trying to understand risks with arbitrage for professional traders with BTC spot (at Coinbase gdax) and CBOE Futures contract. Let us say, some professional trader "Short sell CBOE Future contract & Buy BTC Spot at Coinbase simultaneously" At the time of this writing, Futures contract short sell @ $18700 and BTC Spot buy @ $16700 simultaneously. http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures you wait…

>>> case 1: Bitcoin price shoots to $25,000 >>> case 2: Bitcoin price drops to $8,000 case 3: one of the exchanges canceled your order shortly after they were done. case 4: the exchange refuses to pay you out for whatever reason they invent. case 5: the exchange goes bust, either seized by the police, hackers or the owner outright left with all the money. In all these cases. You are likely to loose 100% of the sum yo…

[deleted]

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

#153

Post by where_do_i_live »

provost wrote: post #107
thisisit wrote: post #18

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 r…

Sounds like if a fork were to happen soon (not that it will) they would have to freeze the exchange, as they don't have a plan. I've noticed Coinbase does this as well, though they email a clear explanation about each upcoming fork-freezes and their intentions for each scenario.

Coinbase froze deposits/withdrawals, trading on the exchange often continues normally.

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

#155

Post by sametmax »

Asdfbla wrote: post #142
sametmax wrote: post #25

Earlier quoted context omitted.

That's pretty much what people use stock market for anyway. Most investors are no warren buffet, they bet at best on educated guesses.

At least traditional modern financial instruments still have some connection to an underlying real-world market, even if they are 10 layers of financial abstraction removed from reality. They can also always sort of justify it by saying that it provides liquidity and so on. Harder to justify what the point of Bitcoin financial instruments is though, since it can't really be used for much at all in its current state.…

> At least traditional modern financial instruments still have some connection to an underlying real-world market

In 2012, 50% of of US trading was considered "automated high-frequency trading".

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

#156

Post by etr-strike »

jacobr wrote: post #105
hknecht wrote: post #74

I think Bitcoin will become the principal store of crypto value. There will be other cryptos for different uses and Bitcoin will serve as a medium of exchange among them and as a long term store of value, it probably won’t become the everyday currency we all want to use. Hopefully these futures will reduce its volatility and help stabilize the price

It's not very good as a medium of exchange due to the high transaction time and costs. There is a theory that a recent bump in Litecoin prices was due to traders wanting to move Bitcoin between exchanges and Bitcoin is too slow.

I hate to break it to you but none of the existing cryptocurrencies know how to scale transactions yet. There are, however, many proposed solutions. Bitcoin is aggressively pursuing those solutions.

The worst proposal, increasing blocksize, is not currently being considered because of its impact on centralization.

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

#157

Post by jacobush »

icebraining wrote: post #65
basicplus2 wrote: post #23

So what happens when the entire earth's energy production is required to produce the next bitcoin and there is therefore no further bitcoin mining?

It should be noted that Bitcoin doesn't actually need much energy to process the transactions; I believe you could run the whole thing in a single computer. It only burns a lot of energy to avoid malicious miners from subverting the process. More mining means more energy must be burnt, but it can be scaled up or down, and doesn't affect the transaction rate.

So a takeover by a UN mandated operation then, to put it under the trusted oversight of a bank? :)

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

#158

Post by etr-strike »

aninhumer wrote: post #117
Frogolocalypse wrote: post #85

Earlier quoted context omitted.

The purpose of this restriction is to protect the decentralization of bitcoin nodes. It is this decentralization of nodes that separates bitcoin from every other crypto competitor, and by some margin.

I'm not really sure how a small block size prevents centralisation?

An increase in blocksize means an increase in propagation delay. Too much delay and miners who are closest to the most recent block get a head start mining the next block. Mining is suppose to be a lottery, not a race.

Research done on the matter shows that for each kb above the current 1mb block, 80ms of delay propagation is added.

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

#159

Post by scrumbledober »

where_do_i_live wrote: post #151
tcoppi wrote: post #112

Earlier quoted context omitted.

CBOE settles to Gemini's spot price, not GDAX. The prices between exchanges differ dramatically currently.

You are correct it trades to Gemini's spot price, but you are wrong in terms of the difference between the two. As I write this there is a 5 cent different between GDAX and Gemini.

in general they are very close but at times of extreme volatility they can differ quite a bit, as was the case several days ago when GDAX surged up past $19,000/BTC and then crashed.

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

#160

Post by jerguismi »

user5994461 wrote: post #73
LrnByTeach wrote: post #40

I am trying to understand risks with arbitrage for professional traders with BTC spot (at Coinbase gdax) and CBOE Futures contract. Let us say, some professional trader "Short sell CBOE Future contract & Buy BTC Spot at Coinbase simultaneously" At the time of this writing, Futures contract short sell @ $18700 and BTC Spot buy @ $16700 simultaneously. http://cfe.cboe.com/cfe-products/xbt-cboe-bitcoin-futures you wait…

>>> case 1: Bitcoin price shoots to $25,000 >>> case 2: Bitcoin price drops to $8,000 case 3: one of the exchanges canceled your order shortly after they were done. case 4: the exchange refuses to pay you out for whatever reason they invent. case 5: the exchange goes bust, either seized by the police, hackers or the owner outright left with all the money. In all these cases. You are likely to loose 100% of the sum yo…

> In all these cases. You are likely to loose 100% of the sum you invested.

Nah, for example in case 3 you don't lose your full capital. You just have either position open without hedging the risk whatever reason.

Case 4, case 5, for you to lose your full capital it has to happen for both exchanges.

There are risks and I'm not saying that it might make sense to take those risks, just saying that you are now giving equally wrong picture of the risks.

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