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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

#141

Post by joshuahedlund »

sametmax wrote: post #25
idibidiart wrote: post #19

Is this just legalized gambling?

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

> That's pretty much what people use stock market for anyway

That's what I used to think until I began to understand (through Mr Money Mustache posts) that lots of people with large amounts of money invest (i.e. buy-and-hold) in the stock market because, despite the annual ups and downs, it has historical net annual gains of 7-10% over the last hundred years...

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

#142

Post by Asdfbla »

sametmax wrote: post #25
idibidiart wrote: post #19

Is this just legalized gambling?

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. Maybe if it stabilized and became a proper store of value (whether the incentives to keep a cryptocurrency stable are even there remains another question), but now it's just so hype driven.

I guess ultimately 'the point' of it all it doesn't matter, people can trade in imaginary goods no problem. Still exposes the strangeness of modern financial markets.

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

#143

Post by Qub3d »

nawtacawp wrote: post #125
user5994461 wrote: post #73

Earlier quoted context omitted.

>>> 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…

Just want to add for those new to btc, these are not far fetched scenarios — they have all happened in the past.

I personally just lost $200 on NiceHash; not a big sum, but enough to give me a scare. Its frustrating, because I've had concerns about this happening before, but its so difficult to find a good service outside Coinbase.

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

#144

Post by Tepix »

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…

What happens if the price remains near the current price?

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

#145

Post by mlevental »

pas wrote: post #91
pash wrote: post #24

Earlier quoted context omitted.

More precisely, it is possible to replicate the final value of a futures contract (on Bitcoin or any other asset) up front, by trading in the spot market, even though a futures contract’s payoff is uncertain until it expires. Whatever the future’s value ends up being at its expiry, you can put together in advance a portfolio of holdings that will have the same value simply by borrowing a certain amount of cash and us…

> by borrowing a certain amount of cash and using it to buy in the spot market a corresponding amount of the asset on which the futures contract is written; So if 1 BTC@januar17 is priced 10 000 USD, you borrow 16 000 USD and buy 1 BTC. How does that help you? > if you do this, the value of your holdings in cash (after paying interest on your borrowings) and in the asset are guaranteed exactly to equal the value of t…

https://www.investopedia.com/terms/c/cash-and-carry-arbitrag...

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

#146

Post by banderman »

Erlich_Bachman wrote: post #120
Havoc wrote: post #87

The concept of layering futures on top of BTC is equal parts crazy and promising on the entertainment front. All we need now is someone adding leverage and hilarity shall most certainly ensue

You can already trade cryptocurrencies with leverage on many major crypto exchanges.

Correct. All of the big unlicensed and unregulated exchanges that provide no transparency of their ownership, or as to how customer balances are held allow significant margin trading. And they have no impartial 3rd party proof of reserves.

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

#147

Post by tehlike »

ryanwaggoner wrote: post #139
tehlike wrote: post #17

Earlier quoted context omitted.

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.

Wait, I’m sorry, are you claiming that Bitcoin HODL’ers gave us the ‘buy the dips’ strategy? :)

No, i said they made it mainstream, to the guy who had 500$ as investment.

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

#148

Post by fernandopj »

tehlike wrote: post #70
a_imho wrote: post #61

How would a bitcoin crash look like? Any far reaching consequences? Can one safely ignore bitcoin and remain ignorant?

if you want to hedge against a significant rise, you might wanna hold an amount you are comfortable losing.

This. And it is what I say when friends & family say it "must be a bubble" or "journal X say stay away". Investing/risking is not a binary, all or nothing bet. Just set aside some money you have not immediate use for, and you won't regret losing or many nights without sleep, if a crash comes. It is still early enough, and one can learn a lot of crypto technology, which won't be going anywhere regardless of future prices.

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

#149

Post by Klathmon »

theadamp wrote: post #81
em3rgent0rdr wrote: post #46

Earlier quoted context omitted.

Actually, Lightning Network will significantly increase Bitcoin's transactions per second and reduce transaction cost.

In 18 months ;)

To be fair, Lightning works, and it works now on the Bitcoin mainnet.

The idea is sound, the code is written and somewhat tested, and it has been used in a very controlled fashion on the real bitcoin network already.

At this point it's just a matter of further testing and validation that the logic is sound and there isn't anything everyone is missing, and getting vendors on board and adoption started.

Still no guarantee it will happen, but it's looking more likely that it will at least make a good push, and it's no longer a vaporware promise of "in 18 months".

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

#150

Post by Simon_says »

sah2ed wrote: post #56
esarbe wrote: post #39

Earlier quoted context omitted.

You are talking about speculators. Anybody that holds an financial instrument for less than five years (my definition) is a speculator. Warren Buffet is an investor. He buys a business (he thinks) he understands and then holds on to it while it generates profit. It really bothers me that - in business terms - investors are nowadays just lumped together with speculators. Investors try to build something while speculat…

> Investors try to build something while speculators just try to make money, no matter the cost to anybody else. Based on your definition, what would you call Carl Icahn then? I tend to agree with John Bogle's definition that both types of people are in it for the money, the only fundamental difference is the time horizon either is willing to wait to reap the returns from their investment. [0] https://en.wikipedia.or…

> what would you call Carl Icahn then?

Asshole?

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