The Wall St. propaganda is coming in thick now that the CME Group has begun trading in Bitcoin futures. Reuters is running a pure puff piece this morning reminding us why this is so good for Bitcoin as the price capping will now begin in earnest.
More liquidity and smoother pricing curves cannot offset the synthetic short dollar position of the underlying Bitcoin asset.
“We were waiting for the launch of the CME futures because the price is more robust and the exchange trades much larger volumes,” Jose Miguel Nascimento, head trader at cryptocurrency fund Solidus Capital, said in a telephone interview from Mexico City. “Futures are a very positive development for the bitcoin market, as it will help everyone from miners to traders hedge risk, and having a price curve will help limit price swings.”
Why does anyone think that "limiting price swings" is a good thing? And, moreover, why does anyone think that the CME Futures Market will do anything except increase volatility once the market becomes deep enough to begin wagging the dog?
We've seen this in gold where price volatilty is always, tactically, to the downside with billions of futures being dumped onto the market literally out of nowhere.
And anytime gold moves up on unexpected news, it is capped below meaningless resistance points to limit investor sentiment from turning. A robust enough bull market will overwhelm these shenanigans but expect even more 'tape-painting,' 'close-banging' and 'stop-loss raiding' than we see now.
Because now it will be dollars on the line and not Bitcoins themselves. And those can be borrowed from the Fed at 1.25% overnight.
The good news in all of this is that the Fed has to keep raising interest rates to bail out broke governments and their pension systems. But, there is still a ridiculous amount of liquidity out there sloshing around to be deployed in defense of a failing system.
Curated for #informationwar (by @openparadigm)
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Time will tell how the futures markets affect the underlying price.
I think the people who expect the futures markets to set the price of bitcoin like we see in gold are actually going to be in for a rude awakening. Unlike gold, bitcoin is a true 24-hour market with mass participation direct to retail traders.
Mrs. Watanabe in Japan isn’t going to care that Chicago is closed and the future spot arb is $1,200. She’s just going to buy or sell based on what she thinks is the thing to do.
You may be right about this. I would rather warn people of the potential for bad things than be overly optimistic... but I do agree that the lack of 24/7 coverage by the futures market is its Achilles' heel for manipulating the price... until, of course, we get futures on the Topix and in Shanghai and Singapore.
... just sayin' :)
Maybe the Winkleviss Twins will keep things in-line. :)
Here's hopin' ;-)
Great piece. I think the creation of Bitcoin futures will be seen as an end of an era of both great growth, and volatility, for BTC. Maybe I'm wrong, but it just seems like calls for 100k BTC have become less likely since the futures trading began.
Bitcoin hesitated on Monday, after facing the $ 20,000 mark a day earlier, and retreated at the same time as the long-awaited launch of the CME Bitcoin futures.
On Bitfinex exchange based in the United States, Bitcoin drops 8.13% to $ 17,717.00 at 9:52 AM ET (14: 52GMT).
The digital currency, which is trading 24 hours a day, 7 days a week, has fallen from a record high of $ 19,891.00 the day before.
The cryptocurrency fury was conducted this year by Bitcoin, the largest digital currency with a market capitalization of $ 303.58 billion, with cumulative gains of more than 1,800% since the beginning of the year.
The Chicago Mercantile Exchange (CME) launched its own future on Bitcoin Sunday after the launch of futures on CBOE a week earlier.
The launch of futures has met with a mixed response from investors as it offers market participants the opportunity to place bearish bets on bitcoin, which could put pressure on the price of digital currency.
Other market participants, however, believe that the launch of futures paves the way for the creation of an established asset class, which would stimulate institutional demand.
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