How Futures Trading Changed Bitcoin Prices In 2018
Today I do a market roundup, some brief technical analysis and talk about the San Fransico FED and how their economic theory suggests it was Bitcoin Futures that crashed the market. Check out the launch offer for my new course The Master Cryptocurrency Trader at: https://www.cryptoversity.com/courses/the-master-cryptocurrency-trader/
Sources:
https://coinmarketcap.com/
https://www.nytimes.com/2018/05/07/technology/bitcoin-new-york-stock-exchange.html
https://www.frbsf.org/economic-research/publications/economic-letter/2018/may/how-futures-trading-changed-bitcoin-prices/
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I think there is truth in the fact that the starting of Bitcoin futures caused the wild market fluctuations. The present Bitcoin future contracts at the CBOE are cash settlement meaning that neither the buyer nor the short seller have to own any bitcoin. They just settle up with USD at the end of the contract. This is just pure gambling.
IMO, this cash settlement takes away one of Bitcoin's greatest advantages - that there is only a limited amount of Bitcoin. And this enhances Bitcoin's value because it is a scarce commodity. Cash settlement futures could create an infinite amount of BTC being traded in the derivatives market.
If the NYSE requires the futures contracts to be traded in actual Bitcoin, that I believe will help raise the price of BTC.
Interesting article. I believe it was a collection of factories such as tax return session in the USA, Chinese New Year and of cause all of the weak hands folding as the price dropped.
No matter, things will turn around soon and the latest nonsense from a seemly senile warren buffet will not affect us long turn, rat poison lol, he is too old to fully understand what bitcoin and crypto currencies are doing.
Hey Chris
What are your thoughts on using trading bots?
Thst is very nice post
Thanks for sharing update cryptocurrency news
Coins mentioned in post:
Despite the recent FUD, there will come a day we do get some news related to this but we need to have in mind that the regulators work for the government so they are never efficient when it comes to decision making. The regulation of cryptocurrencies in general is not something that will happen overnight as there are many considerations to review. There are also different agencies that will want to be involved in the process which is also not clear what it is given that most financial market laws differ among states and there are few federal laws that could immediately apply to the space. States will surely want to have a piece of the say as seen by states like Wyoming and Arizona whom have had their own views and laws passed. Also, I imagine that there are others in the government that are interested in ensuring the industry stays in the US given the potential for growth and innovation the technology has for the economy.