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My 2c: concern is that btc futures becomes like gold futures which are totally fraudulent and used to manipulate the market. But gold is a bizarro land that’s c
by rajacombinator 9y ago
My 2c: concern is that btc futures becomes like gold futures which are totally fraudulent and used to manipulate the market. But gold is a bizarro land that’s cash settled vs paper or something super absurd. There’s not really a functional way to short “physical bitcoin” right now that I’m aware of other than participating in the tether scheme. So even if the NY Fed, for instance, came in and blasted the bid on cme btc it’s not clear it would affect the physical market. Overall I think it’s bullish just for increasing exposure of investors to btc.
- TooSmugToFail 9y agoI was also decidedly bullish initially (on the exact same grounds that you're describing), but I'm increasingly aware that this can be flipped the other way too. For example: let's say the BTC futures price is lower than the exchange price, and let's say you hold BTC; pursuing an arbitrage, you buy cheaper futures, sell BTC to make arbitrage profit; multiply this across many self-serving market agents, and you have market forces working to eliminate the arb opportunity: there's our transmission mechanism, regardless of how the futures are settled.