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I'm pretty new to trading concepts and financial markets so I may very well be missing something obvious... but from what I can make out, both CBOE and CME futu

I'm pretty new to trading concepts and financial markets so I may very well be missing something obvious... but from what I can make out, both CBOE and CME futures are cash settled, so you can't actually "short" bitcoin on them, just a derivative. Further, the total volume of contracts for March works out at somewhere around 0.01% of Bitcoin's total market cap, maybe I'm missing something, but this just doesn't seem like something that could be held responsible for BTC dropping from 20k to ~7k - the only impact I could see it having is a psychological value, but then, Bitcoin has had futures from both BitMEX and OKCoin for quite some time (fee concerns and institutional accessibility aside) with significantly higher volumes.

darawk 9y ago
Ya, this article doesn't really make sense in this particular case as an explanation for Bitcoin's behavior. Though in general I do agree that shorting is important for the health of a market, this Bitcoin bubble played out exactly like every other Bitcoin bubble, and in all those previous cases shorting was as difficult as its ever been (which, actually has never been that hard, to be frank - people always insist that shorting Bitcoin is so hard, but it's not at all and never has been).
- empath75 9y ago
  The only markets where you can short bitcoin are sketchy overseas exchanges with low volumes and a history of problems both depositing and withdrawing money. No serious investor is going to be putting money in bitfinex or whatever to short bitcoin.
  - gruez 9y ago
    >The only markets where you can short bitcoin are sketchy overseas exchanges probably because no reputable country's SEC equivalent would let that happen >low volumes bitfinex is one of the largest exchanges by volume >a history of problems both depositing and withdrawing money. if this is happening, it's not happening with any of the major exchanges that support margin trading. any time depositing/withdraw issues appear on an exchange, prices quickly deviate from the rest of the market as the supply of fiat/crypto diminishes.
  - hapnin 9y ago
    You can short Bitcoin on the Chicago Mercantile Exchange: http://www.cmegroup.com/trading/bitcoin-futures.html http://www.cmegroup.com/trading/bitcoin-futures.html
    - lvturner 9y ago
      But you can't... the future is a derivative of Bitcoin, not actual Bitcoin.
nosuchthing 9y ago
The Bitmex and Bitfinex futures markets are settled in BTC and it's been blatantly clear that someone (most likely the exchange operators) are consistently manipulating the futures market (most likely to wipe out margin traders who don't know better) with short squeezes that return back to the norm within hours. https://i.imgur.com/LpgnksQ.png https://i.imgur.com/LpgnksQ.png CBOE and CME futures being cash settled is a joke, and removes any incentive for the risk associated with the long position actually acquiring BTC, further proving the large traders just want to play with the tool for speculative market volatility and not actually facilitate using or acquiring the asset itself. https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest
- 21 9y ago
  It's not the exchanges who are behind those spikes. Source: someone who is working on a bot doing that kind of things And because of the way the market works, there is no need to coordinate with anyone else doing it (ie: those spikes are self synchronizing) Those "manipulations" also happen in the traditional markets (forex, ...), but due to liquidity and general sophistication they are much harder to spot, and dangerous to do if you don't know what you are doing (dangerous from a financial perspective, they are perfectly legal).
  - nosuchthing 9y ago
    It's not the exchanges who are behind those spikes. Please. If anyone is in a position to gain the most from market manipulation like that, it's the exchanges and there's a bucket list of evidence and malicious behavior from Bitfinex that would make it very surprising if it was some random outsider causing these types of movements. Bitfinex and Bitmex margin trading volume has increased significantly and for the exchange operators have access to (1) order book + margin call data (2) ability to falsify trades and capital due to no audits With those, it becomes insanely trivial to set some bait let the fish bite and simply drain the water or pump it back in on a whim because the order book is just a database and there's no accountability or auditing to keep the market exchanges honest.
    - 9y ago

darawk 9y ago

Ya, this article doesn't really make sense in this particular case as an explanation for Bitcoin's behavior. Though in general I do agree that shorting is important for the health of a market, this Bitcoin bubble played out exactly like every other Bitcoin bubble, and in all those previous cases shorting was as difficult as its ever been (which, actually has never been that hard, to be frank - people always insist that shorting Bitcoin is so hard, but it's not at all and never has been).

empath75 9y ago
The only markets where you can short bitcoin are sketchy overseas exchanges with low volumes and a history of problems both depositing and withdrawing money. No serious investor is going to be putting money in bitfinex or whatever to short bitcoin.
- gruez 9y ago
  >The only markets where you can short bitcoin are sketchy overseas exchanges probably because no reputable country's SEC equivalent would let that happen >low volumes bitfinex is one of the largest exchanges by volume >a history of problems both depositing and withdrawing money. if this is happening, it's not happening with any of the major exchanges that support margin trading. any time depositing/withdraw issues appear on an exchange, prices quickly deviate from the rest of the market as the supply of fiat/crypto diminishes.
- hapnin 9y ago
  You can short Bitcoin on the Chicago Mercantile Exchange: http://www.cmegroup.com/trading/bitcoin-futures.html http://www.cmegroup.com/trading/bitcoin-futures.html
  - lvturner 9y ago
    But you can't... the future is a derivative of Bitcoin, not actual Bitcoin.

nosuchthing 9y ago

The Bitmex and Bitfinex futures markets are settled in BTC and it's been blatantly clear that someone (most likely the exchange operators) are consistently manipulating the futures market (most likely to wipe out margin traders who don't know better) with short squeezes that return back to the norm within hours. https://i.imgur.com/LpgnksQ.png https://i.imgur.com/LpgnksQ.png CBOE and CME futures being cash settled is a joke, and removes any incentive for the risk associated with the long position actually acquiring BTC, further proving the large traders just want to play with the tool for speculative market volatility and not actually facilitate using or acquiring the asset itself. https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest

21 9y ago
It's not the exchanges who are behind those spikes. Source: someone who is working on a bot doing that kind of things And because of the way the market works, there is no need to coordinate with anyone else doing it (ie: those spikes are self synchronizing) Those "manipulations" also happen in the traditional markets (forex, ...), but due to liquidity and general sophistication they are much harder to spot, and dangerous to do if you don't know what you are doing (dangerous from a financial perspective, they are perfectly legal).
- nosuchthing 9y ago
  It's not the exchanges who are behind those spikes. Please. If anyone is in a position to gain the most from market manipulation like that, it's the exchanges and there's a bucket list of evidence and malicious behavior from Bitfinex that would make it very surprising if it was some random outsider causing these types of movements. Bitfinex and Bitmex margin trading volume has increased significantly and for the exchange operators have access to (1) order book + margin call data (2) ability to falsify trades and capital due to no audits With those, it becomes insanely trivial to set some bait let the fish bite and simply drain the water or pump it back in on a whim because the order book is just a database and there's no accountability or auditing to keep the market exchanges honest.
  - 9y ago