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Exactly! BTC futures or derivatives were precisely the tools that were used. With Bitcoin derivatives, essentially you don't even need to own any Bitcoin at the

Exactly! BTC futures or derivatives were precisely the tools that were used. With Bitcoin derivatives, essentially you don't even need to own any Bitcoin at the present to trade since it's a future contract. BTC price reached its peak at $20,000 on December 17, 2017 which happened to be the exact same date that the CME Group (Chicago Mercantile Exchange) became the first provider of Bitcoin derivatives to the market. Immediately BTC price started dropping down the next day and it went down all the way to $13,000 only within the next five days! Not much needed to be said after that. FYI: https://ethereumworldnews.com/report-crypto-platform-bakkt-used-bear-market-to-accumulate-digital-assets/ https://ethereumworldnews.com/report-crypto-platform-bakkt-u...

jraedisch 7y ago
Then why isn't everybody shorting everything all the time?
- netwanderer3 7y ago
  Because traditionally short positions carry more risks. You would only keep short positions for a long period of time if you have enormous amount of capital to sustain it. Short selling strategies and derivatives were often utilized to artificially deflate prices and conduct “bear raids” on vulnerable stocks.
- jfengel 7y ago
  Shorting exposes you to effectively infinite upside risk. If you shorted one BTC at $4,000 a few months ago, today you'd have lost almost $5,000. If it goes to $20k again, you could be out $16,000. It's not like a regular asset, where the most you can lose is what you put in. You could lose literally everything. In the case of stocks, there is some limit in the sense that there's an underlying asset. There's some dispute as to the real long-term value of a share of Facebook or Netflix or Google, but ultimately there is one: your share entitles you to a piece of the profits of that company. It's still possible to lose a huge amount of money shorting stocks (say, you short a nearly-worthless stock in a drug company whose product is surprisingly approved), but it's very rare. With bitcoin, there's no underlying value to the asset. That makes it extremely volatile; there's no sound way to guess what it could ultimately be worth. Further, unlike stocks, there's no regulator trying to put a damper on price manipulation. (Basically, every dirty trick that was ever tried in the stock market now has rules against it, but they all get dusted off and tried again.) So shorting BTC puts you at significant risk. Some people are long on BTC because they think that ultimately there is a real value there, and happens to be higher than the current trading price. Their willingness to do so is what will ultimately determine that long-term price. Shorting it is betting that they're wrong... assuming you have the financial wherewithal to wait for the "long term". Or are willing to assume the risk that you're right in the short term, too.
sprash 7y ago
Just because you can short futures doesn't mean you can effectively short bitcoin. You see this immediately if you look at the forward prices which are vastly different from the actual price. There is no instrument to borrow and short real Bitcoin.
- netwanderer3 7y ago
  I'm not sure if I understood you correctly as there are multiple ways one can short Bitcoin at the moment if they wish to. But in the end I think we all need to remember that any theory presented by anyone here would only serve as a hypothesis based on speculation. There's no way to prove it as nobody really knows what's going on except those key individuals involved.

jraedisch 7y ago

Then why isn't everybody shorting everything all the time?

netwanderer3 7y ago
Because traditionally short positions carry more risks. You would only keep short positions for a long period of time if you have enormous amount of capital to sustain it. Short selling strategies and derivatives were often utilized to artificially deflate prices and conduct “bear raids” on vulnerable stocks.
jfengel 7y ago
Shorting exposes you to effectively infinite upside risk. If you shorted one BTC at $4,000 a few months ago, today you'd have lost almost $5,000. If it goes to $20k again, you could be out $16,000. It's not like a regular asset, where the most you can lose is what you put in. You could lose literally everything. In the case of stocks, there is some limit in the sense that there's an underlying asset. There's some dispute as to the real long-term value of a share of Facebook or Netflix or Google, but ultimately there is one: your share entitles you to a piece of the profits of that company. It's still possible to lose a huge amount of money shorting stocks (say, you short a nearly-worthless stock in a drug company whose product is surprisingly approved), but it's very rare. With bitcoin, there's no underlying value to the asset. That makes it extremely volatile; there's no sound way to guess what it could ultimately be worth. Further, unlike stocks, there's no regulator trying to put a damper on price manipulation. (Basically, every dirty trick that was ever tried in the stock market now has rules against it, but they all get dusted off and tried again.) So shorting BTC puts you at significant risk. Some people are long on BTC because they think that ultimately there is a real value there, and happens to be higher than the current trading price. Their willingness to do so is what will ultimately determine that long-term price. Shorting it is betting that they're wrong... assuming you have the financial wherewithal to wait for the "long term". Or are willing to assume the risk that you're right in the short term, too.

sprash 7y ago

Just because you can short futures doesn't mean you can effectively short bitcoin. You see this immediately if you look at the forward prices which are vastly different from the actual price. There is no instrument to borrow and short real Bitcoin.

netwanderer3 7y ago
I'm not sure if I understood you correctly as there are multiple ways one can short Bitcoin at the moment if they wish to. But in the end I think we all need to remember that any theory presented by anyone here would only serve as a hypothesis based on speculation. There's no way to prove it as nobody really knows what's going on except those key individuals involved.