RE: Is the CBOE leaving Bitcoin a good thing?
They could be a good thing...if they legally had to buy a portion of bitcoin depending on the market. What number exactly...I'm not sure. Perhaps have the option to cover the "bets" with bitcoin, and then force them to hold enough to cover a certain percentage of the bets. I dunno...
I thought they might be a good thing...then I realized they were just bets...and yeah...they aren't that great. But they do give a little publicity. That's about all I can think they're good for. They may even add instability to the market, because those bets do effect the price. It's too new. I'm not sure anyone really knows. Just like crypto being too new for them to really know what to make of it. Futures based on crypto...FFS...
But, I think only giving it a year is not enough time...if they were worth keeping around at all. And I'm not sure they are, unless they are forced to keep a certain amount of the crypto they're betting on.
Yea these being cash settled were essentially just like betting on a price change without any effect on the underlying asset.
Isn't it kinda that way with other assets though? They don't buy corn when people bet on the price of corn, do they?
Correct, but one of bitcoin's selling points was the hard cap on supply. Cash settled derivatives dilute that premise.
Not really. They aren't the same. Sure, you get to hold a piece of paper...well...not even...a digital confirmation that you hold an asset linked to the price of bitcoin. But you can't do the same sort of things with it. It can't be stolen the same way...but you can't transfer it either. Bitcoin is same as cash pretty much, and even better in some ways. Sure, you can't spend it everywhere, and it does cost a bit to transfer it, but the places you can use it will increase. What can you do with futures? Just rely on the company that issues them to pay them back. What happens if there's a hack or major crash of the servers? Probably the same as bitcoin, you might just lose it. But at least with bitcoin you can back it up. With futures, you're reliant on them. It's like holding bitcoin on an exchange kind of. Maybe lower chance of getting it stolen. Though they could still hack their computers and steal their cash from the bank.
Yes, I am agreeing with you that they aren't the same, not even close. I am not a fan of cash settled futures in the least. They are ok as a hedging vehicle for miners but that is just about it.