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RE: What do the introduction of Futures Products really mean for the price of Bitcoin?
I am expecting to see an initial rise because of the euphoria, but hedge funds are smart and they know they have enough money to make the markets do what they want, that is why I am thinking there will be a big drop after the initial run. Why would the hedge funds want to buy something at an ATH when they could drop the price and then pump it back up later... Just my thoughts, either way I am going to be prepared. Bears and Bulls can both make profits here. Only the Pigs get slaughtered.
The problem with the futures and the big players entering the market is that Wall Street has a great deal "free money" to play with from all the QE from the FED.
These thoughts are very similar to my own...
Hard to argue that. The shorts will have the balance sheet to stomach the losses on the way up.
This is true, I just don't see why they would really bother taking them knowing they also have the pockets to push markets in their favor.
The futures are cash settled, low interest rates, no cost of carry, would suggest futures and physicals trade in line. Futures market gets pounded and physical price comes down too. eg. algo is trading both markets, it sees futures are getting hit, it bails on the physical and seeks opportunity to buy the future or spot at the lower levels. Basis traders will be eager to see how spot trades relative to front futures month, and how near and longer dated futures months behave relative to one another. One theory is the spreads will be sentiment driven.
They should trade in line for the most part. It just wouldn’t surprise me to see some push for lower prices. Like I said, I don’t see smart money buying into something at ATH when they have the money to change the price. Hell there may even be existing whales that will use futures to hedge risk driving that market down.