Bitcoin bubble- what happened?

in #bitcoin7 years ago

BTC drop - what happened?

Here’s what could have happened (aside from SK’s recent exchange hack - which I DONT think affected the rest of the world much). However, if the Youbit hackers were the same as the NiceHash hackers and all of a sudden dumped their newly thieved wealth, it could have compounded what I say below.

Just a theory, but when the Bitcoin futures market launched last week, there were a lot of “accredited investors” in the mix. An accredited investor = annual income $200-$300k+; net worth $1 million +; or general partner, executive officer, director or related combination for the issuer of unregistered securities.

I’m not blaming them, but just putting into perspective how this thing could have logically played out. The Russian and Chinese governments have both manipulated the BTC swinging prices in the past year just by making “announcements” on the news. So, here’s how I see futures traders could have had an effect.

  1. Hype leading up to BTC futures fuels the BTC price up ($16k).
  2. Futures market opens. Price hits $19K.
  3. Very large holders of BTC also buy futures and short BTC.
  4. Those holders sell off a ton of their BTC holdings at $19k (massive profits).
  5. These same holders who sold, have now caused a “correction” down to $11k.
  6. Now, those who shorted BTC with futures profit more by selling their short positions.
  7. Then, they jump in and buy more BTC at $12k.

BTC goes back up and these “day traders” are wealthier than they were before - essentially manipulating and double-dipping. It’s a very lucrative and unique opportunity. But it also presents swings so those who wanted to get in can do so with a pretty good assurance that they’ll make something in the near term.

I’m HODL. Watch the charts, BTC is still up $4k from a month ago.

image

Sort:  

Congratulations @sporte77! You have received a personal award!

1 Year on Steemit
Click on the badge to view your own Board of Honor on SteemitBoard.

Upvote this notificationto to help all Steemit users. Learn why here!

Congratulations @sporte77! You received a personal award!

Happy Birthday! - You are on the Steem blockchain for 2 years!

You can view your badges on your Steem Board and compare to others on the Steem Ranking

Do not miss the last post from @steemitboard:

Are you a DrugWars early adopter? Benvenuto in famiglia!
Vote for @Steemitboard as a witness to get one more award and increased upvotes!

Coin Marketplace

STEEM 0.19
TRX 0.13
JST 0.030
BTC 62996.86
ETH 3452.21
USDT 1.00
SBD 2.49