The simple suggestion of having Bitcoin Futures settling in $USD terms is simply way too funny to even begin thinking about..!!
#Bitcoin Futures..?? OMG that’s hilarious..!!
#Bitcoin Futures..?? Simply way too funny to even begin thinking about..!!
There appears to be a lot of hype going around that #Bitcoin Futures are coming to the Market and for me the pure thought of this is simply too hilarious to think about.
Let me explain...
Anyone unfamiliar with the Futures Market, it is simply a market that allows you to bet against the future price of an asset that you would like to take a position on.
In simple terms, if you think something is going to go up in value, you take a "Long Position" and if you think something is going to down in value, you take a "Short Position".
Basically they are a bet..!!
To make them sound exotic, these bets are otherwise known as "Derivatives" or "Futures Contracts" with the term "Derivatives" applying to the Financial Instrument who's value is "derived" from the performance of the underlying asset.
Followers of the Spot Gold and the Spot Silver Markets will be more than familiar with the shenanigans that goes on in these Markets, otherwise known as "Paper Markets".
These highly manipulated and fraudulent "Paper Markets" are what in essence are propping up the garbage Financial System that has simply morphed into nothing more than a Global Casino of Bets and it is this Global Casino of Bets that is about to face its biggest challenge ever..!!
#Bitcoin Futures settling in $USD terms
As with most Financial Derivatives, the Contracts are settled in $USD terms and in most cases the physical underlying asset is totally irrelevant.
Put simply, the "Paper Markets" could short the Spot Gold Price with a 300:1 naked short sell forcing the price of Gold down and simply settle the Contracts in $USD terms on expiration of the Contract.
No Gold ever changes hands.
The same will be for #Bitcoin..!!
"Paper Markets"
What most people fail to understand is that these "Paper Markets" are doing nothing more than push the risk further out into the future and allows prices to pushed in any direction as they choose.
The suggestion of having #Bitcoin Futures settling in $USD terms is simply way too funny to begin thinking about..!!
One simple scenario that could happen if #Bitcoin Futures go ahead
There are many ways that #Bitcoin Futures could go and one simple scenario that could happen is that $trillions of Fiat Currencies could be printed to naked sell #Bitcoin on the Futures Market, nailing the "Bitcoin Futures Price" to the floor.
They could have #Bitcoin Futures trading at $1.00 if they wanted..!!
Maximum cap of 21,000,000 #Bitcoins
As we all know, there is a maximum cap of 21,000,000 #Bitcoins that will ever be mined.
This maximum cap is fundamental to #Bitcoin.
The scenario I am talking about is what would happen if Central Banks "Naked Short Sold" Bitcoin Future Contracts at 300:1.
In other words they start selling 21,000,000 x 300 = 6,300,000,000 Bitcoin x $10,000 = $63,000,000,000,000..!! ($63 Trillion).
#Bitcoin would soon hit $1.00..!!
This would be a small price to pay considering there is a whopping +$750 Trillion of Global Unfunded Futures Liabilities relying on the Fiat Currency System..!!
Second scenario
Of course there is a second scenario that could happen if #Bitcoin Futures go ahead, and that is one that finally unmasks the real problems of the Garbage Derivatives Market..!!
It would simply take enough people to say "Stuff your Paper Garbage" that could be the final nail in the coffin for the Financial System as people stick with the real value of #Bitcoin.
Should this scenario play out, then the +$1,000,000 price target set for #Bitcoin could come sooner rather than later.
Earlier on in the year when #Bitcoin Futures were first mentioned
The suggestion of having #Bitcoin Futures have been talked about all year.
Earlier on in the year when #Bitcoin Futures had been rejected by the S.E.C, I published this short video.
For the ones who missed the video I blogged in March, here is the link......
I was happy when the SEC denied the Bitcoin ETF. If you watch, every morning, as 'someone' dumps billions in gold contracts using a "market order" (ie; I don't care what price you get for my gold), you will know that the gold price manipulation is accomplished very simply and easily by 'someone' with access to unlimited freshly printed dollars.
On the other hand, we already have bitcoin derivatives on bitshares. It's a good thing that nobody with motivation to manipulate the price is using them. There is simply no volume on bitchares.org - openledger.info. If there were, then we could count on some level of manipulation.
@stephenkendal this is crazy. Thanks for explaning the entire thing about derivatives in simple words easy to understand for everyone. And both of the case scenarios are funny, and the funniest is that they would be selling derivatives of trillions of bitcoins that would never exist, and people would be buying something impossible. But that is what current "crazy" financial system has been doing with stocks, right? @gold84
By the way, I had a new idea about adding the "supporting communities around the world link" for the front-end of steemit. This is what the steem blockchain has the power to do, and what is doing.
https://steemit.com/utopian-io/@gold84/we-need-a-supporting-communities-around-the-world-link-for-steemit-front-end-to-show-how-the-steem-blockchain-is-adding-value-in
Once you have the chance to give your feedback, it will be greatly appreciated!
Good to hear your toughts on this, I am learning here :)
Shared on LinkedIn. Stephen
Shared on twitter. Stephen
Cboe Says It Will Start Bitcoin Futures Trading on Dec. 10. Bitcoin futures will begin trading 6 p.m. Sunday evening in New York, Chicago-based Cboe said in a statement.
That's too bad. There goes the benefit of having only 21,000,000 bitcoins ever!
Thank you for the excellent article. The whole situation with bitcoin resembles a casino. And as you know in the casino wins only the casino itself
That will be an interesting story to follow and see the price movement in the coming months.
A great post, I am sure it will be helpful for many readers, resteemed.
BTC is not a commodity and there is little point in trying to buy future when you can buy now on an exchange and have it right away. After all there is no need to pay a storage fee when you take actual delivery as oppose to gold or sugar or oil. Why let yet another middle man take your money?