Another Futures Start. How Can "Whales" Influence the Market?

On the night of December 18, CME Group, one of the largest commodity exchanges in the world, began trading Bitcoin futures on the CME Globex platform. Initially, the price of monthly contracts increased from $ 19,500 to $ 20,650. But after that, the fall followed - the value dropped below $ 19,000.

It is worth noting that the cash settlements on the Chicago exchange are based on the CME CF Bitcoin Reference Rate (BRR) - the reference rate of Bitcoin in relation to the US dollar. The data is taken from the following platforms: Bitstamp, GDAX, itBit and Kraken.

Comparing the start of trading futures on the CME Group with the commencement of trading at the Chicago Stock Exchange (CBOE), it is worth mentioning that at the last they were going quite smoothly, although the volumes were also small. It is not yet known whether Bitcoin will recover or it will continue to grow. The first futures of ITS expire on January 17, 2018, the CME Group contracts on January 28. Bitcoin futures are a completely new factor that will be present in the cryptocurrency market. It is not clear how this factor will affect the price of Bitcoin and its behavior. Right now, the whole situation resembles a mode of expectation rather than active trading.

What can we expect from this?

As you know 40% of Bitcoins belong to a small part of investors, according to various estimates, the number of investors reaches 1000. They are also called the "whales". So, if those "whales" short Futures, then they expect to get their benefits on this. They need to ensure that the Bitcoin price at the time of closing futures should be lower than at the time of the contract. To do this, it is likely to expect market manipulation on their part, as already mentioned, with possession of 40% of all Bitcoins, this is not difficult. In addition to the benefits of futures, they will benefit from the sale of the asset itself, selling Bitcoins at artificially soaring prices.

There is also a theory of long position. That is, investors expect that the Bitcoin rate will be higher at the expiration of the contract than at the time the contract was signed. It would be more logical for them to buy substantial amounts of Bitcoins before closing the contract to artificially raise the rate. This theory looks less likely since if they raise the rate before closing the futures, they will not have the opportunity to buy Bitcoin at a low price. All information presented above is just for informative purposes only. We are waiting for your thoughts and ideas in the comments section.