Will Bitcoin Futures Bring Us Back to US Dollar Dominance?
What are the Bitcoin futures?
Bitcoin futures contract is the obligation to sell or buy a certain number of Bitcoins at a predetermined price before the contract expires. The initial margin, which is the equity required to initiate a futures position, can only be 10-15% of the transaction amount. In this case, the effect of "leverage" appears and market participants can obtain a relatively large income.
Derivative financial instruments are investments with high risks, because if the price of the underlying asset is predicted incorrectly, market participants will lose way more than they initially invested. Execution of obligations under futures contracts is guaranteed by the exchange based on the legislation within which it operates. Now I want to share my own opinion on this matter. Since everyone says that Bitcoin is a new gold, I want to say that futures will turn Bitcoin into gold in the worst sense of the word. The process of Investing in gold. If you suddenly decide to invest in gold or just want to find out how it can be done, you will learn the fact that nobody will sell gold to you - you can pay for it, but you do not put it in your pocket, the gold will remain in the bank's storehouse. Thus, a gold futures is obtained, that is, you can get the difference in price, but not the commodity itself. The same situation might arise with Bitcoin.
What did we have before that?
Bitcoin is a limited asset, as you know you can only "mine" 21 million Bitcoins. With the introduction of futures, this limit will be removed. You do not have to directly buy Bitcoin itself, you just open the position on the futures and gain from the growth or lose in case of a fall. Such a model of speculation with Bitcoin will be observed in the market and will be actively promoted, thus we get that the US authorities will gain control over Bitcoin. There is a fear that the appearance of futures will attract many speculators who will receive a familiar and understandable tool for trading on the exchange. The most important thing is that there will be dollars, not scandalous USDT.
What are the advantages for the USA?
Market control, the authorities do not want the constant appreciation of Bitcoin. There are some talks that large market players will now know more about when to buy or sell. Regular market players of course don't possess this type of information. This control will affect the growth of Bitcoins. I doubt we will see the same growth as today (> 20% in 1-2 days). But most importantly, as already mentioned, the fiat dollar will be back, the exchange will be tied to the dollar, which means that the main value of cryptocurrency (decentralization, uncontrollability), and indeed the idea of using it will disappear. And do not forget that the American stock exchange is not the "purest" player in this market, in its history you will find many dark stories, scandals.
Well, time will tell if my fears are justified or not. All the best!