Vlog 156: Bitcoin futures market opened last night.
I was sleeping when the markets opened.
Nobody knew what would happen. But it's fairly calm.
BTC is around $16000.
What is a future?
It's an agreement between two parties to deliver a certain commodity/stock in the future for an agreed price.
For Example:
The oil price = $60 a barrel today.
A company want to secure a barrel of oil in the future (let's say April 2019) and is willing to pay $70 for that barrel.
A counterparty is found that wants to take that deal.
Now when April 2019 arrives and the price of a barrel of oil is $150, the company made a great deal because now they can buy the barrel for $70.
But the opposite also applies.
When the price is $30 per Barrel in April 2019 than then the company made a horrible deal.
They have to pay $70 for the barrel that has a market value of $30.
This same principle can now be applied to Bitcoin.
You can trade them here: http://cfe.cboe.com
Future Price March 2018 at the moment: $18.400
I talk about it more in my vlog (starts from 1:03)
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I think we won´t really hear a lot about futures actually influencing the BTC price at all as they are all cash settled at the moment and therefore don´t touch the real BTC market at all. But let´s see what´ll actually happen during the next weeks. For sure we got interesting times ahead of us :)
I share your concerns about the futures markets being used for manipulation and the recent BTC price run up we've seen could even be whales buying up as much as they can getting ready to dump and then short the market. Also, won't being able to invest in futures reduce the demand to actually buy and own Bitcoin since it's no longer necessary to do that in order to invest?
It's basically like gambling only with bitcoin prices :)
It's also like selling stuff. You buy 5 icecreams for 0.50$ each, and then try to sell for 1$. But do you really know that you sell all those icecreams in 5days? Maybe you will sell for less than 0.5$, maybe 0.25$ because nobody is interested in fish taste icecream.
I only thought of the speculative aspect of it. Nice way to conceptualize how futures work.
yeah pretty much :)
Completely OT (sorry(, but didn't realise that Steam was DPOS. Just went reading up on it. Going to slap a vote in since you've been so nice on engagement for my first couple of weeks AND you helped get that app done, which has been really useful. It's why I knew this post was here!
On topic, the futures thing sounds interesting. I wonder how they are going to deal with the absolute mania of the market.
That is the thing, nobody knows the future...
Good luck to all investing in cryptocurrencies...
Yeah DPOS all the way :). And glad to read you like the app!
Wow friend beautiful explanation with examples about the working and awesomeness of bitcoin price in future. Thanks, your every suggestions means great for us. Have a great time friend.
yup i think bitcoin have great future.
I'm of the mind that the more volatility will come once their is time for the CBOE and CME Group have put in at least six months of history into this product. Also keep in mind the NASDAQ will also be adding a bitcoin product in the second quarter of 2018.
Excellent video my friend, well i heard about future markets in commodities before but this is first time i heard about bitcoin future markets, well in my opinion investing in bitcoin futures will be a pure gambling because we all know that bitcoin has so many flaws and once peoples becomes aware about these flaws then we surely see a huge momentum shifted back on other coins and may be on steem, if someone ask me about steem future market then i will be very much interested in it but for bitcoin it's just huge risk, thanks for sharing this information with us, Stay blessed
Good thing u were sleeping. I was up nd sold mine @ $14,8K :-(
I always sell gradually did you sell everything?
Yes...but thanks to Ethereum I recovered my loses this morning. :-)
$18.40 lol, that's outrageous,..From $16,000 to $18.40 is almost impossible in three months unless the big boys really have something cooking underground..We wait for the future
Bitcoin has gone up that amount last month. Hardly outrageous.
Oh, my bad , I read it as $18.40 cents, lol, because of the point (.) you used. We use commas around here ($18,400). Bitcoin could be way above that in three months. Let's wait for the future🙂