How to Assess the Current Cryptocurrency Scene?
After Satoshi Nakamoto changed the world forever with his invention, Bitcoin, the cryptocurrency market saw a massive rise. While Ethereum, Litecoin, and Ripple were some of the most popular cryptocurrencies after Bitcoin, while the total number of cryptocurrencies was more than 2,000. By 2017, the industry touched its peak as Bitcoin surpassed the $20,000 figure – a watershed considering it was not even $1 in 2010. However, then came the bloodbath…
However, after a crash occurred, following which the prices of Bitcoin and all other cryptocurrencies took a severe beating. In the midst of this, there were some projects that were exposed as scams. Some cryptocurrency exchanges were hacked, resulting in loss to many cryptocurrency owners. Hence, skeptics came forward with the million-dollar question: is cryptocurrency dead?
Is Cryptocurrency Dead?
Quite contrary to the general view, cryptocurrency is nowhere dead. Although prices took a nosedive in the last two years, volatility is slowly fading away. This may not excite the speculators; it is a great sign for the institutional investors – those who hold the key to take the cryptocurrency adoption to the next level. Some analysts believe that this institutional money will only grow over the next few years. There are also talks on moving cryptocurrencies to the Nasdaq, a move that can bolster the credibility of Blockchain greatly, and position it as an alternative to present financial options. There are calls for ETFs (exchange-traded fund) too, which is expected to simplify investment in Bitcoin and other cryptocurrencies.
Moreover, the foundational technology of cryptocurrencies Blockchain is becoming popular with real-life impact all over the world. Major tech firms, banks, and many businesses are already working with cryptocurrencies. If you are worried about regulations, then keep in mind that once a critic of cryptocurrency, China, is now competing with the U.S. by issuing digital money to streamline its government services. Last month, President Xi Jinping signaled that the Chinese Government viewed Blockchain as an important piece of the puzzle – one that can elevate the country to become a high-tech superpower.
Moreover, it is expected that Blockchain will be integrated with other modern solutions like IoT to address a slew of problems. For instance, it can provide a secure method to protect customer data. This can especially contribute a lot in healthcare institutions where privacy is highly critical. Similarly, the transparency cryptocurrencies offer can revolutionize the supply chain industry where machine learning can be used to generate real-time information about goods and create optimized routes.
Don’t judge the cryptocurrency market with their prices. These crashes have in fact cleansed the industry off weak platforms and have allowed better ventures to make a difference. These are the platforms that have highly-skilled teams who are dedicated to resolving centralization issues with their innovative solutions. As governments and industries are ramping up their adoption strategies for digital assets, cryptocurrencies clearly are here to stay.
First Bitcoin Futures Contract Expires as Bitcoin Rises
Is it a coincidence or a convergence of market forces that the first Bitcoin futures contract as Bitcoin rises? It’s difficult to be sure as Bitcoin historically dips in January only to bounce back higher than ever. What complicates this review of Bitcoin history is the factor Bitcoin futures may play. If you step back and consider all of the dynamics in play, it might not be a coincidence that the first Bitcoin futures contract expires as Bitcoin rises – on the same day.
Consider these points:
Back in November 2017 the news of Bitcoin futures markets on the CME and CBOE breaks. Right after that, hedge fund managers and affluent investors start buying up Bitcoin which drives it near it’s all time of high of $20,000 knowing full well they would be shorting Bitcoin on the futures market.
Then we have the the first Bitcoin futures contract coming in at around $15,000. Bitcoin whales then start pumping up the price of Bitcon to all time high and making truckloads of money in the process and then start selling BTC and taking their profits which leads to a panic run with BTC selloffs coming in from every direction. The hedge fund managers and other players are very happy to see this because they had already shorted Bitcoin on their futures contracts COUNTING ON THE FACT the price of Bitcoin would plunge. Which it did.
A lot of people would rightfully call “bullshit” on such market manipulations but at the same time it can’t be denied it’s brilliant. Plays like this happen on the stock market all the time. I’ve personally known investors sitting on huge blocks of stocks they own in any given company SHORTING the sale of that same stock BETTING it will go down. Sounds crazy, right? But it isn’t if you run the numbers. They’re covering their bets both ways.
BUT WAIT THERE’S MORE…
After the dramatic plunge of Bitcoin price the past 48 hours every investor worth his salt knows there is an amazing buying opportunity on Bitcoin and other coins at bargain basement prices. So investors big and small — whales and minnows alike — go on a cryptocoin buying frenzy leading to prices driving up across the board. Our founder and editor-in-chief Howard Sherman documented this earlier today.
While it is seldom clear WHY Bitcoin pricing and other cryptocoin values for that matter can move so dramatically so quickly I think we have a viable theory here that it’s no small coincidence that the first Bitcoin futures contract expires as Bitcoin rises.
Here’s an alternative theory to explain the historical price dips and highs in January; Wall Street executives always get their bonuses in mid January. Is the sudden price spike the result of Wall Street players buying Bitcoin now that they have received their bonuses? Is it the new Bitcoin futures markets? A mix of both and perhaps other forces at work as well? Nobody can be sure.
What is certain more than ever is that Bitcoin has become, in every sense, the new gold.
Bitcoin Futures on E-Trade – Yet More Proof that Bitcoin Is Still the King of Crypto Currency.
CME Bitcoin futures on E-Trade unveiled last night was just the next chapter in Bitcoin’s bright future. With a Bitcoin price slide last month yet still closing out the year on a high note of 1300%+ gains, there was talk of Ripple XRP dethroning Bitcoin as THE digital currency. Not only is Bitcoin holding steady at higher prices today and yesterday, the news of Bitcoin Futures on E-Trade just cemented Bitcoin squarely as king of the hill of cryptocoin.
E-Trade customers can now trade Bitcoin futures via the CME by placing orders through E-Trade. Expanded trading of Bitcoin futures on E-Trade is just more proof that Bitcoin is far and away the only digital currency to really make it mainstream. Truly Bitcoin is Badasseum in terms of being the very best digital currency investment anyone can make. These tangential relationships stemming from the trading of Bitcoin futures is just the next step in Bitcoin’s rise.
With nearly 4 million brokerage accounts and over 3,000 employees Bitcoin futures on E-Trade is serious business. Trading began last night and while it’s too early for any numbers, we don’t doubt they will be very pleasing to the eye. As 2018 unfolds we’re reminded all over again of Bitcoin price predictions of $40,000, $60,000 and even $100,000 before the year is out.
E-Trade is the latest online brokerage house to expand trading in this somewhat new line of Bitcoin products. Futures exchanges CBOE and CME began offering Bitcoin futures in mid-December after a wild bull run on Bitcoin pricing. With things moving so fast in the cryptocoin world, some may have forgotten that online brokers rolled out Bitcoin futures trading last month when TD Ameritrade and E-Trade began offering customers access to CBOE Bitcoin futures.
Shorting Bitcoin Futures Not Happening. Here’s Why.
According to Fox Business News today there’s very little action so far in shorting Bitcoin futures. And on the scoreboard of Bitcoin futures the CME has posted nearly 1,000 more Bitcoin futures contracts than the CBOE did on their first day. According to Fox Business News, Microsoft and Expedia among other major companies are now accepting Bitcoin for payments which is a whole other reason to explain why Shorting Bitcoin Futures isn’t happening.
For all of the talk of a Bitcoin bubble it’s very encouraging to see shorting Bitcoin futures not happening. Why? Because if all of the Bitcoin critics truly believed there was a Bitcoin bubble – just as they said – then why isn’t there a lot of Bitcoin futures contracts shorting Bitcoin? It’s more than a little interesting that all of these critics — and the public at large — aren’t placing any Bitcoin futures bets on a Bitcoin bubble.
That’s why shorting Bitcoin futures isn’t happening; no one really believes there’s a Bitcoin bubble. If all of those predictors of doomsday really believed what they said then the Bitcoin futures markets would be flooded with contracts shorting the price. But there aren’t any. When the public at large realizes this we see Bitcoin ballooning through that ethereal $20,000 ceiling straight through to $21,000 and beyond — which is the prevailing view among Bitcoin commentators.
With all of this doom and gloom on an imminent Bitcoin bubble why isn’t there any serious volume on shorting Bitcoin futures? Because no one seriously believes it. At least not enough to put their money where their mouth is and execute a contract shorting Bitcoin futures. If a burgeoning Bitcoin bubble is to be believed, where all the profiteers placing their contracts to short Bitcoin? Anyone still sitting on the fence as to whether or not to invest in Bitcoin should take this absence of shorting activity as the best possible sign to proceed.
CBOE Bitcoin Futures Day One Went Well; A Little Chaos and Climbing Bitcoin Prices.
CBOE Bitcoin Futures started yesterday to the CBOE website crashing, the Coinbase website crashing and the price of Bitcoin climbing by $3,000 or so to chalk up a 20% gain for the day.
This reverberates with an ancient Chinese saying “There is chaos under Heaven and the situation is excellent.”
What’s also excellent is that CBOE Bitcoin futures day one racked up 4,000 Bitcoin futures contracts totaling about $70 million and, to the amazement of the cynical and skeptical, the price of Bitcoin on the futures market is higher than the price of actually buying Bitcoin as this article is published. About $1,000 higher.
All said and done the price of actual Bitcoin is very close to its all-time high of $18,900 and no one should be surprised to see BTC skyrocket as the week goes on as CME Bitcoin futures trading starts in just a few days. All told I predict the best kind of upward pressure in Bitcoin pricing going right into orbit. Nat Roth wrote about the perils of shorting Bitcoin and with CBOE Bitcoin futures day one in the history books he’s right.
We feel that shorting Bitcoin would be a massive mistake and investors by and large seem to agree. The price of Bitcoin futures bears that out. The consensus of the Bitcoin futures market is that the price of Bitcoin is going nowhere but up. If proven true over the term of any given Bitcoin futures contract that means only good news for the Bitcoin bulls and very bad news for the Bitcoin bears who are trying to short Bitcoin.
It seems as if the doubters and haters in the Bitcoin world will be on the wrong side of history if the results of CBOE Bitcoin Futures Day One is any guide.
Shorting Bitcoin is a Bad Bet Because Bitcoin Is Going Nowhere But Up.
If you’re an investor wringing your hands in glee at the chance at shorting bitcoin to make money be prepared to pay up. Bitcoin is on the fast track in transforming world currency and investing markets. If ever there were a Bitcoin bubble that ship has sailed. When China put the screws to most Bitcoin activity on the mainland the price plummeted. Then came back up and hit brand new highs a few days later.
If you’re new to futures trading I strongly suggest you do your research. A lot of it. Shorting Bitcoin will have you reaching for your checkbook to pay the CME or CBOE when your contract comes up and the price puts you on the wrong side of the deal. How wrong? Upside down wrong. Underwater.
In other words you are very probably going to lose money.
Crypto Capers’ founder Howard Sherman covered Bitcoin futures but he only scratched the surface.
To understand why take this crash course on the futures markets and then we’ll continue.
Since Bitcoin pricing has steadily increased in value year over year from simply an investment standpoint coupled with the fact that more and more businesses are accepting bitcoin as a form of payment, we’re seeing mass-market adoption and validation of bitcoin as a viable currency in its own right. This is more-or-less what Bitcoin values have looked like over the years. As a result, your Bitcoin futures contract to short bitcoin is going to cost you money since you know you have to cover the difference at cash settlement of the price plus the margins. Business Insider broke down the risk of shorting bitcoin perfectly. The transaction fees alone should scare away most would-be bitcoin investors.
Shorting Bitcoin and going against the market is very likely going to be a money-losing proposition. If you want to make money on Bitcoin futures you should consider a futures contract where Bitcoin is at a higher place using history as your guide. Or just buy bitcoin outright. Do your research, do the math then make a well-informed decision based on conclusions.
Bitcoin Futures – What This Means For Your Future
Thanks to Bitcoin futures trading starting in just five days, a Bitcoin clampdown in the United States is now off the table. The SEC and FTC won’t fool around with Bitcoin now that the CME and CBOE are involved, bringing institutional order to Bitcoin chaos. With published guidelines already out there (such as a 20% price swing leading to a halt in trading) Bitcoin futures look very bright indeed.
Many were surprised by the sudden announcement made by the CBOE (Chicago Board Options Exchange) yesterday to start trading in Bitcoin futures on December 10th – eight days ahead of the previously announced Bitcoin futures trading options that will be offered by the CME (The Chicago Mercantile Exchange).
Bitcoin enthusiasts are hopeful that a bitcoin ETF (Exchange Traded Fund) might be coming. Indeed, the SEC denied an application filed by CBOE earlier this year on the grounds that the cryptocurrency was “unregulated,” but CBOE head Ed Tilly said he plans to reapply with the SEC for a Bitcoin ETF. This new application is widely favored to be approved now that Bitcoin futures – and related market-based rules – will be in effect.
The argument may be helped by two features that will be a part of trading Bitcoin futures: price limits and margin rates.
The CBOE and CME will have margin rates of 30 percent and 35 percent, respectively, where a lot of money will also be made.
Shark Tank’s Mister Wonderful was recently quoted as saying he tried to short Bitcoin but couldn’t. He should be happy to know that he will be able to short Bitcoin now. In addition to being able to short bitcoin, there’s considerable speculation about whether futures will lower or increase the volatility level of bitcoin. We predict that Bitcoin will continue its unstoppable course of ever-increasng value with lots of ups and downs as history as already shown.
The CME says it will be using price limits that kick in during gains or losses of 7 percent, 13 percent and 20 percent that would slow trading with a complete halt at a 20+/- swing based on the prior day’s closing price.
Upping the ante while heating up the Bitcoin futures war, the CBOE made a point to say trading would be free through December, with no published fee schedule for January as yet.
The CME says Bitcoin futures will be priced at a premium in line with the pricing conventions of other premium products. We see this putting upward pressure on Bitcoin pricing. With the recent price surges of Bitcoin tied to the news of futures trading I see Bitcoin as having a very bright future.