RT @WhalePanda: Dear @Bakkt social media manager:
"Bakkt Bitcoin Cash Settled Futures" is going to get confusing for some...
OTOH I can't wait for Roger to tweet about this though.
The replies on this post lololol
Twitter eggs complaining about Bakkt products when they will never, in a bajillion years, actually use Bakkt products, let alone comprehend them. https://t.co/NPjh67aFfX
RT @WhiteAdamL: We're live with two new #bitcoin contracts - a cash settled future and options on futures - both fully regulated and leveraging our benchmark @Bakkt Bakkt Bitcoin (USD) Monthly Futures. More here:
My guess is that they're going to try and suppress the price during the next halving. Hurt the miners when the reward drops, spook the market into thinking history isn't going to repeat. Pile on a bunch of bad news stories and buy up coins at a discount
I emailed Bakkt about how to go through the process of settling in Bitcoin. They never got back to me. They don’t give a shit because either they assume I’m too small a fish (there’s no way they can know that), or they don’t want to encourage taking delivery.
They have no other way of contacting them. They strike me as shady. Not because they are some two bit scammers. I know they are legit. But the type of legit that is insidious.
Just because you don’t understand HOW something works doesn’t make it insidious.
You don’t know the exact details of how commodities in general are settled until near the end of expiry. Only after the date of transfer are you then responsible for it and the details made clear. For example... if you bought wheat futures, they don’t tell you where the wheat will be until after it expires and it passes to you. You then negotiate how you want to do it.
Don’t be so dramatic
This contract leverages the settlement price of the benchmark Bakkt Bitcoin (USD) Monthly Futures and provides an alternative for participants who are unable to trade our physically delivered contract.
A transparent lie; they can "physically deliver" to the custodial account of anyone who can participate in options purchases.
If an options gambler does not want to take physical delivery of bitcoin, or wants to withdraw dirty fiat, they can easily sell any delivered BTC.
I suspect the real reason here is to allow shorters to short BTC without the lender ever having had to buy in or hold any.
WHile this may be good for bakkt, as it allows them to charge more fees, and margin call their customers more freely, its bad for the market as a whole if people participate in such shady regulated exchanges.
BItcoin would be far better off if everyone avoided regulated exchanges.
Because if you hammer the price down in cash settled markets it doesn't put any upward pressure on the price of Bitcoin.
The price difference in the markets creates an arbitrage opportunity and bots will hammer both sides until the markets meet in the middle and their is no arbitrage opportunity remaining.
cash settled futures do not manipulate the market but they can make market manipulation very profitable. if you hold a huge amount of BTC you can dump it on the spot market and short BTC at the same time with Futures.
Not really. If you go short in the future market and have enough BTC to dump the market you're guaranteed to win one of your bets and worst case scenario break even. After settlement you can go short again......buy back your BTC.......pump the price again.......and then dump again 30 days later.
This has been going on with CME ever since it was introduced and the pump before that was the big boys loading up in anticipation of this.
But with the opportunity to hit the big 'middle' where both bets win. It all would come down to the probability of successfully winning non both.
If you buy at an average of $9k and pump the market to $10k....you could have been short at $8k.......dump at $10k and generate enough steam from others selling off of your dump to win both bets.
Your intuitions are correct. There is a huge amount of FUD going around in here, but the reality is that cash-settled derivatives are just a casino and have no bearing on the markets for the underlying commodity.
I think a lot of this FUD comes from the near perfect correlation between the 2017 BTC bubble popping and the release of CME's futures. I can't speak to the degree to which one actually affected the other, but it's pretty clear that the 2017 parabolic runup was going to cool off (in a panic) regardless of what happened in the world of fiat.
Since naked short selling already exists via places like CME should we anticipate any major price action once BAKKT's cash-settled futures are released?
Also, how smart is it to short sell BTC during a halvening? Isn't that just asking for a squeeze?
If institutions loan more money into existence to buy BTC, USD inflates and value proposition of BTC increase.
If institutions loan more money into existence to short BTC, USD inflates and value proposition of BTC increases.
There is nothing to gain but a delay/deterrence of the inevitable.
I never short sell anything.
Does the CME settle in USD or BTC? I don't know.
People tried to squeeze JP Morgan (silver) in 2010.
They kind of won, but JP Morgan still exists.