Bitcoin ETF?

long said:
I’m under the assumption that the ETF will be able go long or short at its discretion. Are you saying that BlackRocks ETF will be limited to the long side?
More...

no, it does not work like that unless they are active discretionarily managed ETFs. All of the ETFs that are awaiting approval only hold spot bitcoin long with no hedging or timing element at all.

Again, in the future, I expect there to be short only bitcoin ETF as well. But the ETFs, are not at the discretion of the manager, whether to be long or short, they are explicitly stated in they have to follow their stated prospectus.
 
I’m under the assumption that the ETF will be able go long or short at its discretion. Are you saying that BlackRocks ETF will be limited to the long side?
More...

If anyone wishes to go long Bitcoin/Ethereum ETFs now, you are welcome to purchase any of the dozens of SPOT crypto ETFs on the Toronto Stock Exchange. You are free to short Puts/Calls as well.

In fact, you can also short the ETFs directly. I've been loaning them out for years now under IBKR's Stock Yield Enhancement Program. The interest rates on these share-loans are amazing.
 
The_Krakenite said:
If anyone wishes to go long Bitcoin/Ethereum ETFs now, you are welcome to purchase any of the dozens of SPOT crypto ETFs on the Toronto Stock Exchange. You are free to short Puts/Calls as well.

In fact, you can also short the ETFs directly. I've been loaning them out for years now under IBKR's Stock Yield Enhancement Program. The interest rates on these share-loans are amazing.
More...
How amazing?
 
NoahA said:
I just watched a video with Willy Woo and he almost sounded bearish on BTC. His point was that futures were able to suppress price way too much, and that $12 billion for example was all that was needed in order to suppress $60 billion of spot buying simply because of the 5x leverage. He equated this to how the financial markets worked up till now, and especially I guess to how it works for gold and silver.

But I was quite disappointed with his viewpoint. I'm not 100% certain how CME determines the price of bitcoin, but I think it comes from several exchanges. But these exchanges also sell spot bitcoin. What happens when people want to buy bitcoin at the stated price, but there is no inventory? For gold its easy, the dealer just doesn't have any. But with bitcoin, if there is a quoted price, but the exchange won't let you withdraw, then I think the game will be up. This entire derivatives business can fall flat on its face if you ask me.

I would love to learn more about how these prices are set, but considering that each time I buy bitcoin I withdraw, someone is gonna be left holding the bag one day, and it won't be me! I will have the fucking bitcoin and the CME can go fuck themselves. I understand futures are cash settled, but how on earth are futures prices going to be able to control spot prices when there is no inventory for sale??? Spot prices should be setting the price, and if a major player wants to absorb organic bitcoin buying by trying to force the futures price down, if this in fact does drop the futures price, I just don't see how the spot price will be affected at all.
More...
The CME doesn’t determine a price, it just provides the platform to exchange contracts. Buyers and sellers make bids and offers. When a bid matches an offer a trade happens and that price is what is quoted by the CME as the “last price” until another trade happens. TLDR; the price is determined by buyers and sellers, not by the exchange. Prices from other exchanges aren’t considered, only actual trades on the CME platform.

The only price estimates that are made by the CME are for far out months with little to zero trading volume, it’s called a synthetic closing price. Let’s say that November BTC futures closed up $5000 yesterday while the February contract didn’t trade any contracts during the session. There will be a synthetic closing price that estimates what Feb might have closed at if it had traded, based on mathematical models. This synthetic close isn’t an offer or bid. To trade a feb at that price you would have to put your order in at that price and see if there are any takers.

Manipulation….
If someone was to try to push BTC futures down by using full leverage what do you think would happen? If futures drops to 20k while actual spot BTC stays steady at 35k or rises then trader’s would flock to buy the futures because it’s a bargain. And…they would be leveraged in the opposite direction. There are lots of famous stories about people who have tried to manipulate a market using futures and it never works out. Leverage is a double edged sword and markets are pretty efficient at keeping manipulation in check. If I see that futures are going down while cash sales aren’t I’ll be buying futures to take advantage of the temporary inefficiency and I’ll be completely confident in the trade.
 
Last edited:
long said:
There are lots of famous stories about people who have tried to manipulate a market using futures and it never works out.
More...

You may want to look up why there are no onion futures.

Also, the Hunt brothers would like to disagree.
 
Pekelo said:
You may want to look up why there are no onion futures.

Also, the Hunt brothers would like to disagree.
More...
I never even knew there were onion futures. Is there a story there?

As for the Hunt brothers, they were on the buy side trying to increase prices. I don't think it would have went as far if they were sellers instead.
"When the price of silver dropped below their minimum margin requirement, they were issued a margin call for $100 million. The Hunts were unable to meet the margin call, and, with the brothers facing a potential $1.7 billion loss, the ensuing panic was felt in the financial markets in general, as well as commodities and futures. Many government officials feared that if the Hunts were unable to meet their debts, some large Wall Street brokerage firms and banks might collapse.[5]

To save the situation, a consortium of US banks provided a $1.1 billion line of credit to the brothers which allowed them to pay Bache which, in turn, survived the ordeal. The U.S. Securities and Exchange Commission (SEC) later launched an investigation into the Hunt brothers, who had failed to disclose that they in fact held a 6.5% stake in Bache.[6]"

This wasn't a success for anyone.
 
long said:
1.I never even knew there were onion futures. Is there a story there?

2.As for the Hunt brothers,
More...

Since you don't like to google:

1. In 1955, two onion traders, Sam Siegel and Vincent Kosuga, cornered the onion futures market on the Chicago Mercantile Exchange. The resulting regulatory actions led to the passing of the act on August 28, 1958. As of July 2023, it remains in effect. >>>aka no onion futures anymore

(In the fall of 1955, Siegel and Kosuga bought so many onions and onion futures that they controlled 98% of the available onions in Chicago.)


2. The Hunt brother successfully cornered the silver market, price went from 11 to 50. The freaking US government had to step in and change the rules of the game and that is what screwed the Hunts over. But their original play was a great success.

So your assumption that a futures market can not be cornered is not based on history.
 
You must log in or register to reply here.
Back
Top