The effect of short CME Futures contracts on the price of bitcoin.

[MrMuppet]

I don't know much about futures but wonder if this article has any legs? It read somewhat reasonable. I'm not saying this is the cause, just wonder if the argument is sound.

http://genesisblocknews.com/the-bit...finitely-the-reason-for-bitcoins-price-crash/

Well you can verify that for yourself pretty easily. CME and Comex together are doing about 1% - 2% of the entire BTC volume. As a comparison, it would be like saying the purchase of 15.000 AAPL puts caused the stock to crash from 230 to 170$.

Does that sound reasonable for you? If so, perhaps the article can be reasonable for you as well.

The fundamentals drive the futures. That is, the FUNDAMENTAL OUTLOOK for the coin is what drives the future price. It is not the other way around, in any market. If Bitcoin had any legs and the coin had value and base bitcoin traders saw that value and kept buying the coin, the futures would be going up as well.

When the base holders of the underlying start showing weakness in their belief of the thing to keep gaining value, the futures respond by shorting the future. If the basic fundamental holders suddenly start buying because they now believe in it, the futures will respond accordingly.

I feel the addition of a future on the coin has zero effect on the price of the coin. In my mind, the reason for the bitcoin crash is because bitcoin has only the value assigned to it, which is based on nothingness. That is not a good baseline to start from.

I don't know about you, but I've never seen a market driven by fundamentals. When I trade I see buying and selling, that's what drives markets. If news are horrible and somebody is willing to buy, the market is not going to fall.

The reason why beginners don't understand the CME top is because they don't understand the role of the short seller in a crashing market.
Who else do you think is buying in a crash, when everything goes down the drain? A courageous investor willing to stop the avalanche by catching a falling knife?

Before CME there was the CBOE disaster: Nobody was able to quote a market on CBOE because nobody could really trade and clear a cash and carry trade CBOE vs Gemini (the exchange by the Wrinklehoe Bros that provided the index the CBOE futures were priced off of).

So everyone was waiting for the CME futures to take of. "The institutional buyers are coming"
"When CME opens the gates, the whales will drive it to the moon" that was the tenor on reddit, bitcoin.org, twitter and the Bitmex trollbox.
And everybody bought in anticipation of that event....just to realize, that nobody wanted to trade CME futures either and there was no institutional investors waiting in line to buy.

So everybody had already bought and what did they do after they've seen that CME was also a squib load? Right...they put a lot of selling orders in, and since there was no buyer anymore, the entire market crashed.

The End

 

[d08]

I'm about to launch my own Crypto. It will be called Noodle, and they are colored purple.

Each Noodle is worth $1.

I'm distributing 500million Noodles soon, in exchange for $500,000,000.

1 Noodle is expected to be worth $4,000 in 6 months.

Does anyone want to buy a Noodle from me?

(there is a place for Crypto's....but largely a complete scam)




.

We're gonna be so rich bud. All those suckers holding dollars, bhahaha. They'll wish they had the foresight to get in on the noodles. The noodles are the future! -- (every Bitcoin genius a year ago).

 

[Pekelo]

I feel the addition of a future on the coin has zero effect on the price of the coin.

Well, if arb exists there shouldn't be a huge difference between them. So if a HF decides to short the shit out of the futures, BTC should go down.

 

[LanceJ]

which retailers accept Noodles?