How Bitcoin Futures Will Affect Price



Bitcoin futures launch tomorrow (Dec. 10) on CBOE and on December 18th for CME Group. Many individuals speculate that the trigger for Bitcoin’s run-up lately is over anticipation for these Bitcoin futures. On this video, I focus on the potential impression of futures on Bitcoin’s value.

At first, I believe liquidity will likely be decrease than anticipated. The goal group for Bitcoin futures are institutional traders and rich people, each of which are usually extra cautious. Given the warnings from FIA, Interactive Brokers and lots of others, these bigger traders will doubtless be extra reserved till the primary expiration happens they usually have some expertise watching the volatility within the futures themselves.

I did a quick clarification of cash-settled futures within the video, however I might suggest you search different sources to flesh out your understanding additional. For instance, I by chance implied that the preliminary margin & mark-to-market course of is completed primarily based off the spot value reasonably than the settlement value. The reason I gave within the video is sweet sufficient for laymen, however if you wish to commerce these, then you definately’ll need to do some critical studying. I would do a video exhibiting the right way to truly commerce them sooner or later and get extra technical.

The preliminary margin necessities are already excessive for Bitcoin and would possibly improve relying on volatility. Sure brokers are already implementing increased than required preliminary margin necessities and are forbidding their purchasers from going quick. Upkeep margin necessities will doubtless be in flux as effectively. Price limits may be examined extra often than anticipated, resulting in a uneven futures market which then screws with the underlying spot market. All of that is to say that many traders will wait earlier than pumping important quantities of capital into this nascent asset class.

Given this, I believe this may be a “sell-the-news” kind occasion and we would expertise a correction following the CME Group futures launching if there are difficulties related to their clearing. Be aware that CME Group has a lot increased contract quantity than CBOE, so the CBOE futures launch will doubtless be extra helpful as an indicator of what to anticipate when CME launches.

I additionally forgot to notice within the video that CME Group contracts are for five Bitcoin, which can have confused a few of you once I stated the preliminary margin necessities can be exceptionally excessive for CME Group choices regardless of the very fact they’re going with decrease preliminary margin necessities (35% vs. 44%) as a share of the contract worth.

Within the long-term, futures are good news for Bitcoin. They improve liquidity in a considerably illiquid market, will lower pricing inconsistencies (arbitrage), enhance value discovery, and scale back volatility. The short-term will see volatility rise (doubtless) on account of leverage, however this impact ought to scale back over the next months. Ideally, this opens the door for a Bitcoin ETF down the street as effectively. Ultimately, extra institutional traders will leap in as danger declines – however this will likely be a delayed impact (for my part) reasonably than a direct one.

I might love to listen to your ideas. Let me know within the feedback beneath and thanks for watching!

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22 comments

  1. Please make sure you read the description – it is succinct and includes details I left out and some corrections. I'd love to hear your thoughts as always. As usual, make sure you check out and follow my Twitter as well: https://twitter.com/Truth_Investor

  2. I've been in # Bitcoin for a while and can not tell who's right & who's wrong anymore. I suppose we're all wrong, as opposed to uniting together. Just worrying about missing out on a bitcoin you can actually trade BTC against the USD, I do that and I'm about $ 7200 every week with Rob Beyer strategy. He's advice and predictions to me was perfect. now i understand and see how it works with the help of Rob Beyer.

  3. Streamr datacoin is the next big coin!

  4. I guess I don't see the point of buying a future, at least if you want to go long. If you think bitcoin will go up then buy a bitcoin why buy a future? I guess this gives you the option to essentially short a bitcoin but that's about it.

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  7. Thank you for your professional knowledge and personal transparency.

  8. One more problem is that Bcash is centralized. It was created and marketed by Roger Ver, the truth is that if Roger Ver dies, Bcash will go to nearly zero.

    If Vitalik dies, Ethereum will tank as well. Same for a lot of these teams. On the other hand, if a BITCOIN developer dies, BITCOIN continues all the same unscathed.

    BITCOIN is the most decentralized coin in that sense. And so I say GO….BITCOIN….GO . The KING of cryptocurrency.

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  10. with today crashs your video makes more sense to me

  11. bitcoin future is not give positive impact to digital money market capital grow independantly.

    lean from gold rate history after inter the future market.

    Nasdaq market starting crash ??

    then digital money market crash too???

    get ready…

  12. They obviously sold down bitcoin so they could cash in on 44% profit here buy shorting it just at the right timing! https://www.cryptoninjas.net/2018/01/17/gemini-settles-cboes-first-bitcoin-futures-successfully/

  13. an example of a futures position is..

    Sell Short 5 January Bitcoin Futures "equivalent 25 bitcoin" (BTCF18) at 16.000 " CME Bitcoin futures track the CME CF Bitcoin reference rate"

    At 16000 $, each Bitcoin has a notional value of 80.000 $ ..The performance bond margin which is subject to change, will be approximately 47% of the notional value = 37.000$

  14. It’s just a way to manipulate prices similar to the gold market. Futures traders will buy up Bitcoin prior to taking a short futures position and then dump it on the market prior to expiration. RIP Bitcoin. Once they do the same neutering job on Ethereum, then it will be RIP Ethereum. Time to move to Litecoin.

  15. First i'm Jerry Mikel , I had like to say that anyone can have these kind of gains in Crypto Market. And no, i didn't mind any coins, and no, i wasn't an early adopter of bitcoin buying up coins when the price was under a dollar. I'm just a trader, who fairly opened up a few accounts and transferred $2000 into bitcoin then traded it up to over $50,000 a year back and i'm earning more profit compare to my past trade. There are so many great opportunities for anyone willing to pay attention to coin strategies, new coins, charts, and price action. You can find out what's the hottest new Coin and jump in early. Have you ever heard anyone say that trading is risky but profitable or might be dangerous,  But I have been trading cryptos stocks successfully for over five years, and I actually love trading them. I look forward to hitting the markets every day. its really not that difficult, You have to learn to read charts the way I do… I have taught quite a few friends to trade over the years. They often will sit in my office with me during the day and watch me trade, asking questions and learning from real live minute to minute executions. However, i feel good helping people to trade and manage their account because i think by doing this I'm gaining and impacting knowledge and maybe i will be entitle with a token percent for appreciation. I am a real full time trader because I love making my money from the markets, Lol. Feel free to reach me on jerrymikel555@gmail.com for trade and advice, Good luck.

  16. just ingone what the rate predict at their bet at bitcoin future contract.

    bitcoin future trading is not same consep witch crypto trading today.

    TradeStation Vs individu trader

    1. dont panic
    2, dont sell stay hold
    3 buy more

    only this way we all around the world will be WIN ( profit)

    if we all panic

    we a lose

  17. the effect of bitcoin rate end 2018 2019

    study what happend to gold
    after list at future trading.

    stay hold
    buy more

  18. if we want to win ( profit)

    dont follow the rate manupulite by bitcoin future

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  22. How do futures contracts affect exchange rates?