#Bitcoin Futures
Futures Market
I wanted to share this Blog with you, not with the intention to alarm anyone, but merely with the intention to help those that may not be familiar with the Futures Market.
In simple terms, the Futures Market allows two parties to agree a Contract that sets the price of an Asset in the future.
These Contracts are commonly known as Financial Derivatives.
Financial Derivatives
Financial Derivative are an: Arrangement, Contract, Instrument or Product whose value derives from and is dependent on the value of an underlying Asset.
These Assets could be: Commodities, Currencies, Securities, or in this case #Bitcoin.
They are used to "lock-in" and hedge any future fluctuations in price both up and down.
These Contracts are the backbone to the Global Financial and Banking System.
Meaningless of #Bitcoin Futures
Regular readers of my Blog will know that for the past +24 months, I have talked openly about the meaningless of #Bitcoin Futures and how in reality they are totally worthless.
This is one of many videos I have shared with you talking about #Bitcoin Futures and #Bitcoin ETFs.
#BITCOIN: S.E.C decision to reject the Bitcoin ETF proposal is great news for #Bitcoin.
NO #Bitcoin actually changes hands
With any Futures Contract, settlement of the Contract is normally made in Fiat, with the underlying Asset on which the Derivative is taken out, not actually coming into the equation.
In the case of #Bitcoin Futures, the agreement, maintenance and settlement of the Contract will see NO #Bitcoin change hands.
On other words, two parties, should they wish, could move the price of #Bitcoin in any direction they decide.
UP or DOWN.!!
With enough Fiat, you could in essence nail #Bitcoin to the floor with a #Bitcoin Futures Price of <$1.00..!!
Smart Money vs. Dumb Money
Could we see #Bitcoin nailed to the floor?
Well yes, because simply it will be the Smart Money robbing the Dumb Money of their investment.
#Bitcoin Bananas
As I have said repeatedly in the past, #Bitcoin Futures may well be called #Bitcoin Bananas if the settlement of the Futures Contracts are settled in Fiat..!!
They are meaningless and totally worthless in terms of price discovery of #Bitcoin.
#Bitcoin Futures vs. true #Bitcoin Price
Should #Bitcoin Futures attempt to play a role in the the price discovery of #Bitcoin in the future, then I strongly believe that there will be TWO prices for #Bitcoin.
A #Bitcoin Futures Price and a True #Bitcoin Price.!!
Thanks again for reading.
Stephen
They are meaningless and totally worthless in terms of price discovery of #Bitcoin.
Always buy the actual physical asset, gold,silver and BitCoin to have in your possession.
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You got a 2.56% upvote from @minnowvotes courtesy of @agrostis!
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They supposedly could nail the price of bitcoin to the floor.
But it gets exponentially harder to keep a ball underwater the further down it goes.
And what will the market do when it sees bitcoin spike?
you got your 10¢ contract... and now should be paid $1000.
People on the other end cannot pay that.
Not without having the FED be directly connected.
So, a lot of it is going to go unpaid, rather quickly.
And then the price of bitcoin goes nuts.
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Thanks for the comment.
I wanted to put this Blog out, not to alarm people, but to make people aware of what impact Bitcoin Futures could have.
Currently, Bitcoin has a Market Valuation of approx $150billion.
With Bitcoin Futures, Bitcoin Derivative Contracts and Bitcoin ETFs we could easily see a leveraged "Shadowed Market" for Bitcoin in excess of $15 trillion without breaking out in a sweat with the price going in whatever direction the one with the biggest "Fiat Printing Press" to hand..!!
Stephen
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So well said!
Financial prices going in whatever direction by the ones with the biggest "Fiat Printing Press" to hand..!!
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You got a 2.20% upvote from @minnowvotes courtesy of @agrostis!
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Thanks for this
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Twitter Poll
https://twitter.com/StephenPKendal/status/1177515996728315907
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