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Bitcoin Futures Good Or Bad: A Definitive Guide

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We are just a matter of days away from bitcoin futures being made available as tradable assets by CME and CBOE, which are launching their markets on Dec. 10 and Dec. 18. respectively.

Take a look through some of the crypto specific discussion sites and read some of the more popular news outlets in the sector and you will see an overwhelmingly positive response to these above-mentioned launches. That bitcoin futures will be available to trade must surely be a good thing from a long-term adoption perspective, right?

Well, yes and no.

There is a downside to the situation that many of the optimists seem to be ignoring and it’s one that might temper a bullish attitude somewhat at initial presentation. As we will get to shortly, however, even this might not be enough to stop the launch of bitcoin futures propelling price higher longer term.

In order to explain what we are talking about, it’s first important to talk a little bit about what futures are and, specifically, their implementation in this space.

A futures contract is a contract that stipulates that an individual will buy or sell a particular asset for a set price on a specific date in the future. In the commodities markets, farmers deal in futures as a hedge against the risk of falling prices in the commodity they produce (say, corn) while, on the other side of the equation, companies like airline operators deal in futures to hedge against the risk of an increase in the price of fuel for their aircraft.

These are just two examples, of course, but what’s important to realize is that the ability to buy and sell futures contracts means that money can be made on both sides of the market. Right now, it’s pretty difficult to short sell bitcoin and there’s basically no market for it on the bitcoin cash market. This means that the vast majority of positions are incentivized to push the market price of bitcoin upwards.

Once there is an active futures market for bitcoin, however, there is an incentive on the short side of the equation as well as on the long side. This means that there is potential for large gains to be made as price falls and, in turn, opens up bitcoin to potential manipulation on the short side, as we see in many of today’s more traditional financial asset markets.

The fact that it will soon be far easier to short bitcoin, therefore, is a major concern and one that many aren’t really considering right now.

With that said, however, an active futures market also makes it easier to go long bitcoin than is the case currently, and this is where the bullish counter argument comes in.

A large number of people want to gain exposure to the price rise we have seen in bitcoin over the last 12 months but have been unable to do so because buying and storing bitcoin is pretty inconvenient. Outside of these individuals, there are also large numbers of financial institutions that would likely love to pick up a position but that don’t want to have to go through the process of holding it in cold storage (and are, as a result, put off by the limited security offered by online wallets).

With the advent of bitcoin futures, these parties are able to take long positions (i.e. take positions in the expectation that price will rise going forward) without having to tackle any of these above-mentioned barriers.

As such, there is a strong chance that the inflow of speculative buy activity that comes about as a result of barriers to entry into the market being removed will outweigh the impact of bitcoin futures allowing certain parties to take up short side positions on the asset’s future.

To put this another way, it’s about to become a lot easier to go short bitcoin but it’s also about to become a bit easier to go long bitcoin.

We’re willing to bet that the number of participants that will enter based on the former altered situation is far smaller than the number that will enter based on the latter (i.e., the number of longs is going to dramatically outweigh the number of shorts) and, in turn, the net impact of a bitcoin futures market on the price of the underlying asset will be very much bullish.

We will be updating our subscribers as soon as we know more. For the latest on bitcoin, sign up below!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

 

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CoinFlip Scores Big with BRD Wallet Partnership

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As the crypto markets move closer to mass adoption, one of the keys for future success will revolve around attracting as many market participants as possible.  While many crypto users are extremely tech oriented, a lot of those on the sidelines are not.  The cause of waiting on the sidelines could be due to a variety of reasons such as fear of the unknown, lack of knowledge, age, or a combination of all of the above.  In order to entice new users to join the crypto revolution, crypto ATMs are rising up across the country.  Of those, the largest and most influential crypto ATM company by a significant margin is CoinFlip.

In early October, CoinFlip announced on its Twitter that it had officially partnered with BRD Wallet to re-introduce their crypto ATM map.  Now, BRD wallet users will be able to locate their nearest CoinFlip ATM and receive a 10% discount for both buys and sells.  BRD brand awareness is growing quickly within the crypto community thanks to its innovative and entrepreneurial spirit.  The team strongly believes in the value of financial freedom and independence, and want to empower people across the world by leveraging the possibilities that Bitcoin and other cryptocurrencies provide.

Cryptocurrencies are already making a huge difference around the world.  Citizens of Venezuela, a country devastated by rampant inflation, have been using several cryptocurrencies…

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Bitcoin

New Tendencies of Bitcoin Gambling

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Gambling has always been an integral part of human nature. Nothing is sweeter than the money you win, and that’s why wagering games have always captivated people throughout history. Last couple of decades saw the gamblers switch increasingly towards virtual gaming, instead of physically being inside a casino. The popularization of online casinos led to the integration of Bitcoin Gambling into the systems and today a very large share of the casino industry is based on the virtual currency.

Reasons behind the transition

The tendency to switch from classic casino environment was dictated by the fact of mobility and accessibility. But the new age has brought us cryptocurrencies like Bitcoin that revolutionized the gambling business. From now on, the gamblers of the world don’t have to rely on traditional banking transactions to be able to enjoy themselves online. A simple crypto-wallet and ownership of virtual currency is enough to engage in Bitcoin Gambling.

Bitcoin Gambling and Blockchain Technology

The big reason for the heavy shift towards Bitcoin Gambling is the fact that Bitcoin and other cryptocurrencies are based on the blockchain technology. This means that the process is decentralized, resulting in a much faster speed of transactions, when it comes to depositing or withdrawal of funds in or from the casino accounts. It also makes gambling incredibly secure,…

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Bitcoin

Bitcoin will return to the bear market? Bex500 senior investor teaches you how to get profit in the Bear market

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—— Don’t forget to join Bex500 bonus program at the bottom of the article.

Since September, the Bitcoin price has been decline from beyond $10000 to below the $8000, which 20% of the bitcoin value has been removed. The collapse of bitcoin price brings about the new panic in the bitcoin trading market. Many bitcoin investors are scared of the returning bear market as the early of this year. On the contrary, some of the bitcoin-believer, especially the investor who brought Bitcoin in the height of the price still thought that the bitcoin price will rebound very soon. However, it is no doubt that the early stage of the bear market has been shown up in the past month. Many crypto analysts start to predict the bottom price of this market movement.

However, as the market developed, crypto traders have detected more tools to safely pass through the bear market. They realized more ways to avoid the loss of the price decline; moreover, they began to earn profit from the bear market. The key to the tools is the bitcoin futures contracts. We are honored to make an interview with Bex500 senior investor Tom Beck and he introduces the details about bitcoin futures contracts. (Reporter=R, Tom Beck=T)

R: Hi, Tom, Thank you for accepting our interview, Could you introduce yourself?

T: Sure, My name is Tom, I have over…

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