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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.

 

Bitcoin

Cryptocurrency Fraud is Evolving; Bitcoin ATMs Mitigate Risk 

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Cryptocurrency Fraud is Evolving
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In one of the more overlooked aspects of the crypto ecosystem, it appears that the bulk of illicit activities are shifting from hacks and thefts to cryptocurrency fraud and scams.

CipherTrace, the crypto-surveillance, and analysis firm released a report at the end of Q4 2019 that revealed hacks and thefts had decreased by 66 percent in 2019 while fraud and misappropriation of funds surged by 533 percent. And beneath the COVID-19 hysteria of 2020, hacks in the crypto sector have been eerily isolated. 

Outside of a few exploited flaws in P2P exchanges and DeFi flash loan vulnerabilities, the headline-grabbing hacks of exchanges for hundreds of millions of dollars have been absent so far this year. Is the industry due for another massive hack, or are stringent KYC/AML processes, regulatory crackdowns, better security practices, and blockchain surveillance working? 

KYC/AML Improvements Are Reducing the Appeal of Crypto Exchange Laundering 

2020 is far removed from the no-KYC wild west days of the early-mid 2010s where anonymous altcoin casinos preponderated and the Dark Underbelly of Cryptocurrency Markets thrived. 

Today, bitcoin and the crypto ecosystem is becoming institutionalized with a surfeit of derivatives (e.g., options, futures, perp swaps, etc.) available on…

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IE Option – 91% Profit on BTC Fluctuations in Every 60s

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On Thursday, Bitcoin price broke below $6,700 and hit the weekly low to $6,480. Then, it rebounded back above $7,000 again with an increasing rate of 5%. At press time, based on the incomplete statistics, more than $720 million worth cryptocurrency futures contracts have been liquidated in this week. During the strong market fluctuation, investors are learning a hard lesson about the downside of cryptocurrency futures trading with leverage. 

Since we know that we cannot make money by investing in BTC spot trade during the bear market, and we notice the high risks of liquidation by trading leveraged bitcoin futures contracts, how can we hedge the loss in spot trade and profit from the BTC market volatility? 

BTC Option is a profitable trading product that you can turn to!

What is Option?

Option is a type of crypto derivative contract which enables investors to make speculative bet on price rising and falling. Call option means that trader long BTC at a given strike price, while Put option allows trader to short BTC at a given strike price. 

For example, if you predict that BTC price may surge, you can buy a call option. Suppose that you buy a call option at $7,000. As long as price exceeds $7,000, you can make profit. 

IE Option – Get…

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4 things you should know about bitcoin casinos

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Bitcoin casinos
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Bitcoin Casinos are the ideas of innovation, firmly moving towards the goal of disrupting the whole Gambling Industry. Best Bitcoin Casinos are the true trailblazers of the new era of gambling. Their creators quickly recognized all the immense potential that blockchain and cryptocurrencies contained within themselves. Most of the top Crypto Casinos started operating in the first half of the past decade and are quickly moving towards being the dominant force, when it comes to online gambling. There are a couple of key characteristics and advantages that elevate BTC Casinos above the rest of the competition on the market.  

Trusted casinos have fast withdrawals

Only the Best Bitcoin Casinos offer players the benefits that come with using cryptocurrencies as the main source of finance. One of the biggest advantages that BTC Casinos have over the rest of the competition is speed. When using cryptocurrencies, players can deposit and most importantly withdraw their money with blistering speeds. Thanks to blockchain technology, all the financial transactions are completed within the minutes of request. Alternatively, standard online casinos operating under the guidance of classical banking intuitions, need several days to complete the same procedures.

In BTC Casinos anonymity matters 

Another amazing benefit of Bitcoin Casinos is the ability to stay completely anonymous during the transactions and gameplay. Thanks to the…

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