Quote from: shinzai on December 08, 2017, 12:02:00 AM

Quote from: cellard on December 07, 2017, 07:03:09 PM

In theory, futures should be backed by real bitcoin holdings which the issuers of the futures would hold, but im not sure... I think futures is just legal institutional gambling. Wall Street will try to control the price through futures. It depends on how stupid the market is to let themselves get manipulated by the price of something that is not even real Bitcoin. We are dealing with billionaire weasels now, it's a new different level never seen before in Bitcoin.

My recommendation: Ignore futures and it's price, and only trade real bitcoins directly, anything that isn't this is on the scammy side.

Hi & thanks for answering. Can you please explain the point of backing futures with a commodity if the contract is to be cash settled? Why would that be needed?

Quote from: aardvark15 on December 07, 2017, 10:11:22 PM

I have heard that they will be cash settled. I dont think you would buy actual Bitcoins (or short actual Bitcoins). I dont know how this will affect the price of actual Bitcoins but is seems that there could be potential for manipulation of the price by doing futures contracts.

This could be good or bad for Bitcoin. Its new territory for us so well find out the ramifications after the contracts are on the market.

Thx for contributing. Can you please explain how that manipulation would work if futures are settled in fiat? Do you refer to that bitcoin could be bought/sold on-chain in order to manipulate future positions? Becuase that's the only possibility I can see. I.e. not the other way around.

As far as I've come to understand, when the price moves too much in one direction then one side of the futures contract will gradually lose money on his account and eventually risk margin call. Then, if he doesnt deposit more money the exchange will forcefully liquidate his position by selling the future contract (if Long) to someone else. The losing speculator is left with nothing on his account. But he will never have to buy/sell actual bitcoins, right?

This is what Cboe says: XBT futures provides investors with the opportunity to buy, sell and trade bitcoin futures or implement your trading strategies without having to pay for the actual currency. The single price settlement process gives participants the option of using XBT futures to hedge their exposure in underlying bitcoin or gain exposure to traded bitcoin prices without holding bitcoin.

So no, you are never buying or selling, that's pretty much the point. This should push bitcoin price higher, if it's not already doing it but eventually it's going to be bad.