Noob here with a burning question:
Back when Bitcoin Futures were announced, everyone anticipated them being paid out in Bitcoin, and that the prices for bitcoin would skyrocket as a result. We eventually learned that the futures contracts are all cash settled, and seem to have had little effect on the price of bitcoin (if anything, its been a big steady decline since the contracts were released).
Thanks for the help!
Did people really assume that bitcoin futures contracts would be settled in bitcoin and not cash? Futures contracts are rarely, if ever, exercised by a buyer. You get a ton of leverage with futures and no one wants to actually take on that amount of risk on the contract expiration date. Pretty much all futures contracts become cash settled across the futures market.