At least someone tells the truth that nobody wants to hear!
When the bitcoin futures were launched, the prediction was bitcoin at 18.000 $ at january 18.
Actually, it was at 12.000 or something so.
Don't you think that someone had a BIG interest to provoke a fall?
Do you think that this unbelievable media campaign was a coincidence?
Topic: Bitcoin futures market manipulation - page 2. (Read 436 times)
This is a great explanation of how the mechanism of futures trading. But I think that you're oversimplifying the situation. The price at which people are signing the contract this is just the trend. What will happen if in this moment there will be some event which will have a significant impact on the price? For example will address the issue of scalability. The price increase will be impossible to stop any emissions of coins on the market. Therefore, everything in this world is relative.
I've been thinking about Bitcoin futures that had been added to a few regular exchanges in December, and it seems that I understand how Wall Street could manipulate the Bitcoin futures market as well as Bitcoin price itself. Many people think that these futures can affect Bitcoin prices and I agree with them to a degree, though for likely quite different reasons.
We all know that Bitcoin futures are cash settled. This basically means that when the contract expires a trader's account is simply debited or credited depending on the current Bitcoin price, and no delivery of real bitcoins takes place. When people buy contracts they expect prices to rise. Conversely, when they sell contracts, they expect prices to go down.
This opens wide the doors to market manipulation. The Bitcoin futures market makers can easily see how many contracts have been sold or bought at any given moment. When the number of bought contracts substantially exceeds sold contracts, market makers can sell real bitcoins at exchanges like Bitfinex, thus moving the price down and leaving traders with losses, and vice versa.
Such manipulation could make sense if there is enough volume in the Bitcoin futures market while the price can be easily moved in the required direction. This explains how Bitcoin futures can affect Bitcoin prices, though in a somewhat convoluted or even controversial way, while the number of open contracts can then be used as a contrary indicator of sorts.
What do you guys think of this scheme?
2 mod: if this topic belongs to Speculation, please move it there!
We all know that Bitcoin futures are cash settled. This basically means that when the contract expires a trader's account is simply debited or credited depending on the current Bitcoin price, and no delivery of real bitcoins takes place. When people buy contracts they expect prices to rise. Conversely, when they sell contracts, they expect prices to go down.
This opens wide the doors to market manipulation. The Bitcoin futures market makers can easily see how many contracts have been sold or bought at any given moment. When the number of bought contracts substantially exceeds sold contracts, market makers can sell real bitcoins at exchanges like Bitfinex, thus moving the price down and leaving traders with losses, and vice versa.
Such manipulation could make sense if there is enough volume in the Bitcoin futures market while the price can be easily moved in the required direction. This explains how Bitcoin futures can affect Bitcoin prices, though in a somewhat convoluted or even controversial way, while the number of open contracts can then be used as a contrary indicator of sorts.
What do you guys think of this scheme?
2 mod: if this topic belongs to Speculation, please move it there!
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