if the market believes a derivative is truly deliverable, it may draw trading volumes/liquidity and therefore affect price. whether all outstanding contracts are truly deliverable is another matter entirely, as we see with COMEX.
It is expectedly the same with any commodity market
hence:
i imagine it will work like the paper gold market.
As the "population" there consists mostly of speculators who are not in the least interested in buying any physical gold. That's why they are selling before expiry and rolling over.
BTC is a completely speculative market. why would it be any different? in fact, gold actually has industrial and commercial uses, unlike BTC. in both cases, the primary use case is "store of value".
Besides, these are by far the biggest markets out there, so where else should the price be discovered?
and that's how the tail wags the dog.........
And as I told in my previous post in this thread, Bitcoin is different from gold, crude oil, etc since you don't need storage tanks, vaults, etc for it, which is why physical delivery is virtually impossible for such traders in these commodities, but not Bitcoin. Additionally, if we are talking specifically about deliverable futures (say, crude oil), with actual delivery of the underlying instrument, it is not like there are only speculators filling the market. Oil producers (since we are speaking of oil now) are an important part of the market as they are interested in predictable prices for many months ahead. Gold is likely more speculative in this regard, that I agree with, but so far no major exchange has defaulted on their obligations. And yes, I've read all those horror stories about no gold in their vaults
The rumors have been circulating for years, if not decades, but so far no solid evidence has been presented
just compare outstanding COMEX claims on underlying gold vs. their registered vaults. what evidence do you want?
your logic makes no sense---it doesn't matter if shit hasn't hit the fan
yet. the point is that 1. not all COMEX gold futures are truly deliverable; it's physically impossible. and 2. the paper market affects spot prices. this means that unbacked contracts can be used to manipulate price. (we know they're unbacked because transparently, the vault can't cover outstanding claims)
do you not think it's a problem if COMEX is trading contracts for more than the entire bitcoin supply? because they can.