Topic: Everything you wanted to know about BTC futures but were afraid to ask! - page 5. (Read 3953 times)

Sorry but I disagree.
Those two topics are different.
This one is aimed at explaining and discussing bitcoin futures.
The other one is aimed at explaining bitcoin options.

Those two instruments are quite complicated financial derivative of bitcoin: future is a linear derivative, meaning its price change with a fixed ratio with the one of bitcoin, while options are non linear derivatives, meaning the price of the option changes in a non linear way with the price of bitcoin.

As this difference involve quite a different approach to pricing and use of those instrument, I decided to open two different thread.
Also this is meant to discuss specific option market taxonomy (volatility, smiles, Greeks) that are irrelevant for futures.

Last bit not least I think having two different thread allows more specific questions about the instrument asked from the forum. As always those threads are meant to learn something.

Hope this clarify and more precisely define my choices.

I did not realize that you had started two topics that seem to be the same topic, in the same section and in the same language.  Is there some kind of mistake?  Shouldn't one of the threads be locked...? ... sure there could be some kind of a reference in a continuing thread to a locked thread.  Is there a difference between the two threads or some kind of reason that two threads serves some meaningful purpose?

This post is the equivalent of this another one regarding options.

This post analyses how the derivatives market has been positioning itself before the halving. Future posts will monitor this positioning, its evolution, and the general market dynamics after the halving. I hope that we will learn something observing markets before and after this so important moment.

Bitcoin futures are traded in a variety of  flavours at different exchanges. The most liquid exchanges are definitely out of reach for the traditional investors, so l  the analysis will focus on the “traditional” regulated trading venues like CME and BAKKT, which are in the reach of the majority of the investment community, as those are the only venues able to handle their many regulatory and operational requirements.

Bitcoin trading volumes and derivatives open interest have been growing steadily in the last months. CME, and also Bakkt to a lesser degree, have been growing steadily, and their funds inflow was from “institutional investors”, not the whales and private investors trading with leveraged accounts on unregulated exchanges. Open interest is at historical high, after the collapse observed during the mid march market rout: investors reinstated the long positions they had before the crash, and that got liquidated by exchanges - this observation also clears the “derivatives market” as a potential source for bitcoin market crash in these weeks).





From the Commitment of Traders Reports at the CME we see that coming into halving the short leveraged accounts have closed their shorts, while the long have increased their positions.



Regarding the shape of the forward curve, we see that the contango still persists, even if the future curve is way flatter than before the market crash in march, then reducing the profitability of cash and carry trades.

As I said, in a future post I will continue this analysis to see how halving impacted option markets.

Anytime.

I was starting to wonder if I missed some easy or complex calculations. Thank you for updating it and thank you for writing it. Now I can go back to reading .

We are approaching the halving.

Volumes and Open interest at CME are on the rise.
They have completely recovered from the liquidation suffered at the march market crash and are now heading towards new highs.



Actually I expect this figure to decline at Close of business as the  current dump will of course mean long position liquidations.

From the CME COT, lower panel in the following graph, we can see the bulk of the long open interest is the retail investor, who got invested only recently.



I am expecting then this category will be the most hit from this last wave of liquidations.

Interesting times ahead!


EDIT:

Coindesk wrote an article on the same topic:

CME Says Volume Surge Shows Strong Institutional Interest Before Bitcoin Halving

Very well explained ☺️☺️☺️Thank you so much🥰it's mean every contract we earned $2.50? now I understand why I need more Bitcoin for my daughter's future ..

Very nice find.
It’s obviously a typo no one noticed until now. It might be originated from an earlier version of the article referring to different data and probably not correctly updated.
I corrected the text and now should be pretty clear.

Thank you for pointing out.

Can anyone please explain how we get these figures


from the displayed data?

Thank you

https://archive.is/EIAfy
always search on archive.is
with the ft and many others, you can archive it yourself if no one else has

Damn Paywall!

The famed Medallion fund of Renaissance technologies hedge fund is poised to enter trading in bitcoin futures.
Not sure if it is bullish or bearish.
https://www.ft.com/content/6ea8207b-b41a-43df-9737-ae481814a8d4

Unfortunately this continues to age well.

A few updates on the thread:

• Corrected a few minor typos
• Few minor edits
• Modified a factual error on Market Efficiency Hypothesis. Efficiency is "semi-strong" rather than "weak".

This post is eligible for my project:



If you think you can help here, just visit the thread!

Russian Translation by FontSeli: Bce, чтo вы xoтeли бы знaть o фьючepcax нa BTC

Nice Article today about the importance of Open Interest (despite the slightly click-baitish title):

This Bitcoin Metric Is Over 100% Higher in 2 Months, and It’s Critical for Bulls


This is especially true when relating to BAKKT open interest, that is, contrary to other exchanges' one, directly converted into physical bitcoin.

This morning I saw  tweet by PlanB



https://twitter.com/100trillionUSD/status/1225189897117618182?s=20

Well we saw in the OP how the future curve is shaped.
It has to do with carrying your position untily maturity.
There is no reason why future curve should bend upward after halving, as the spot price is the current best predictor (net of cost of carry) of future prices: if we are sure that the price will move at 100K right after the halving, there is no reason not to buy now.
So the spot price is alwys the best forecast of forward price.

You are correct, I cannot wish them away, all I can do is point out why We should not be helping them in any way shape or form and that includes accepting them as inevitable.

When it all boils down they have unlimited funds that are provided by the Fed and obfuscated into the system, the more tools they have to obfuscate those infused funds that dilute the underlying assets value (purchasing power) the easier it is for them to control and hide the process. Therefor by shining a light on their practices and not participating in their schemes is a tertiary act against their actions.

Thanks for this information OP, I  already gave you a merit, you certainly deserve it,  Bitcoin's community should read all of this thread especially the newbies or the beginners, it is really helpful to be honest. Hopefully Bitcoin will have a brilliant future.
Plus,  if you have a lack of knowledge in any domain then you will probably gain nothing, in my opinion, knowledge is the key of successful. Unfortunately, most of users think that Bitcoin's field or crypto is complicated and hard to learn, they always want earn money in an easy way without even a  hardwork, and that cannot happen for sure.

Very often, cryptocurrency users complain about Bitcoin futures, because, in their opinion, before the expiration of fixed-term contracts, the price of Bitcoin reacts to these circumstances and is actively declining.  I couldn’t find a balanced answer anywhere on this question, although it seems to me that trading in Bitcoin futures is much less than the volume of trading in the cryptocurrency market and therefore can not fully influence bitcoin pricing.

I guess "you" can decide not to take part on it but as long as there is a demand for it they will continue to exist. You can't just create some sort of strike of bitmex or whatever and suddenly try to get people to stop as well, if people are using it they will continue to use it.

All you can do is to hope people will find this as a hype and slowly start to use it less and less eventually leading to the demise of futures but looks like that is not going to happen anytime soon. I agree that futures are the bad part of current financial system and should have never been part of bitcoin itself but at the same time I have nothing I can do about it neither. Hopefully, overtime we will find a way to over-volume these futures and make them not so important in the current system.