Topic: Winklevoss Bitcoin ETF effect in price - page 2. (Read 7072 times)

If $1 billion came in the first 3 days of the COIN, how many bitcoins would have to be purchased on the market?

I don't know jack about traditional Wall Street mumbo jumbo, but I read today that the Winky ETF is modeled after the GLD fund – which set records by attracting over a $billion in new investment in just 3 days. Obviously that's a pretty lazy comparison, but consider this: Bitcoin represents an entirely new asset class. Lots of institutions and investors will want to get in on this on the ground floor, whether they support or even understand virtual currencies at all. Once the general public sees how much easy money can be made, money will start pouring in. IMO the ETF is the next big step for bitcoin and it will likely be the spark for the next bubble...

And when we are at 4-5k, the ETF in action, we can not say if there is causation.

Every post like that means it is more likely!

There is no chance that one ETF is going to push the price to 4-5k...

Once the fund is registered, and the price will start functioning. Reasons - the arrival of large investors WallStreet

NLFX got dumped after that GS upgrade.  Its dropping now

Good luck with that. Let me remind you of NFLX lately, which has been a major headache for some shorters. Don't think you know something..

Yup thats true.  I think what will happen is that it'll get pumped for 1-3 months while hedge funds build their short positions.  Then they use media to scare off retail and dump the price causing a crash.  It happens all time when there is a cult stock w irrational exuberance

There's always somebody on the other side of your trade

I think an ETF is going to have a short term bump, but then stabilize the btc price long term. Maybe a quick double the few months after it's released then stagnant for a year.

LOL.  And the only hard part about winning the lottery is picking the right numbers!

You can sell calls when IV is high.     Or buy put verticals.   Or sell call verticals.

Its only foolish if you don't know how to do it.   I take bearish positions all the time.   The only hard part is the timing.   But usually price crash harder than it goes up.   Escalator up elevator down type thing

There are some traders who mostly short or take bearish positions.   I think they're licking their chops to short bitcoin.  Its got all the ingredients

You cannot short what you cannot borrow.

What would you charge to loan out your bitcoin, in USD terms?  I would very much worry about getting it all back.

There is a hefty premium to pay for the right to get stuck short in a squeeze.

I've heard of the greater fool theory, but this would require the mother of all fools.  MoAF.


Premium is going to be a bitch.

I would love to short bitcoin on a legit exchange through a legit broker.  I can do it w options with defined risk.   Don't need to borrow

If some famous short hedge fund guy like Einhorn get shorting bitcoin the price will  crash til another famous hedge fund guy buys the bottom.

So far few big investment banks are pro bitcoin so I don't see any big funds getting into it.  It be smaller hedge funds.   Which would do their typical pump and pump

True, the Scottish period of free banking demonstrated that. Although how deflationary was gold during that period? I would think of it like this: if the purchasing power of the currency is expected by all parties to rise by X% per year, then the interest rate in *real* terms has a floor of X%. So higher X would result in less demand for lending in that currency, although it would not eliminate it completely. (And of course it's complicated by the fact that different people will have different estimations for X.)

I agree. A fiat currency would have to collapse first (and not because of bitcoin) for bitcoin to replace it. It will be very interesting to see if that happens in various troubled countries around the world.

The thing about the ETF is that it gets more volume, both long and short. And the thing about Bitcoin is that volume = good in the long term, either direction. Also, its a lot of publicity. There will surely be a lot of volume that comes the moment it drops on the market. Basically whats going to happen is:

1) A whole bunch of traders who didn't trade on bitfinex/bitstamp etc... "trust" the etf more, so they trade that instead.
2) A whole bunch of BTC-likers will buy the BTC in their IRAs, etc...
3) A whole bunch of BTC-haters will short the BTC.

Probably, the amount of money longing from (2) is going to be greater than the amount of money shorting from (3) because the people in (2) tend to be more risk-on than those in (3) so they will put more money on it.

But its also true that some traders, the most risk-on group of all, might decide to short. Also, its also true that group (2) has had places like bitfinex & bitstamp the whole time, while group (3) was very unlikely to use these services. So the amount of shorts might actually become pretty large.

Either way, it doesn't really matter. No matter, the volume is going to be really high, and that's the main bullish indicator in the long term. If its short interest causing it, then the price will crash for 2 years, while BTC-likers accumulate and shorters pay interest, eventually causing price increase.

If its longs causing it, then the price will bubble immediately, just causing a repeat of 2013 all over again. Bubble-burst bubble-burst each bubble being higher.

The bad situation would be if the ETF was canceled or if it needed to be pulled due to some kind of scandal or concerns over what someone somewhere can label "insider trading."

The less bad situation would be if the ETF didn't take off in popularity/volume, kind of flopped, but continues trading nonetheless.

I suspect the fractional reserve banking will not work very well with bitcoin. This is not because bitcoin is deflationary since fractional reserve banking worked well with gold, but rather because it is extremely easy and cheap to take delivery of bitcoin, when compared to gold and even fiat currencies. Fractional reserve banking ultimately involves short selling and there in no more effective way to push a short to the wall than to take delivery.

By the way fractional reserve banking has been tried with bitcoin. Pirateat40 was the first significant case and he managed to suppress the price of bitcoin in 2012 before he came to grief. There is also a very good case the MTGox was running a bitcoin fractional reserve before it also came to grief. My take is that Bitcoin will end up complementing rather than replacing fiat currencies for this reason, with bitcoin being an equity based currency complementing the debt based fiat.

You're referring I think to a fractional reserve banking system, where the bank's holdings equal only 1% (assuming a leverage of 100) of what is lent out. I think that a deflationary currency like bitcoin would be less likely than an inflationary currency like the USD to support fractional reserve lending. My rationale is that people will be less willing to borrow (with interest) a deflationary currency than an inflationary one. Just think about it from the borrower perspective.

I could be wrong -- I've never actually pondered this issue in depth before. People will always need to borrow money in one form or another. So in a bitcoin world, how would that work? Would a loan be denominated in something other than bitcoin, something that loses value over time? What would that be? Hmmm.
 

Amazing to think about, yes.