Fascinating to see the desire to have regulated markets for bitcoin... The reason bitcoin was started by Satoshi was to create a p2p digital currency that is not controlled by a centralized authority (i.e. Central Banks, Governments, etc.) that can manipulate the supply (i.e. print/inflate in order to bailout the "too big to fail"). Bitcoin supply cannot be manipulated so with all the traders and institutional funds coming in, I think this has the potential to create short squeezes and margin calls the likes we've never seen before. Just my biased opinion.
That is because people want to use bitcoin as an investment vehicle and not as intended, a currency. And nobody wants their broker to go down or disappear with the funds.
I would definitely prefer it since then I don't own any bitcoin outright and thus my bitcoins cannot be hacked/stolen if I am just trading futures. How many people have lost their bitcoins by accident or have been hacked? You don't have to worry about that stuff if you are trading a derivative. You still have to worry about the bitcoin price falling in response to a major hack, but you would be taking that risk if you held bitcoins anyway.
Is it OK to promote cryptos in this forum now? The change in sentiment should be very amusing. "We currently support bitcoin futures via our trading platform and the advantage over trading the underlying is blablablablabla."
People who would "never" trade bitcoin (or cryptos) are now awaiting to trade financial instruments tied to them. Institutional investors that could not participate because of bylaws and other restrictions will be able to. Wall Street is coming for the crypto market and all that billion$ coming in legitimizes bitcoin even more and forces the hand of the regulators (i.e. SEC) to approve certain applications they have rejected in the past. I think it decreases the chance the US Government will put out a bill that will ban bitcoin outright (same as what they did to online poker/gambling). As a holder of bitcoin and other cryptos, I think it's great. Let's do this!
This is not true. Supply can absolutely be manipulated. There is nothing stopping one person from buying up large quantities of bitcoins and hoarding supply. And you know who that someone might be? Your friendly local central banker. They can print the money to buy the coins. There is NO mechanism to stop that. NONE.
I would love for them or anyone to do this. They hoard those coins, there will be even less and will drive the price of bitcoin up. In traditional stocks, most (over 90%?) of the owners keep them on exchanges and they can be lent to shorters who drive the price down. Bitcoin owners (majority) don't keep them in exchanges, but in their own wallets (i.e. electrum, tezos, etc.). Let's say there are 10 exchanges and they each have 1M bitcoin each (which is highly unlikely). Each exchange supply of bitcoin is different and cannot be commingled (due to the private keys) which is why there's always price differences between exchanges. There are 16M bitcoins in circulation but the estimate is 20-30 percent are lost forever due to the private keys being "gone" (i.e. lost hard drives, dead owners who didn't get to pass the keys, Satoshi's ~1.1M coins, etc.). How many millions in the world want to own 1 bitcoin (which is a nice round number even as we always say you can own a fraction as it's divisible)? From Japan, from South Korea, from the US, and from the rest of the world? The majority of them have been taught "they're not your coins if you don't have the private keys" which is another way of saying, you have to keep the bitcoin in your own wallet as you are the bank. tl;dr, but I just see the supply keep shrinking at these exchanges, and again, no one can print them, so if these institutional investors actually buy bitcoin and hold them in secure "safes" to prevent an exchange from disappearing with them, and hedging with futures, it still boggles my mind how many bitcoin will actually be available at exchanges and this becomes a cycle as more people fomo and buy bitcoin and withdraw to their wallets.
You don't get it. People who are holding these are coins in their private wallets are doing so not because it's a beautiful work of art they want to hang on their wall and show their friends, they are waiting for a price. And when they get that price they will gladly relinquish their coins. And that is my point. The whole concept is bullshit and you know it. This whole theory about how it's going to have a viable economic use is bullshit. As you just admitted you have no intention of "using" these coins for commerce. The whole genesis of this system is they want to decentralize the world economy. Fine. But as you pointed out, NO ONE is doing that. For if there really was a true purpose and people used these coins, (other then drugs), then someone could actually buy up all the coins just as someone could buy up all the shares of AAPL and take the company private. I just wish these lunatics would admit it that there is no practical use for this shit now. Now in the future, that may be different and I suspect there will be a 2.0 version that will emerge much as how Napster paved the way for I-Tunes and Myspace paved the way for Facebook and Ebay paved the way for Amazon.
If you want to get really paranoid, NSA, DOE and perhaps oddly the NWS have supercomputers that they could use to also manipulate supply on the up side. And if you want to get super paranoid, if you control over 50% of the network's computing power you can reverse transactions allowing you to double spend, prevent transactions from confirming, and block all other miners. After working 20 years in government I'm not worried, at all, about the above based on the sheer inertial and difficulty of accomplishing anything at all cutting edge or controversial in government. But if you want to be paranoid.......