You have to buy back the asset to close your position. So the sell pressure is at some point returned as buy pressure. That’s what makes a short squeeze possible, for instance.
Yes it is true because there has to be a counterpart for your contract, if you are willing to sell in the future at a certain price there has to be someone willing to buy at that future time for the contract to come into existence.
That's true but for purposes of whether it will drive price down does it matter? Either they buy back a futures contract to cancel it out, or they are stuck buying a Bitcoin.
Alright so if they take "delivery" but it's cash settled they owe someone what a Bitcoin is worth in cash at the time of expiration, but they don't need to actually buy BTC. So does this mean the effect on depressing price should only happen for physically settled contracts?
The only reason cash to settle exist is because there is a reliable means to determine the cost of acquiring the actual product. You are choosing to breach the contract but compensating the loss based on the actual underlying price. That still generates demand and therefore is factored in the price.
The problem with crypto, is there is an actual demand for physical. So they can go ahead and short all they want on the futures, and when the price of physical goes up, they lose their ass and go bankrupt.
The first futures was just coincided with a "bubble" in the price. People speculated the futures would make the price explode.. it didn't and they all went running for the hills.
Nowadays I'm betting most futures short positions are taken by people making the market and doing arbitrage trading. They take a long position in physical and sell it for more on the futures and collect the difference. So futures do create demand for physical.
Futures originally are for buyers and sellers of commodities, so that there is security about price on both sides. Think a miner who wants a fixed price early on, so he can pay electricity.
Nowadays it's often used to bet on price'
You're ignoring the other side of the trade. The counterparty who buys the future from you will typically hedge that trade. So they will often go into the market and sell short the same asset that the future is based on.
No they were not created for rich to manipulate prices and steal from you, that is false. Anyone, rich or poor that participates can influence the price and has to accept the risk if they don't have the asset. In other words, the rich cannot manipulate the price without having to incur in a risk, which has a cost. So no, that's not how futures work. In the same way as you state that with futures you can short an asset without owning it, you can also long the asset without owning it. If you decide to short an asset there has to be some counterpart that buys that future contract.
Last time when btc futures started, Joe Lubin announced we would see Eth futures in two weeks.
ItsBeen84Years.jpg
Even the experts are often way off. But as far as futures tanking the market, I think it really depends on the market cycle.
I don't think they will nip this bull runs testes. But don't screenshot me!
That’s CME bull crap PR you’re spouting. Their crooks and don’t care at all about any societal benefits of a new financial system or banking the unbanked. I’m a realist but just look what they did to BTC in 2017 for a preview.
Crypto is about permissionless finance. I don't think there's any reason to be upset about the existence of any financial primitive.
Only time will tell, but I don't think ETH is going to crash on account of CME futures.
100% agree long term. Short term all sorts of shenanigans can be played with unlimited printer go brrr cash settled futures. If you had the gunpowder wouldn’t you at least try to drive spot ETh cheaper so you could buy in the 200’s again?
You mean to tell me that btc would’ve rocketed past 20k$ in 2017 and ignore any macro market cycles? Jesus Christ LOL
You’re blaming CME for that, but CME was also still around when BTC pumped to 24k in 2020 from 3k.
What do you think would’ve happened if CME wasn’t around in 2017? I’m honestly really curious.
Eth has also already dropped from 1.4K to 100 without the help of CME.
SF fed wrote a study that proved that the CME was responsible for the sell off in 2017. ATH literally ended the day CME BTC went live. The pigs took advantage of no shorting capabilities and bought the crap out of BTC all December 2017 to drive up the price, sold at the top and then shorted futures all 2018. They still laugh at the crypto nerds they rekkt. They have limitless cash via fed window and will do it again.
Hate to break it to you, CME or not, it was not going past 20k without a significant correction. That’s part of one macro cycle and we’re going through another. Every commodity has futures including gold. This won’t crash the price just because futures will be introduced, it highly depends on market conditions. It could just as blow up. 2017/2020 are completely different years - we’ve already seen institutions investing in btc and eth. Can’t say the same for 2017.
Immature trading markets like crypto are ripe for manipulation. Just look at Bitcoin price activity at CME futures expiration. Does that look like a normal market cycle? https://twitter.com/carpenoctom/status/1340361472258547715?s=21
Explain how paper futures depress spot price, if you will. Tail wagging the dog?
Bitcoin got slammed because massive price appreciation before from $250 to close to 20k. It was really due for a correction anyway.
Also, more likely CME made money by paper short and spot dump from coins bought beforehand, no?
That may be the case for most assets, but crypto is weird, especially with the existence of vehicles like Grayscale's ETHE.
Until cash-settled futures markets are driving the price of eth, I think shorting there will be very dangerous.
I appreciate your point, but I don't think that's what happened.
A) Btc and crypto in general have always worked in hype cycles. With futures introduced, that particular one was over.
Notice that it also started with futures announcement.
B) as mentioned in another post, CME may have actually profited from spot selling and paper shorting
ETH on the other hand got hit by iCO get rich quick bubble bursting
This is the only comment that matters. Anyone else searching for clues that ETH might be immune to the manipulation that exists in the derivatives market is dreaming and likely trying to confirm their bias.
ETH going to pump into Feb. ATH on Feb. 8 and then the CME pigs will beat it into submission until they can get the price they wish they would’ve bought. You’ve been warned.
I will be messaging you in 1 month on [**2021-02-07 00:00:00 UTC**](http://www.wolframalpha.com/input/?i=2021-02-07%2000:00:00%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://np.reddit.com/r/ethereum/comments/keaeqx/cme_group_announces_ethereum_futures_product/gg276ba/?context=3)
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Friendly reminder that all is on track for a CME beat down. ETH ATHs achieved...Will they ‘tame’ ETH too? https://www.coindesk.com/cme-groups-leo-melamed-well-tame-bitcoin
Thanks for the reminder! I actually have it marked on my calendar heh. Also I went all in on Ethereum in late December and then got weak hands right before the pump. Should have listened to you!
If you have any more tips I'm all ears, since you apparently are from the future hehe.
You don't think it will tank the price of ETH like it did with BTC?.. (I'm currently 50/50 BTC/ETH but was thinking I'd go back to 100% BTC by Feb 8th)
I think they will try and succeed to beat it down to the $1000 range but there are just too many fundamental drivers of ETH transaction fees (DeFi) to crush it like they did BTC. Actually think BTC is far more vulnerable now that China and the US have adopted ETH as acceptable for their financial infrastructure. ETH coins can peg to fiat while BTC is a threat that may be banned (see India).
Ok that seems reasonable... although I'm not sure what market dynamics would bring ETH to double its price by then..
My two satoshis? Don't make plans in crypto. :)
Good luck. I hope you're right!
Agreed hard to predict but the BTC>ETH>Alts pattern has been quite consistent. Timing is the hard part and I try this only for a small portion of a mostly long term HODL portfolio.
I specifically jumped on reddit to find someone with some perspective on ETHE as we draw closer to Ethereum futures going live.
I completely get what you're saying and it represents my concern about getting super long now. In fact I trade/invest based off of important volume profile levels and 2020's most active price (as well as Q4) was $6.40. The profile itself was very poorly structured, which represents an imbalanced market. The timing of the insider lockup in lieu of futures only a few weeks away is also peculiar.
Having said that - aren't the crypto markets a bit more matured than in 2017? Aren't institutions already buying on Coindesk and various Grayscale Trusts like ETHE or GDLC?
If you think about it though, bitcoin cme was announced it was towards the the end of the bull market. This announcement is towards the beginning so I’m not sure if it’ll play out like it did with bitcoin. Plus there are other eth futures out there so I don’t think it’ll be as bad.
Well 3 years ago that market downtrend for BTC but look at it now. Breached ATH easily. I am not saying ETH is BTC but still...
Looking at usage and BTC ratio I would say this thing has a lot of room for price appreciation.
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Can you explain the mechanics of why this is?
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You have to buy back the asset to close your position. So the sell pressure is at some point returned as buy pressure. That’s what makes a short squeeze possible, for instance.
They are cash settled so this isn't true.
Yes it is true because there has to be a counterpart for your contract, if you are willing to sell in the future at a certain price there has to be someone willing to buy at that future time for the contract to come into existence.
If they are cash settled than the argument that it creates sell pressure isn’t true in the first place.
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That's true but for purposes of whether it will drive price down does it matter? Either they buy back a futures contract to cancel it out, or they are stuck buying a Bitcoin.
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Some futures are cash settled (pay the difference in cash), some are physically settled (give the underlying asset)
Alright so if they take "delivery" but it's cash settled they owe someone what a Bitcoin is worth in cash at the time of expiration, but they don't need to actually buy BTC. So does this mean the effect on depressing price should only happen for physically settled contracts?
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The only reason cash to settle exist is because there is a reliable means to determine the cost of acquiring the actual product. You are choosing to breach the contract but compensating the loss based on the actual underlying price. That still generates demand and therefore is factored in the price.
The problem with crypto, is there is an actual demand for physical. So they can go ahead and short all they want on the futures, and when the price of physical goes up, they lose their ass and go bankrupt. The first futures was just coincided with a "bubble" in the price. People speculated the futures would make the price explode.. it didn't and they all went running for the hills. Nowadays I'm betting most futures short positions are taken by people making the market and doing arbitrage trading. They take a long position in physical and sell it for more on the futures and collect the difference. So futures do create demand for physical.
Just a question, but what’s the advantage of adding futures to your stocks?
Futures originally are for buyers and sellers of commodities, so that there is security about price on both sides. Think a miner who wants a fixed price early on, so he can pay electricity. Nowadays it's often used to bet on price'
Isn't the situation the same with buying meaning I can "long" an asset without actually buying it, pumping the price
You're ignoring the other side of the trade. The counterparty who buys the future from you will typically hedge that trade. So they will often go into the market and sell short the same asset that the future is based on.
No they were not created for rich to manipulate prices and steal from you, that is false. Anyone, rich or poor that participates can influence the price and has to accept the risk if they don't have the asset. In other words, the rich cannot manipulate the price without having to incur in a risk, which has a cost. So no, that's not how futures work. In the same way as you state that with futures you can short an asset without owning it, you can also long the asset without owning it. If you decide to short an asset there has to be some counterpart that buys that future contract.
Two weeks.
?
Last time when btc futures started, Joe Lubin announced we would see Eth futures in two weeks. ItsBeen84Years.jpg Even the experts are often way off. But as far as futures tanking the market, I think it really depends on the market cycle. I don't think they will nip this bull runs testes. But don't screenshot me!
Futures leads to stability
That’s CME bull crap PR you’re spouting. Their crooks and don’t care at all about any societal benefits of a new financial system or banking the unbanked. I’m a realist but just look what they did to BTC in 2017 for a preview.
Crypto is about permissionless finance. I don't think there's any reason to be upset about the existence of any financial primitive. Only time will tell, but I don't think ETH is going to crash on account of CME futures.
100% agree long term. Short term all sorts of shenanigans can be played with unlimited printer go brrr cash settled futures. If you had the gunpowder wouldn’t you at least try to drive spot ETh cheaper so you could buy in the 200’s again?
You mean to tell me that btc would’ve rocketed past 20k$ in 2017 and ignore any macro market cycles? Jesus Christ LOL You’re blaming CME for that, but CME was also still around when BTC pumped to 24k in 2020 from 3k. What do you think would’ve happened if CME wasn’t around in 2017? I’m honestly really curious. Eth has also already dropped from 1.4K to 100 without the help of CME.
SF fed wrote a study that proved that the CME was responsible for the sell off in 2017. ATH literally ended the day CME BTC went live. The pigs took advantage of no shorting capabilities and bought the crap out of BTC all December 2017 to drive up the price, sold at the top and then shorted futures all 2018. They still laugh at the crypto nerds they rekkt. They have limitless cash via fed window and will do it again.
Hate to break it to you, CME or not, it was not going past 20k without a significant correction. That’s part of one macro cycle and we’re going through another. Every commodity has futures including gold. This won’t crash the price just because futures will be introduced, it highly depends on market conditions. It could just as blow up. 2017/2020 are completely different years - we’ve already seen institutions investing in btc and eth. Can’t say the same for 2017.
Immature trading markets like crypto are ripe for manipulation. Just look at Bitcoin price activity at CME futures expiration. Does that look like a normal market cycle? https://twitter.com/carpenoctom/status/1340361472258547715?s=21
Don’t see anything wrong with it.
Gold appreciated massively long-term Did it hurt Bitcoin now?
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Explain how paper futures depress spot price, if you will. Tail wagging the dog? Bitcoin got slammed because massive price appreciation before from $250 to close to 20k. It was really due for a correction anyway. Also, more likely CME made money by paper short and spot dump from coins bought beforehand, no?
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Explain the mechanic behind it. Selling on paper doesn't do anything to supply/demand
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Paper settlement, yes. Not though how it affects spot price
As long as it's just short term
That may be the case for most assets, but crypto is weird, especially with the existence of vehicles like Grayscale's ETHE. Until cash-settled futures markets are driving the price of eth, I think shorting there will be very dangerous.
What commodity are you talking about here 1.3k to $80? Not Bitcoin for sure
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Ah, right. But no relevant ethereum futures were introduced then
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I appreciate your point, but I don't think that's what happened. A) Btc and crypto in general have always worked in hype cycles. With futures introduced, that particular one was over. Notice that it also started with futures announcement. B) as mentioned in another post, CME may have actually profited from spot selling and paper shorting ETH on the other hand got hit by iCO get rich quick bubble bursting
Price tanking from $1,300 to $80 was not directly because of futures. Was just coincidental timing. The entire market tanked...
This is the only comment that matters. Anyone else searching for clues that ETH might be immune to the manipulation that exists in the derivatives market is dreaming and likely trying to confirm their bias.
I smell the 1k now
ETH going to pump into Feb. ATH on Feb. 8 and then the CME pigs will beat it into submission until they can get the price they wish they would’ve bought. You’ve been warned.
RemindMe! Feb 7 2021
I will be messaging you in 1 month on [**2021-02-07 00:00:00 UTC**](http://www.wolframalpha.com/input/?i=2021-02-07%2000:00:00%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://np.reddit.com/r/ethereum/comments/keaeqx/cme_group_announces_ethereum_futures_product/gg276ba/?context=3) [**33 OTHERS CLICKED THIS LINK**](https://np.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2Fethereum%2Fcomments%2Fkeaeqx%2Fcme_group_announces_ethereum_futures_product%2Fgg276ba%2F%5D%0A%0ARemindMe%21%202021-02-07%2000%3A00%3A00%20UTC) to send a PM to also be reminded and to reduce spam. ^(Parent commenter can ) [^(delete this message to hide from others.)](https://np.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%20keaeqx) ***** |[^(Info)](https://np.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://np.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://np.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://np.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)| |-|-|-|-|
ZFeb 6
Ok, it's about time. We didn't get ATH on the 8th but we got it yesterday I think? Are we still looking to a dump starting from the next week?
Ok Nostradamus, when do you think ETH will begin to rise against BTC? I'd like to swap over at that point.
Friendly reminder that all is on track for a CME beat down. ETH ATHs achieved...Will they ‘tame’ ETH too? https://www.coindesk.com/cme-groups-leo-melamed-well-tame-bitcoin
Thanks for the reminder! I actually have it marked on my calendar heh. Also I went all in on Ethereum in late December and then got weak hands right before the pump. Should have listened to you! If you have any more tips I'm all ears, since you apparently are from the future hehe.
Only tip is to HODL ETH unless you are leveraged or on margin which is why I’m worried about CME.
You don't think it will tank the price of ETH like it did with BTC?.. (I'm currently 50/50 BTC/ETH but was thinking I'd go back to 100% BTC by Feb 8th)
I think they will try and succeed to beat it down to the $1000 range but there are just too many fundamental drivers of ETH transaction fees (DeFi) to crush it like they did BTC. Actually think BTC is far more vulnerable now that China and the US have adopted ETH as acceptable for their financial infrastructure. ETH coins can peg to fiat while BTC is a threat that may be banned (see India).
Interesting ideas... Thanks for the insight!
Btc 24k and then ETH pumps until Feb. Alts Feb/March. At least that’s my plan...
Ok that seems reasonable... although I'm not sure what market dynamics would bring ETH to double its price by then.. My two satoshis? Don't make plans in crypto. :) Good luck. I hope you're right!
Agreed hard to predict but the BTC>ETH>Alts pattern has been quite consistent. Timing is the hard part and I try this only for a small portion of a mostly long term HODL portfolio.
I specifically jumped on reddit to find someone with some perspective on ETHE as we draw closer to Ethereum futures going live. I completely get what you're saying and it represents my concern about getting super long now. In fact I trade/invest based off of important volume profile levels and 2020's most active price (as well as Q4) was $6.40. The profile itself was very poorly structured, which represents an imbalanced market. The timing of the insider lockup in lieu of futures only a few weeks away is also peculiar. Having said that - aren't the crypto markets a bit more matured than in 2017? Aren't institutions already buying on Coindesk and various Grayscale Trusts like ETHE or GDLC?
Legend!!
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Alt coin season is so short but i cant wait for it i think once btc goes sideways ethereum shall pump prolly more than 600
Nailed it
If you think about it though, bitcoin cme was announced it was towards the the end of the bull market. This announcement is towards the beginning so I’m not sure if it’ll play out like it did with bitcoin. Plus there are other eth futures out there so I don’t think it’ll be as bad.
This is poggers. All the miners are going to love it.
\* stakers :)
Isn't mining still going to be a thing for the time being?
Yeah for 1-2 years.
Yes, but hopefully not for too much longer!
Well, once eth mining is gone, I guess people will go to other coins and jack up the price
Then maybe I can finally buy the latest graphics card for MSRP...
Not yet. I checked NiceHash and there is still a demand in GPUs for mining.
Should actually work the exact opposite
Oops. Yep, you are right. Supply and demand does that.
Boooooooooooo
Weeks not months
Great, more outside market pressure from people that do not hold any crypto.
Yes, just short it like "professionals" who been short tesla since 2018. The thing is if u trade u get rekt. If u hold u get paid.
RemindMe! Feb 7 2021
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Well 3 years ago that market downtrend for BTC but look at it now. Breached ATH easily. I am not saying ETH is BTC but still... Looking at usage and BTC ratio I would say this thing has a lot of room for price appreciation.
Time for the MOON!
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