Much has been reported, speculated and talked about such a "future market" of Bitcoin, including here in the Criptomoedas Fácil, we have reported several times, ads of scholarships around the world that are or want to list the crypto-currency as their trading asset. It is undeniable that the fact that the largest trading exchanges in the world add Bitcoin, regarded by others as a bubble, offers the currency a unique and incredible institutional credibility. I have already said, from Karl Marx to Adam Smith, that economics is the basis of social construction and that, from the organization of it, social "webs" are constructed, thus, a recognition of money by big economic players is as if was a certificate of credibility for the currency, so criticized by governments and orthodox in economics.
According to Lanre, not only whales can be devoured by such a future but any smaller crustacean that chooses to ignore the potential impact that a derivative market may have on an underlying commodity. You see, in the cash market, the day-to-day buying market, the "bitcoins whales" swim among other bitcoin marine lives without necessarily attacking their co-inhabitants. The reason is simple: Everyone in the cash market is financially encouraged to keep the price of bitcoin high.
Already in the futures market, there is so much rewards for creatures in every layer, either the bottom or the top, and tremendous wealth can be created in a falling market, as it can be in a growing market. There are incentives on both sides.
Essentially, the bitcoin box market is like a river. Its flow is dependent on constants and therefore usually flows in one direction. The future bitcoin market, on the other hand, is like an ocean with thermohalian circulation (deep ocean circulation): its flow depends on several variables. Marine life in the futures market is not so friendly. The waters are infested with killer whales. Predators that feed on other whales, or even feed on themselves.
So much optimism with the currency's debut in the futures markets may not necessarily mean an increase in the value of Bitcoin in the "cash market", after all, as we can see, both markets are diametrically opposed, the great difference, in order to simplify, is which, in the cash market, exchanges for example, are filled by optimists, already the people of futures are the pessimists.
Put another way, the cash markets were created for investors, while the futures market was created for risk protection. Investors go to the cash markets because they believe the value of assets will increase. In the case of the future market, the motivation is another, they enter because they do not want the price of a certain asset to move against them, see, for example, a corn farmer sells futures contract because he fears that the price falls and wants to guarantee a price for its corn when it eventually harvests it. A corn-maker buys a futures contract because it fears that the price of corn will increase and that it will reduce the price it pays for corn. Both buyers and sellers in their own way are pessimistic.
Thus, unlike the cash market, where there is actual buying and selling of a "good," in the future market, it is all pure market speculation, with a "good" ballast for the future. Bitcoin will certainly face a strong "test" that comes from its own success. In the future market little matter the network scalability, the solutions to the blockchain, the Chinese miners or even if the coin may or may not become a reserve of value, or serve to pay for coffee in the corner bakery, only matters here the bets, be they in the high or the fall, there is no whale that can not be swallowed by a lambari, if it is not attentive to the movement of the tides.
Can bears dominate the bulls? Vice versa? Nobody knows. Will the introduction of futures will lead to an increase in the price of Bitcoin? No one knows for sure.
According to Lanre, not only whales can be devoured by such a future but any smaller crustacean that chooses to ignore the potential impact that a derivative market may have on an underlying commodity. You see, in the cash market, the day-to-day buying market, the "bitcoins whales" swim among other bitcoin marine lives without necessarily attacking their co-inhabitants. The reason is simple: Everyone in the cash market is financially encouraged to keep the price of bitcoin high.
Already in the futures market, there is so much rewards for creatures in every layer, either the bottom or the top, and tremendous wealth can be created in a falling market, as it can be in a growing market. There are incentives on both sides.
Essentially, the bitcoin box market is like a river. Its flow is dependent on constants and therefore usually flows in one direction. The future bitcoin market, on the other hand, is like an ocean with thermohalian circulation (deep ocean circulation): its flow depends on several variables. Marine life in the futures market is not so friendly. The waters are infested with killer whales. Predators that feed on other whales, or even feed on themselves.
So much optimism with the currency's debut in the futures markets may not necessarily mean an increase in the value of Bitcoin in the "cash market", after all, as we can see, both markets are diametrically opposed, the great difference, in order to simplify, is which, in the cash market, exchanges for example, are filled by optimists, already the people of futures are the pessimists.
Put another way, the cash markets were created for investors, while the futures market was created for risk protection. Investors go to the cash markets because they believe the value of assets will increase. In the case of the future market, the motivation is another, they enter because they do not want the price of a certain asset to move against them, see, for example, a corn farmer sells futures contract because he fears that the price falls and wants to guarantee a price for its corn when it eventually harvests it. A corn-maker buys a futures contract because it fears that the price of corn will increase and that it will reduce the price it pays for corn. Both buyers and sellers in their own way are pessimistic.
Thus, unlike the cash market, where there is actual buying and selling of a "good," in the future market, it is all pure market speculation, with a "good" ballast for the future. Bitcoin will certainly face a strong "test" that comes from its own success. In the future market little matter the network scalability, the solutions to the blockchain, the Chinese miners or even if the coin may or may not become a reserve of value, or serve to pay for coffee in the corner bakery, only matters here the bets, be they in the high or the fall, there is no whale that can not be swallowed by a lambari, if it is not attentive to the movement of the tides.
Can bears dominate the bulls? Vice versa? Nobody knows. Will the introduction of futures will lead to an increase in the price of Bitcoin? No one knows for sure.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.