Large institutional investors will soon be able to trade futures contracts on the price of bitcoin. While I think this will have salutatory effects in the long run--among other things, it should make bitcoin prices less volatile--it will likely put downward pressure on bitcoin prices in the short term.
This is because there's a lot of bear sentiment about bitcoin's current price run up, that has not been fully reflected in the market price, IMO. (It's possible to short bitcoin now, but you'd have to use an unregulated exchange, which institutional investors tend to be leery of.)
Therefore, it might be a good idea to do a little profit taking now before the bears get a chance to start shorting bitcoin.
-----
"For bitcoin traders, all eyes should be on Dec. 10 and Dec. 18.
That's when former self-styled bitcoin whales will be swallowed up like plankton as the CBOE and CME Group launch bitcoin futures contracts for the first time in history.
...
You see, in bitcoin's cash market, where these whales exist, they swim amongst other bitcoin marine lives without necessarily attacking their co-habitants. The reason is simple. Everyone in bitcoin's cash market is financially incentivized to keep the price of bitcoin high.
Sure, the market sometimes takes a dip, but that’s because some bitcoin holders are taking profits off the table. In the futures market, there is as much reward for the creatures on the downside as well as the upside. Tremendous wealth can be created in a falling market as it can be in a rising market. There are incentives on either side.
Essentially, bitcoin's cash market is like a river. Its flow is dependent on constants and so it generally flows in one direction. The bitcoin futures market, on the other hand, is like an ocean with thermohaline circulation: its flow is dependent on several variables.
Marine life in the futures market is not as friendly. The waters are infested with killer whales. Apex predators that feed on other whales. They even feed on themselves."
https://www.coindesk.com/bitcoin-futures-make-way-new-kind-whale/
More here:
https://seekingalpha.com/article/4128569-5-things-aware-cme-bitcoin-futures
This is because there's a lot of bear sentiment about bitcoin's current price run up, that has not been fully reflected in the market price, IMO. (It's possible to short bitcoin now, but you'd have to use an unregulated exchange, which institutional investors tend to be leery of.)
Therefore, it might be a good idea to do a little profit taking now before the bears get a chance to start shorting bitcoin.
-----
"For bitcoin traders, all eyes should be on Dec. 10 and Dec. 18.
That's when former self-styled bitcoin whales will be swallowed up like plankton as the CBOE and CME Group launch bitcoin futures contracts for the first time in history.
...
You see, in bitcoin's cash market, where these whales exist, they swim amongst other bitcoin marine lives without necessarily attacking their co-habitants. The reason is simple. Everyone in bitcoin's cash market is financially incentivized to keep the price of bitcoin high.
Sure, the market sometimes takes a dip, but that’s because some bitcoin holders are taking profits off the table. In the futures market, there is as much reward for the creatures on the downside as well as the upside. Tremendous wealth can be created in a falling market as it can be in a rising market. There are incentives on either side.
Essentially, bitcoin's cash market is like a river. Its flow is dependent on constants and so it generally flows in one direction. The bitcoin futures market, on the other hand, is like an ocean with thermohaline circulation: its flow is dependent on several variables.
Marine life in the futures market is not as friendly. The waters are infested with killer whales. Apex predators that feed on other whales. They even feed on themselves."
https://www.coindesk.com/bitcoin-futures-make-way-new-kind-whale/
More here:
https://seekingalpha.com/article/4128569-5-things-aware-cme-bitcoin-futures