Generally, joy and optimism are awaiting the new market players that will join the Bitcoin realm, their pockets full of fresh cash to invest and add to the demand, when futures are traded by CME and CBOE on Dec. 10 and 18.
The news from CME even sent Bitcoin price to a new all-time high of $7,000; thus it is unsurprising that the small fry on forums and around the dinner table are excited about the prospect of new investors coming in on the backs of futures.
But futures are scary things, and perhaps there is also a dark side coming to the Bitcoin market as now people can profit just as much from the drive diving as they can from it rising. There could be some big swells from some big whales on its way.
How futures can affect Bitcoin
As it stands, the man with a fraction of a coin is as happy as the man with 100 the way the Bitcoin market operates at the moment. The more the price rises, the happier each of them are. Higher price means better returns and more money for nothing.
There is no need for the big name players in the Bitcoin market to cause too many waves as they are currently profiting happily from the way things are going. However, futures introduce a different type of playing field as whales, and these are whales that make Bitcoin whales look like shrimp, have an incentive to drive the market down.
Cash markets, such as Bitcoin, are there to serve investors, but a futures market is something different, it is there for people to hedge against risk. It is a pessimistic way to invest, and it bases itself on profiting when things go bad…