Launch of Bitcoin Futures Trading Crashes CBOE Site (thestreet.com) 97
"5PM CT is the start of Bitcoin futures trading and the $CBOE website appears to be down," one market watcher posted on Twitter (and his observation was quickly confirmed by other cryptocurrency-watching accounts and confirmed by CBOE). "I'm guessing watching Bitcoin futures start trading is a more popular spectator sport than anticipated."
Bitcoin futures will also begin trading on the Chicago Mercantile Exchange in eight days. The Street report that the anticipation of that "has triggered wild swings in bitcoin prices over the last week." Overall, trading bitcoin futures is a positive development for the cryptocurrency says the research team at Fundstrat... The introduction of derivatives lays the necessary market structure for institutions to allocate cash towards cryptocurrencies, points out Fundstrat... Short sellers may now express negative views on bitcoin, which could lead to short-term pricing pressure. But the ability for short sellers to hate on bitcoin could be viewed as a longer term positive, Fundstrat says. Shorting essentially creates true price discovery and means that hedge funds could take bitcoin more seriously. This should improve the long-term prospects of bitcoin as it broadens sponsorship, Fundstrat believes.
Bitcoin futures will also begin trading on the Chicago Mercantile Exchange in eight days. The Street report that the anticipation of that "has triggered wild swings in bitcoin prices over the last week." Overall, trading bitcoin futures is a positive development for the cryptocurrency says the research team at Fundstrat... The introduction of derivatives lays the necessary market structure for institutions to allocate cash towards cryptocurrencies, points out Fundstrat... Short sellers may now express negative views on bitcoin, which could lead to short-term pricing pressure. But the ability for short sellers to hate on bitcoin could be viewed as a longer term positive, Fundstrat says. Shorting essentially creates true price discovery and means that hedge funds could take bitcoin more seriously. This should improve the long-term prospects of bitcoin as it broadens sponsorship, Fundstrat believes.
Re: (Score:2)
What an original comment on Slashot ! always predicting 0 future price on bitcoin since 8 years ago.
We just need to talk about Jon Katz writing an article about Bitcoin using emacs on his linux desktop, all while listening to Metallica MP3s on his Microsoft Zune.
Re: (Score:2)
If it's good enough for Star-Lord, it's good enough for me!
Re: (Score:2)
What an original comment on Slashot ! always predicting 0 future price on bitcoin since 8 years ago.
The reasonable interpretation is that the collision attacks on SHA-1 and the shortcomings of binary elliptic curves are going to undermine bitcoin in the end. It may take a while.
Re: (Score:3)
https://twitter.com/BitmexRekt... [twitter.com]
The fools who shorted are already getting squeezed, and losing their money.
Re:Bitcoin futures? LOL (Score:5, Insightful)
"The market can remain irrational longer than you can remain solvent."
- John Maynard Keynes
Re: (Score:2)
Re: (Score:1)
And if you think the price will eventually go to zero, you may well be right, but trying to predict when will break you first.
Re: (Score:1)
Do you know many average Joes buying $17000 future contracts?
No, these futures are to attract bigger capital. And if they succeed, we're in for one hell of a global economic crash when the bubble does burst. Imagine the hindsight on that one.
Re: (Score:1)
By "average joe" I meant people with traditional trading accounts. I should have been more clear. People who have accumulated wealth but the only way they invest it is through a brokerage house. There are a *lot* of people like that. People who love to jump on bandwagons when they hear about the latest thing. Such as those who clamor to get in on a hot IPO, for example. They have enough money to move the markets (for a while). Generally they do
Re: (Score:1)
Indeed, I've been sure to have spotted the top multiple times. Each time I sold a fraction, but fortunately kept some in case I was wrong. I don't have nearly as much profit as I could have had, but I'll certainly keep a healthy profit no matter what happens.
Re: (Score:1)
Bitcoin (Score:1)
Bitcoin is like Trump. Unstable.
Re: (Score:3)
Where can I get a betting line on Trump's antics?
Bitcoin futures can put the lottery and bookies out of business. Who is 'making' this market? At this volatility? Good luck to them, if it works it will be insanely profitable. There are tons of compulsive gamblers, just got to get between them and the lottery vendor.
Needs a good web frontend for short term simple bets: e.g. bet (er invest) $___ 1:1, 10:1, 100:1 (long/short) for market clearing in 15 minutes. Bang, verify, clear payment, bets on.
Re:Bitcoin (Score:5, Funny)
Re:Bitcoin (Score:5, Funny)
Re: (Score:1)
Attribution to who? The joke is everywhere. Do you know the original source?
Re: Reality Check (Score:2)
US national debt is denominated in US national currency. Therefore it doesn't matter how imaginatively large the numbers become, fedgov can always pay. It's impossible for a sovereign power to "run out of money". Money is just numbers in a database - are we going to run out of inches or tons, too?
The hard part is domestic price stability and maintaining a steady foreign exchange. That stuff can get really wrecked by bad monetary policy. But any actually-sovereign country can ALWAYS pay its own-currency deno
Re: (Score:2)
The federal and state governments are each considered sovereign, within their respective jurisdictions.
Re: (Score:2)
Close (Score:4, Interesting)
Not all shorts help with price discovery. Covered shorts do, but naked shorts are just plain fraud, no matter what excuses the clearinghouses come up with.
Re: Close (Score:3)
Honestly I am surprised that BTC has come this far. I never would have guessed it would be allowed on any of the exchanges in this direct of a fashion. But NOW, it would be fairly interesting to watch.
I wonder what category this security would fall under. Probably currency but can it be considered under âoeEnergyâ? Considering thatâ(TM)s itâ(TM)s primary input.
Re: (Score:2)
Nah, orlanz is fine. You better call the ambulance for Slashdot, though. Damn website is having a stroke every time someone posts something from an iPhone or iPad.
Re: Close (Score:2)
Is that a bug or a feature?
Re: (Score:1)
If this iPhone behaviour can finally get Slashdot and other websites to support unicode, that's definitely a feature.
Re: (Score:3, Insightful)
Honestly I am surprised that BTC has come this far. I never would have guessed it would be allowed on any of the exchanges in this direct of a fashion.
Why not? A commission is a commission. Let the fools gamble, the house never loses.
Re: (Score:2)
A trader isn't forced to accept your offers. If things are looking risky for them they can turn you away (or ask you for a ridiculous price, which is almost the same thing). All a trader needs to do is make sure the positive bets more or less cover the negative bets. If it swings too far one way then they just sell harder the other way. It more or less works out for them and volatility actually helps.
The only way the math can really fail is if some seller thinks they're so smart they can ignore the formulas
Re: (Score:3)
We all are
Re: (Score:2)
It's not always that black and white.
Kickstarter and Indiegogo can also be seen a market where products are almost exclusively sold as naked shorts.
And yeah, many of them end up accused of fraud.
Naked Short selling is also pretty common in the real world.
IT companies sell contracts for services that don't exist yet, farms sell milk that don't exist yet, refineries selling distallates they haven't even produced yet, miners sell aluminium to BMW for their engines that hasn't been mined or refined yet, etc.
And
Re: (Score:3)
Absolutely nothing that you listed is a short, much less a naked one, with the one exception of, thank God, an example of an actual naked short.
Your examples were: venture funding, venture funding, development contract, hedging, hedging, hedging, naked short. Note that the first three do not happen on markets at all, while the hedging happens on markets that will enforce with the utmost strictness a very hard cap on your exposure. If you reach your credit limit on a futures exchange, the exchange itself
Re: (Score:2)
You're correct in the context of stocks, but I'm not talking about just the stock market.
The underlying principle of a naked short is the sale of an asset that is not owned by the seller. Naked, by it neither being borrowed.
Giving a naked short other names one level down to add specificty and context (your accurate categorizations of my examples) does not subtract from the nature of the underlying transaction -- the sale of an asset that is neither owned, or borrowed. A non-existent asset would satisfy the
Re: (Score:1)
Re: (Score:2)
Re: (Score:2)
Re: Future issues? Scalability? (Score:2)
I man sure there will some form of separation from the real-time system. There will be some float and bulk execution. Volume just needs to be average maintained not kept in sync with reality to stay in the market. Thou of course covers, floats, and bulks will only smooth out the volume only so much. Upping transaction fees and building back into the equity price would help, but it too has limits.
Re: (Score:1)
My guess is you don't have to record every trade in the block chain. Brokerages themselves could just hold a shit ton of bitcoin in their own account, If it trades hands from one user the the other within their brokerage, there's no reason to report back out to the block chain, just update in their ledger who's holding what. Just as when you trade stocks these days you dont get a stock certificate in the mail.
I am pretty sure this is how a lot of existing bitcoin exchanges have operated. Coinbase does not m
Re: (Score:3)
That last thing, that's just called shorting the market. If you do it, you gotta expect the broker will too. Just so they can cover, it's all good.
Re: (Score:2)
Brokerages themselves could just hold a shit ton of bitcoin in their own account
LOL! Why do you think they're only trading in futures, not actual bitcoins?
If it trades hands from one user the the other within their brokerage, there's no reason to report back out to the block chain
Correct, but you can't trade arbitrary amounts that way.
Re: (Score:2)
I'm hopeful that Futures moves large speculative transactions off-chain, and Lightning network moves small ones off chain, so that the number of on-chain transactions will significantly decrease, relative to the use of BTC as and investment/currency. Eventually the main chain will just be used for large settlement transactions.
Re:Future issues? Scalability? (Score:5, Interesting)
The first, and most fundamental is that blockchain technology is inherently non-scalable. It is, effectively an ultra-redundant database system, operating on diverse hardware, in diverse regions, and which has a monotonically growing, non-prunable dataset. It is estimated that there are around 100k nodes in the bitcoin network maintaining a copy of the dataset, and participating in peer-to-peer replication. The total quantity of storage required for each database entry and the network traffic to replicate it are non-negligible.
The proximate problem is an artificial limit on transaction capacity implemented several years ago. At present, the system is designed so that the dataset cannot grow by more than 1 MB every 10 minutes. This limit was put in place to avoid spam attacks resulting in a DDOS of the network. There is a non-trivial computational cost to validate each entry cryptographically. Even my quad core i7 CPU can take 10-15 seconds to validate a 1 MB database update message. Lesser nodes, like ARM devices which wish to maintain a full copy of the dataset may need to dedicate 10-25% of CPU time just to handling incoming updates (i.e. each message incoming at 600 second intervals may require 60-150 seconds of CPU time).
The problem is that demand for transactions exceeds the hard limit. As a result, there is a queue of pending transactions, which currently stands at about 200 MB (or about 30 hours), with transactions removed from the queue in order of the amount they wish to pay as fees. This has led to spiralling fees as users try to outbid each other, in order to have their transactions accepted. Transactions with low fees have recently been timing out after 2 weeks in the queue and have been discarded unprocessed.
There has been an attempt to increase the transaction limit. However, because the bitcoin system is decentralised and based on consensus, such an upgrade would require 100% participation. Anyone that fails to upgrade would find their software completely broken, possibly silently so, such that they could spend bitcoins, but they would not be received, with no warning to this effect. A very complex solution has been developed which permits an increase in the limit with backwards compatibility (as well as fixing some minor security bugs), but as yet the reference node implementation has no GUI or meaningful CLI/API access to it; the network and accounting implementation is fully featured, but there is no practical way to use it, short of developing your own transaction bitstream generator, using some sort of middleware or a 3rd party library with its own low-level API, or a non-reference implementation of the software. As a result, use of this new format has been very limited, and only about 10% of the achievable capacity uplift has been realised.
This has seriously fractured the community. The incumbent developers take the view that the inherent inscalability of the blockchain concept means that development efforts should be focused on layered solutions. Transactions in the main bitcoin blockchain should be large value clearing transactions, which serve to aggregate large numbers of lower value transactions made at a second layer, with potentially microtransactions at a 3rd layer begin aggregated into 2nd layer transactions. Additionally, breaking changes should be avoided unless there is no other credible option, as not all participants run the reference code, and some may have made custom modifications which may require significant development time to implement new mandatory features.
Other groups have taken the view that convenience and capacity available immediately are more important, and have proposed breaking changes. One group, calling themselves bitcoin cash, changed the transaction limit to an 8 MB soft limit, based upon the a configuration option settable in the node options, hence the network can be upgraded to a larger capacity, simply by the majority of participants increasing the soft limit on the
Re: (Score:2)
A node can run with only recent blocks, as long as the other data is available on the network.
If could be made prunable; just copy the oldest blocks worth of unchanged balances into the top blocks, then you can discard the oldest blocks.
Or even a Distributed Hash Table system to store older blocks.
Re: (Score:1)
You're not trading coins. You're making a bet on the price at some date in the future.
Re: (Score:2)
These are cash settled futures on BTC (a financial derivative) as such no BTC is actually changing hands.
Furthermore, on actual BTC exchanges trades are done off block chain. Your BTC ownership only recorded to the blockchain once you withdraw it from the exchange.
The smart money (Score:2)
Can you short Bitcoin futures?
Re: (Score:2)
Yes. Not only can you buy puts on BTC,as well as shorting long options. However, both markets have relatively high volatility, so the costs to invest in these instruments could be a bit high for a while. Also not to mention the old saying that "The market can stay irrational longer than a man can stay solvent, " which should be observed in all cases.
Re: (Score:2)
Too complicated: Long/short, odds you want, duration (15 min, half hour, hour) amount of bet. Bang, deal should be done and legal. No account required, pre-paid CC accepted. No bitcoin.
Use solar powered AI for your option pricing model!
Damn SEC with its qualified option trader rules. Just doesn't want anybody cutting in on the state lotteries business IMHO.
I think Joe sixpack should have just as much access to legal short term, high odds bets/investments, as wall street high rollers.
Re: (Score:2)
I hope they fix it (Score:2, Funny)
Re: (Score:2)
Re: (Score:2)
There will be less than 21 million coins, because there's already a few million that are lost. But even a $21 trillion market cap is only 3 times that of gold. I wouldn't rule it out.
Welcome geeks to the things that matter (Score:1)
Bitcoin is now becoming a thing that matters. Welcome, geeks. We will short the thing that matters. We will speculate on the thing that matters. Websites and co providing crucial infrastructure for the thing that matters will be ill implemented. By morons. It's becoming a thing that matters because people believe that it matters. Not because of reality. Or because of physical presence or existence. Rawly because of believe.
Welcome all.
Welcome to nothing. Welcome to everything.
Tulip mania 2.0. Now in bitcoin
Ignore the pundits (Score:2)
Re: (Score:2)
don't worry, no money will be lost, not one cent.
Re: (Score:2)
All the energy that went into it is lost.
Re: (Score:2)
Yes, but the money paid for that energy was not. Don't worry about the energy, there is no shortage of energy on this Earth or in this universe. Take comfort that the money is never lost, only changes hands.
Re: (Score:2)
Of course there's a shortage of energy that we can easily harness, and generating energy creates pollution.
SWEET (Score:1)
Just what the market needs, more volatility!
What makes bitcoins different than tulip bulbs? (Score:2)
Other than the fact that after the 1637 crash I guess you could plant the bulb or maybe even cook it and eat it.
https://en.m.wikipedia.org/wik... [wikipedia.org]
Re: (Score:2)
What makes bitcoins different than tulip bulbs ?
A tulip bulb cost almost nothing to create. You can't divide or combine them. They rot. They don't fit in your wallet.
Re: What makes bitcoins different than tulip bulbs (Score:2)
Takes energy, water, fertilizer, time, etc - not at all free to create and actually more involved than just being a mining rig you just plug in. You can "split" them by reproducing them via seeds. But yes, it doesn't fit in a regular sized wallet, so I guess that is the distinction. Gold bars also don't fit in the wallet. The dot-com stocks had the form factor same as bitcoins however. Hmmm....
Re: (Score:2)
Takes energy, water, fertilizer, time, etc - not at all free to create
Admittedly not completely free, but really cheap. And most importantly, there's no reason for the trade price to go much above the cost to grow one, which puts a natural ceiling on the bulb's prices. And while you can plug in the mining rig, you still need to pay for electricity and the equipment itself, and those costs go up with the price of bitcoin.
You can "split" them by reproducing them via seeds.
I was talking about splitting in the context of producing change for a transaction, or combining small amounts of change in order to make a bigger transaction
Re: What makes bitcoins different than tulip bulb (Score:2)
Why do costs of operating a mining rig go up as the price of bitcoins goes up? Do you claim bitcoin is driving electricity prices? Do you think that PC's and GPU card prices are driven by bitcoins much?
Re: (Score:2)
Why do costs of operating a mining rig go up as the price of bitcoins goes up?
Because the amount of Bitcoin that can be mined is fixed at 1800 per day.
As the price of bitcoin goes up, more people will start running a mining rig (or expanding it if they already had one). As the total mining hashrate goes up, the protocol will increase the difficulty level to bring the rewards back to 1800 BTC/day. This means that the difficulty (and therefore the operating cost) will tend to an equilibrium with the price.
Re: (Score:2)
It was quite literally a viral bubble:
"The multicolor effects of intricate lines and flame-like streaks on the petals were vivid and spectacular and made the bulbs that produced these even more exotic-looking plants highly sought-after. It is now known that this effect is due to the bulbs being infected with a type of tulip-specific mosaic virus, known as the "Tulip breaking virus", so called because it "breaks" the one petal color into two or more."
https://en.wikipedia.org/wiki/... [wikipedia.org]
Re: (Score:2)
now is the time to get out (Score:2)
this is starting to look like the whole housing loan market scheme.
Not terribly surprised (Score:3)
I know the unmitigated yahoos running CBOE's back-end.
Very "Let's do THIS!", then toss on a bunch of half-assed implementation, and then flipping a nut when things don't go as they imagined.
The Emeror is naked. (Score:1)
Re: (Score:1)
Sweet Home! Alabama? (Score:1)
"Big Men???" keep on turning
Carry on like boys of sin
Singing songs about the teen-girls
He rapes 'ole' 'bamy once again and He likes 'em young
Well I heard Mister Moore deny about her
Well I heard ole Roy put her down
Well, I hope Roy Moore will remember
A southern folk don't need him around anyhow
Sweet home Alabama
Where the guys have not a clue (apparently)
Sweet home Alabama
Lord, it's startin' smell like poo
In Ole 'Bamy they love the POTUS, boo-hoo-hoo
Now we all did what we could do
Now Pussy-Gate does not bothe