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    [Daily Discussion] Friday, December 01, 2017 Bitcoin Markets

    December 01, 2017

    [Daily Discussion] Friday, December 01, 2017 Bitcoin Markets

    [Daily Discussion] Friday, December 01, 2017

    Posted: 30 Nov 2017 08:06 PM PST

    Thread topics include, but are not limited to:

    • General discussion related to the day's events
    • Technical analysis, trading ideas & strategies
    • Quick questions that do not warrant a separate post

    Thread guidelines:

    • Be excellent to each other.
    • Do not make posts outside of the daily thread for the topics mentioned above.

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    submitted by /u/AutoModerator
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    [Megathread] CME Group Bitcoin Futures to launch Dec 18

    Posted: 01 Dec 2017 06:42 AM PST

    Self explanatory.

    Press release

    CHICAGO, Dec. 1, 2017 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced that it has self-certified the initial listing of its Bitcoin futures contract to launch Monday, December 18, 2017.

    CFTC commentary about futures | Comment Thread

    Some opinion/analysis reading from people who seem to know what they're actually talking about, please free to add more:

    Let's Talk About Arbitrage – Bitcoin Futures Edition (Kid Dynamites World)

    Why Bitcoin futures and a shoddy market structure pose problems (FT Alpha) | Archive around paywall | Comment Thread

    submitted by /u/deb0rk
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    Why Bitcoin futures and a shoddy market structure pose problems

    Posted: 01 Dec 2017 01:16 AM PST

    Article URL: https://ftalphaville.ft.com/2017/11/29/2196222/why-bitcoin-futures-and-a-shoddy-market-structure-pose-problems/

    Archive URL (article requires you to set up an account to read): https://archive.is/0ROK0

    The article is quite long and involves some rather complex and lengthy explanations of how CME's Bitcoin futures contract may result in price distortions, futures prices diverging from real Bitcoin prices, not lead to effective price discovery and how that may lead to heavy corrections taking place down the line. From the article:

    There's a popular opinion in cryptoland that the launch of bitcoin futures by the CME in December will trigger an investing rush as institutional investors and hedge funds wade into the market in size. This in turn, the theory goes, will see the price zoom even higher.

    But here's the thing. Smart money almost never takes unhedged directional bets.

    To the contrary, it seeks out risk-free arbitrage opportunities that usually involve spread or basis-based trades that take advantage of market pricing anomalies.

    (...)

    What's the takeaway from all this?

    Mainly that the CME has created a futures product that is likely — in the first instance at least — to benefit speculators over those trying to execute actual arbitrage positions that can lead to better price discovery. And that this is down to the shoddy market structure underpinning the market in general.

    What's the risk?

    That this leads to the sort of anomalies that distort price discovery until the mother of all corrections can occur. A realistic scenario as a result is this one: theoretical returns on contango trades gets so excessively large that it finally pays for arbitrageurs to take on both the related financing costs and market fragmentation and liquidity risk.

    At that point, if the position is significant enough, either the curve flattens or (in the worst case scenario) flips abruptly into backwardation (a scenario where futures trade at a discount to spot prices) encouraging a brutal wave of physical selling to compensate.

    While I cannot claim to understand the technicals at play, the article is an interesting read. Thoughts?

    submitted by /u/dnivi3
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    CME Group Self-Certifies Bitcoin Futures to Launch Dec. 18

    Posted: 01 Dec 2017 05:35 AM PST

    Article URL: www.cmegroup.com/media-room/press-releases/2017/12/01/cme_group_self-certifiesbitcoinfuturestolaunchdec18.html

    From the press release:

    CHICAGO, Dec. 1, 2017 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced that it has self-certified the initial listing of its Bitcoin futures contract to launch Monday, December 18, 2017.

    "We are pleased to bring Bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities," said Terry Duffy, CME Group Chairman and Chief Executive Officer. "Though we have worked through a lengthy, comprehensive process with the CFTC to get to this point, we recognize bitcoin is a new, uncharted market that will continue to evolve, requiring continued collaboration with the Commission and our clients going forward. At launch, our new Bitcoin futures contract will be subject to a variety of risk management tools, including an initial margin of 35 percent, position and intraday price limits, and a number of other risk and credit controls that CME Group offers on all of its products."

    Looks like it is happening!

    submitted by /u/dnivi3
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    CFTC commissioner speech about Bitcoin futures, from CFTC.gov

    Posted: 30 Nov 2017 09:43 PM PST

    http://www.cftc.gov/PressRoom/PressReleases/opaquintenz4

    "Perhaps one of the most prominent ideas associated with FinTech are digital currencies, led by bitcoin. Recently, the Chicago Mercantile Exchange Inc. (CME) and the CBOE Futures Exchange (CFE) began discussions with the CFTC about listing new bitcoin futures products. Bitcoin futures would provide a new platform to gain or hedge exposure to bitcoin's volatility. Given their novelty, I want to spend a few minutes discussing the CFTC's oversight over bitcoin futures products.

    Prior to listing a new futures contract, the Commodity Exchange Act (CEA) provides exchanges with the option to either (i) submit a written self-certification to the CFTC that the contract complies with the CEA and CFTC regulations, or (ii) voluntarily submit the contract for Commission approval.8 The two processes are similar in that unless the Commission finds that a new product would violate the CEA or Commission regulations, the exchange may list the new contract.9

    As a matter of practice, exchanges bring the vast majority of new products to market through the self-certification process. Sometimes in the case of novel products, the exchanges voluntarily provide the Commission staff with advanced draft contract terms and conditions for their proposed futures contracts. This has been the case for bitcoin futures, where although the exchanges plan to use the self-certification process, staff has had the opportunity to review information provided by CME and CFE, engage in many discussions, and evaluate whether any aspects of the contracts raise questions regarding compliance with the CEA and Commission regulations.

    One noteworthy CEA provision is that an exchange may not list a contract that is readily susceptible to manipulation.10 Further, exchanges have a duty to monitor market activity on an ongoing basis to detect and prevent manipulation, price distortions, and, where possible, disruptions in the cash-settlement process.11 CME and CFE will use the tools at their disposal, through a combination of real-time monitoring, position limits, and information sharing agreements with the underlying cash exchanges, to prevent and detect manipulative practices. In addition to the exchanges' efforts, the CFTC has its own anti-fraud12 and anti-manipulation authority.13 Although there will always be bad actors willing to engage in manipulative or fraudulent practices, the launch of the bitcoin futures contract provides investors with an opportunity to trade bitcoin exposure in a regulated market.

    With respect to clearing, the relevant registered derivatives clearing organizations (DCOs) have been providing Commission staff with information about how they intend to manage risks associated with bitcoin futures. Commission staff has been reviewing this information, including examining how the DCOs will satisfy their obligation to establish initial margin requirements that are commensurate with the risks of the contracts.

    After any contact is launched, Commission staff will engage in a variety of oversight activities. These activities include monitoring and analyzing open interest, initial margin, and variation payments, as well as stress testing positions. Commission staff also will conduct reviews of exchanges, clearing firms, and individual traders involved in the trading and clearing of bitcoin futures. Further, if the Commission determines that the margin the DCOs hold against bitcoin futures positions is inadequate, it can take measures to require that the margin levels be increased.

    Of course, the Commission does not endorse any particular futures contract, including bitcoin. It is incumbent on market participants to conduct appropriate due diligence to determine whether these products, which have at times exhibited extreme volatility, are appropriate for them."

    http://www.cftc.gov/PressRoom/PressReleases/opaquintenz4

    submitted by /u/modeless
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    Bitcoin almost at $10,000: What's the trade? (Part 2)

    Posted: 01 Dec 2017 06:41 AM PST

    So you might remember I made a post about what to expect from Bitcoin once it broke the $10,000 mark. The premise was, based on the growing short position in the face of a rising price, combined with a major psychological hurdle coming up, if that hurdle broke (which it did) we should expect to see a pretty major short squeeze (which we did). Here's the post

    https://www.reddit.com/r/BitcoinMarkets/comments/7g5o1b/bitcoin_almost_at_10000_whats_the_trade/

    The premise resulted in basically 3 main predictions. IF price broke $10k, we should expect to see:

    1. A short squeeze, characterized by a powerful run up of $500, $600, even $1000 in just a few hours as shorts scramble to cover their losing trades (check)
    2. After the capitulation event of the short squeeze, we should expect a powerful reversal, as capitulation events usually precede reversals. My reading of the charts told me we should expect this correction to touch $9000 (check...well, $8850, so close enough)
    3. We should expect to see the overall short positions to go down significantly, as shorts cover their trades (check)

    Looking at the short positions, we see outstanding shorts went from around 22,000 to about 12,000, a huge reduction in such a short time.

    https://www.bfxdata.com/positions/btcusd

    At this point, I should point out that this was an unusually accurate prediction. As much as I'd like to brag about my market predicting skills, whenever you're THIS accurate, it's almost always a fluke. The good news is, You don't NEED to be that accurate to be profitable. With smart entry/exit spots, appropriate stop losses, and profit taking along the way, "close enough" is almost always close enough to make money. The point is, you can't start thinking that you're some market savant who can't be wrong. Hubris is a killer in the markets.

    So that said, what's the trade?

    This doesn't require any complex analysis. Clearly, the trade is to buy. Remember the old traders adage "the trend is your friend". We're still well within the confines of a powerful multi year bull market, and we just had a roughly 20% correction, AND we're bouncing hard off the lows. This is as classic a "buy" set up as you're ever going to find. Moments like this is when traders make the bulk of their money. Chop markets are notoriously hard to trade. Trending markets are a dream in comparison.

    That said, as always, place stops because nothing is ever 100% in markets. But as a trader, your job is to get on the side MOST LIKELY to prevail, not "will 100% prevail" because such a thing doesn't exist. Currently, the risk/reward dynamic skews heavily to the bull side, and I wouldn't even start to think about taking profits until the $14,000-$15,000 level (unless of course something happens until then that changes the calculation)

    submitted by /u/BTCrob
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    Why the momentum is justified

    Posted: 01 Dec 2017 12:52 AM PST

    day to day volatility aside parabolic> super exponential growth blablabla is quite easily explained imo:

    So have experience trading illiquid, emerging markets for a sell side bank where 'inflows' often change the name of the game (but new to bitcoin), so just my initial 2 Satoshis:

    So..

    market capitalisation is directly proportional to the sensationalism or 'hype' around bitcoin

    we were at $15bn a year ago vs $170bn + now in bitcoin alone

    when you have supply which isnt able to scale to an exponentially growing demand (media attention etc), the price can only go north. 16.7m out of 21m are now in circulation, whereas the market cap is growing >exponentially

    so forget the bubble talk, its pure supply and demand, a tiny% citizens in advanced economies have adopted crypto at all. And yes, curiosity and the risk of 'missing the train' has reached a stage where the inflows (aka adoption rate) far outweights profit taking, bitcoin outflows.

    We are also bearing witness to the growth of a new, investable (and viewed as revolutionary) asset class (ok bitcoin is still a commodity), but when global fixed income markets (total debt outstanding) stands at $82 TRILLION - $170 odd billion is only the beginning)

    So dont drop bitcoin until a.) sensationalism dies down (which is unlikely purely on price momentum) or b.) we reach market saturation (ie 50pct of the population owns the currency) - a point at which bitcoin moves from commodity to currency

    now that x% of adoption is the only factor that depends on the strength of the technology - ie the only true long term risk

    so: the fact that adoption is still relatively low (sub 0.2% from a report i read somewhere), sensationalism is still growing, market cap is still tiny for a new financial asset class and supply is hardwired to be fixed - makes the risk return off the charts to be long.

    TLDR: Momentum is justified, buy the dips

    anyway... new to the game, appreciate your thoughts.

    submitted by /u/thmadness
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    Simplefx stealing over 200k from me!!

    Posted: 30 Nov 2017 05:10 PM PST

    Beware, they are stealing 200k from me and agreed to a refund before. Then got a response today with "We investigated the case further and unfortunately did not find any solution acceptable for all sides disadvantaged by the issue. We regret to inform you that we are forced to maintain our decision and no refunds will be approved. ". Fucking bullshit. I will be contacting my lawyers.

    submitted by /u/transactionstuck
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    DO any of these exchanges offer coin protection if (God forbid) they get hacked? Bittrex, Kraken, Gemini, Binance, GDAX/Coinbase, etc. Throw in your favorite...

    Posted: 30 Nov 2017 10:12 PM PST

    So security is my #1 priority when using an exchange. They say not to keep your coins on an exchange but the reality is that if BTC is going through a correction - it will need to be on the exchange because there won't be enough time to send it onto the exchange (sometimes it takes literally half the day or more).

    Are there exchanges that offer 100% buyer protection and will refund the coins within a reasonable period (days/a week or two and not months)?

    I.e. I love the IP Whitelist that bittrex has, but I don't think any exchange is 100% right now. List your top and reasons where they helped you get your money back if anything.

    Appreciate quality feedback and welcome all to join in the on the discussion if you feel you can contribute. Thanks!

    submitted by /u/embodytntra
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    Apparently coinbase had a referral program where you'd get $10 worth of Bitcoin for free just for signing up.

    Posted: 01 Dec 2017 03:05 AM PST

    (just thoughts in hindsight!)

    And $10 as a referral bonus. I beleive this was around since 2013.

    So the first people who signed up to that referral program got what's equivalent to a $1,000 sign-up bonus, and one grand for each friend they brought along, which probably makes this the biggest referral bonus in history

    submitted by /u/throwawaybankam
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    Can you fund GDAX/Coinbase over the weekend?

    Posted: 01 Dec 2017 12:31 AM PST

    I'm forced to use Australian and New Zealand exchanges, so I don't really know the functionality of GDAX/Coinbase. Are you able to get funds into the system over the weekend, or do business days need to pass in order to get money into the exchange?

    submitted by /u/magpietongue
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    Coinbase has been holding onto $7k+ of my money for 24 days and will not tell me when it will be returned

    Posted: 01 Dec 2017 09:45 AM PST

    Coinbase rejected a bank wire I sent on November 7th and sent me an email saying the funds would be returned to the account within 3-5 business days. I followed up on the phone with Coinbase support on November 21st and was told that the case had been marked as "high priority" but they could not give me an ETA for when the funds would be returned. I've tried to follow up again several times yesterday and today but their customer support phone line simply says "We are currently experiencing a large volume of calls and will not be able to provide support in a timely manner. Please call back later." This is really frustrating and I am wondering what my next steps should be.

    submitted by /u/antigravity_import
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    Two words to everyone hyped about le bitcoin futurzzz & wallstreet money

    Posted: 01 Dec 2017 09:42 AM PST

    Priced in

    submitted by /u/Yanlii
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    If in a hurry, never use Xapo

    Posted: 30 Nov 2017 09:20 PM PST

    Trying to transfer my Bitcoin out to an exchange, it's been a day and the transaction says "Validating.." it has not been broadcasted to the Network.

    If you are in a hurry never you Xapo. Absolutely unreliable.

    submitted by /u/phasnox
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    Why can't bitfinex get an audit if they have millions of dollars?

    Posted: 30 Nov 2017 07:33 PM PST

    Because no U.S. Accounting firm will touch them. They provided a memo stating it should not be relied upon and provided no assurance. I wonder why...

    submitted by /u/cryptotrump
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    Naked Short Selling Bitcoin

    Posted: 01 Dec 2017 08:52 AM PST

    Ok guys - so the thing that's got me concerned right now with all this futures business is naked shorting of bitcoin.

    On the one hand, the establishment of a futures market could be a gigantic boost to the overall marketcap and legitimacy of the crypto space.

    ON THE OTHER HAND, papering over asset prices via naked shorting and price manipulation is EXACTLY how the powers that be control the price of Gold, Silver, etc.

    My question is, can they do this same thing with bitcoin? Does bitcoin have any technical capabilities that might allow it to evade capture and death by fiat? How do we fight if Wall St. et.al decide to naked short the hell out of the BTC market? I know we're over $300B now but that is peanuts to the major financial institutions?

    Appreciate any information/thoughts you guys have. What a wild week!!

    submitted by /u/Murda314
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    Trading Crypto/Currency pairs

    Posted: 01 Dec 2017 08:13 AM PST

    Hi, I'm wondering about tools and an approach that would help track trading a coin type for another coin type and clearing knowing the mapping to actual value.

    For instance, if you trade BTC for LTC when LTC is down and then intend to trade LTC when it is up for another BTC/ETH, how you can known how the conversion is tracking.

    I have been trading for some time, but this is still hard for my brain to brok. So far best thing I came up with was hop to USD for each sale instead of coin to coin. I'm sure there are well reasoned approaches to keep ones sanity?

    submitted by /u/Thump604
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    Cryptocurrency Prediction for 2018

    Posted: 30 Nov 2017 12:03 PM PST

    2018 may be the year where the clash between traditional banking system and cryptocurrencies emerges to higher level of visibility. There may be more aggressive marketing by banking system and government to maintain the fear and controlled perception among the mainstream population toward cryptocurrencies. We will see how this goes.

    submitted by /u/namesign
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    Gemini blocks sending/receiving BTC to their exchange due to, "an extreme delay in block mining on the Bitcoin network" 18:18 UTC Nov 30th

    Posted: 30 Nov 2017 10:22 AM PST

    "BTC deposits and withdrawals are temporarily unavailable due to an extreme delay in block mining on the Bitcoin Network. Your full BTC balance is still securely being stored in Gemini's offline storage systems. We anticipate the network to recover to full health soon."

    submitted by /u/ILikeGreenit
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    Has anybody used Bitflyer in US yet?

    Posted: 01 Dec 2017 06:48 AM PST

    Very successful Japanese exchange was licensed in US this week. I signed up but haven't deposited anything yet. Does anybody have experience with them yet...good or bad???

    submitted by /u/Nunoyabiznes
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    CME to launch bitcoin futures in three weeks after green light from regulator; bitcoin jumps

    Posted: 01 Dec 2017 06:35 AM PST

    The world's largest futures exchange, CME, announces it has completed self-certification with the Commodity Futures Trading Commission to launch its bitcoin futures contract on Dec. 18. The news comes as Cboe and Cantor Exchange self-certify for their own bitcoin derivatives. Bitcoin's price rises as the launch of bitcoin futures will pave the way towards establishing the digital currency as a legitimate asset class and launching bitcoin exchange-traded funds. CME announced Friday its new bitcoin futures contract will be available for trading on Dec.18.

    The CME announcement came as the Commodity Futures Trading Commission said it will allow the world's largest futures exchange and its competitor, the Cboe Futures Exchange, to launch bitcoin contracts. A Cantor Exchange also self-certified a new contract for bitcoin binary options, the commission said.

    Bitcoin traded 6 percent higher at $10,512, recovering partly from a 20 percent drop to $9,021.85 from a record high of $11,377.33 hit Wednesday, according to CoinDesk.

    "I think it is going to enable finally the approval of bitcoin ETFs, and other digital currency ETFs, which is game changing," Barry Silbert, founder and CEO of Digital Currency Group, said on CNBC's "Squawk Box."

    CME's announcement comes as other major exchanges rush to launch their own bitcoin derivatives products.

    submitted by /u/XSERIES547
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    If you knew bitcoin was going to crash to zero, how could you profit off that crash? (mental exercise)

    Posted: 30 Nov 2017 08:33 PM PST

    I don't think and I am not saying this is going to happen! This is just a fun mental game I was playing.

    I think the safest thing you could do is put your monet in fiat, but I know some people probably have better ideas than me!

    submitted by /u/auraslip
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    NovaExchange closing --- Help with 2FA on forgotten account

    Posted: 30 Nov 2017 05:43 PM PST

    Hey

    So with nova closing next year, as I read in the email they sent me, I remembered I have some coin sitting there. Unfortunately, I have since replaced my old phone, and have no access to my 2FA code. Here's where the real problem starts.

    Nova has a contact page, but I have to be logged into to do so. Not having my 2FA, I can't contact any of the staff, as I am not logged in. Anyways, if anyone has a contact email for them, or any way of contacting them, I would really appreciate it.

    submitted by /u/skrillac
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    I'm starting a newsletter on relevant blockchain and cryptocurrency links I come across. Would be awesome if you subscribed.

    Posted: 30 Nov 2017 09:09 PM PST

    You can subscribe at: Blockchain Breeze

    submitted by /u/Er0si0n
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