4um: Bitcoin On Fire: Approaching $14K

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Title: Bitcoin On Fire: Approaching $14K
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Published: Dec 6, 2017
Author: Me
Post Date: 2017-12-06 20:04:28 by Pinguinite
Keywords: None
Views: 729
Comments: 12

I'm sure a pullback is due at some point, but this is surpassing my most optimistic expectations. It's gone up about 15% in 24 hours, which was already a price from which a retrace would have been normal and expected.
Next week, the CME is set to start trading "Bitcoin Futures" which are to be settled in cash, something I would equate to simply a betting house for what the real bitcoin price will be, and likely being implemented solely for the purpose of attempting to suppress the true bitcoin supply/demand price.
They might as well be "futures" trading on daily temperature highs for some random US city. It would be just as legitimate.
I am now wondering if we're witnessing now a global economic revolution against centrally issued fiat currency, something that couldn't happen with gold an silver due to the PTB's successful manipulation of those prices.
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#1. To: Pinguinite (#0)
What kind of cash is it settled in? thanks.
If everything is anonymous, how is it known to whom to send the cash?
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
Lod posted on 2017-12-06 21:22:53 ET Reply Trace Private Reply
#2. To: Lod (#1)

"It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brush fires of freedom in the minds of men." -- Samuel Adams (1722-1803)‡

"Resistance to tyrants is obedience to God." -- Thomas Jefferson
ghostdogtxn posted on 2017-12-06 21:31:55 ET Reply Trace Private Reply
#3. To: ghostdogtxn (#2)
Who knows? all that I have are questions about crypto-currencies.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
Lod posted on 2017-12-06 22:05:44 ET Reply Trace Private Reply
#4. To: Lod (#1)
My knowledge of the world of high finance is limited, so I invite those more informed here to correct me on this.
As I understand it, the CME's "bitcoin futures" has no actual connection to bitcoin itself. All the CME would do is allow parties to bet against one another on what the price of bitcoin would be at some point in the future. They choose a price, quantity of bitcoin, and a certain date. One party is the "buyer" and the other the "seller". When that day comes, if the agreed, predicted price is higher than the actual price, then the seller wins. In theory, the seller would then go buy, at the actual price, the prescribed quantity of bitcoin and deliver it to the buyer and the buyer would be required to pay the higher predicted price for it. So the buyer would lose and the seller would win.
On the other hand if the predicted price is lower than the actual price, the buyer wins, because the seller is forced to first acquire the bitcoin at the current higher actual price, and then transfer it to the buyer for the lower predicted price. The amount these parties win or lose depends on how far from the predicted price the actual price is.
However, with the CME, all these "contracts" are not settled in actual bitcoin transfers. They are instead simply settled in cash -- US dollars -- so whichever side loses on these futures bets simply pays the amount of his loss to the winner. No bitcoin is actually acquired by the seller.
Ergo, no bitcoin comes anywhere close to this trading house, ever. In the end, it's simply a betting house where parties can go and find opposing parties to bet on what the price of bitcoin will be on a certain date, and whomever loses pays the winner in US cash.
In the real commodity market, futures can serve a purpose by, say, allowing a farmer to lock in a price for his crop long before he does any harvesting. This protects him in the case of an unexpected glut where there might be a huge nationwide harvest of corn causing prices to fall by the time harvest time comes. Buyers predicting a drought conditions & higher prices would be willing to take the farmer up on the bet.
The futures market also serves a purpose of giving some sense of future public demand and supply of the commodity being traded. But since bitcoin never actually enters the futures market, any such prices agreed on in this futures market are realistically unauthoritative, but at the same time, still watched by the public as an indicator of market sentiment.
And that's where the fraudulent manipulation can come in.
For example, if JP Morgan & Chase bank wanted to suppress the price of bitcoin, which they have a motive to do, they could go to the CME's futures trading and create bets/contracts suggesting the price of bitcoin will unrealistically low at various dates in the future. They could do, say, 5000 contracts where Chase is the seller and JP Morgan the buyer. Then do 5000 more with JP Morgan the seller and Chase the buyer. CME then reports to the world the artificially low predicted prices of these bitcoin contracts, and then real buyers of actual bitcoin are then persuaded to not buy, reducing demand and causing the bitcoin price drop or at least not rise as much as it otherwise would. And when the actual contracts come due, JP Morgan's and Chase's wins and losses cancel each other out, so neither of them our out any money for the price suppression scheme.
So I do view with concern this bitcoin futures trading. Like with gold, it's better to take actual possession than to bet these paper gold contracts. But it does show that bitcoin is indeed a serious threat to the financial elites, and enough of one to, I think, invest in. There was speculation about bitcoin hitting $10k before the end of this year, and now it looks like $20k could easily happen. At this pace $100k could be reached by this time next year. At least if the market remains free and unsuppressed.

Pinguinite posted on 2017-12-06 22:17:36 ET Reply Trace Private Reply
#5. To: Lod (#1)
If everything is anonymous, how is it known to whom to send the cash?

As to this question, the bitcoin blockchain network has no ability to record personal identification of those who send and receive bitcoin, but since the futures trading would not involve actual bitcoin, that's not an issue for them. They will of course keep track of parties, but their ID's are not open to the public as is standard practice, it being confidential financial info.
It would be possible, of course, for a trading house (or anyone else) to obtain bitcoin and show proof of possession for purposes of future delivery, and doing so would remove the anonymity that the bitcoin network offers.

Pinguinite posted on 2017-12-06 22:23:44 ET Reply Trace Private Reply
#6. To: ghostdogtxn (#2)
How can the IRS be raiding the exchanges if it is anonymous?

The CME -- Chicago Mercatile Exchange -- would not be anonymous. They have applied for and received permission from the relevant federal authority (the SEC) to do futures trading in bitcoin.

Pinguinite posted on 2017-12-06 22:27:58 ET Reply Trace Private Reply
#7. To: Pinguinite (#4)

"It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brush fires of freedom in the minds of men." -- Samuel Adams (1722-1803)‡

"Resistance to tyrants is obedience to God." -- Thomas Jefferson
ghostdogtxn posted on 2017-12-06 22:28:45 ET Reply Trace Private Reply
#8. To: Pinguinite (#6)

"It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brush fires of freedom in the minds of men." -- Samuel Adams (1722-1803)‡

"Resistance to tyrants is obedience to God." -- Thomas Jefferson
ghostdogtxn posted on 2017-12-06 22:31:16 ET Reply Trace Private Reply
#9. To: ghostdogtxn (#7)
Well, at 14k btc is already out of my price range.

The unique thing about bitcoin is that there's no real limit to how little can be transferred. The running joke about not being able to buy a loaf of bread with an ounce of gold comes to mind. While a $14k bitcoin is excessive, you could shave off $3 worth (0.000214286 btc) and transfer that to the local baker. Though I'm not sure of the finest price resolution or if there is such a limit.
I have seen references to mBTC and uBTC, mini and micro bitcoin. 1000 minis make a full bitcoin, 1000 micros make a mini. This aspect of bitcoin does make it workable as a sole currency for an economy. The only restrictive requirement would be that everyone would require suitable electronics (tablet, smartphone or PC) with internet to participate.
If you wanted, you could today go buy 50 miniBTC without breaking the piggy bank (About $400, after normal markup).

Pinguinite posted on 2017-12-06 22:41:35 ET Reply Trace Private Reply
#10. To: ghostdogtxn (#8)
I had heard d that the IRS was demanding personal information on btc users from btc exchanges, whatever those are.

The IRS did go after an exchange in US jurisdiction for bitcoin xfer records. The exchange fought that and did win some concessions, only xferring info on people with more than $20 of transfers, and not turning over bitcoin addresses of users.
The IRS wants that for purpose of taxation, obviously.
But the IRS can only go after exchanges in US jurisdiction, and in those countries that they can compel to cooperate, and bitcoin crosses international lines with impunity.

Pinguinite posted on 2017-12-06 22:45:38 ET Reply Trace Private Reply
#11. To: Pinguinite, the end is near (#0)
It's gonna crash. Sell before you're left with nothing but a pile of digital dust, zeros and ones.
The D&R terrorists hate us because we're free, to vote second party
"We (government) need to do a lot less, a lot sooner" ~Ron Paul
hondo68 posted on 2017-12-07 0:32:17 ET Reply Trace Private Reply
#12. To: hondo68 (#11)
It's gonna crash. Sell before you're left with nothing but a pile of digital dust, zeros and ones.

If bitcoin does crash, it'll be for a reason that coders of followup cryptocurrency (Etherium is #2, after bitcoin) will add safeguards against, and it would replace bitcoin. And if Etherium crashes, more improvements will follow in the next cryptocurrency.
The onslaught won't be stopped, and that assumes bitcoin eventually fails, which is far from certain. But either way, cryptocurrency is the new reality. Fiat currency, and with it centralized gov control of life, may be on it's way out in the foreseeable future.

Pinguinite posted on 2017-12-07 1:35:40 ET Reply Trace Private Reply
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The D&R terrorists hate us because we're free, to vote second party