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
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Views: 733
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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Begin Trace Mode for Comment # 7.
#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?

Lod posted on 2017-12-06 21:22:53 ET Reply Untrace 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 Untrace Trace Private Reply
#7. To: Pinguinite (#4)

ghostdogtxn posted on 2017-12-06 22:28:45 ET Reply Untrace Trace Private Reply
Replies to Comment # 7.
#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 Untrace Trace Private Reply
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