Delivery and harvesting, Wall Street Futures Exchange Blood Bitcoin
In mid-December 2017, the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) from Wall Street launched Bitcoin futures. Many people believe that this represents Bitcoin as an asset recognized by Wall Street and will open. A new round of magnificent bull market.
Different life at the same age
The world's largest options market, the Chicago Board Options Exchange (CBOE), will deliver the last single bitcoin futures contract on June 19.
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On December 11, 2017, CBOE launched the world's first bitcoin futures contract, and after 18 months, it ended in gloom.
Although CBOE's XBT contract is about to exit the stage, in December 2017, CBOE launched another exchange of BTC futures contract BTC, CME Group CME has embarked on the "peak of life."
According to the latest data from the Chicago Mercantile Exchange (CME), CME's bitcoin futures trading volume hit a record high in May, trading a total of about 300,000 contracts worth more than $12 billion, with an average daily trading volume of more than 13,600 contracts. It is about 68,000 bitcoins.
Among them, on May 13th, a new record of the highest daily trading volume was set at 33,677 contracts, totaling 168,000 bitcoins, which is equivalent to a nominal value of US$1.3 billion.
In contrast, the volume of CBOE transactions is particularly shabby.
At the beginning of the line, the trading volume of the two major exchanges was equally divided. Since then, the trading volume of CBOE's bitcoin futures has shrunk step by step. In the same market environment, the trading volume with CME is getting bigger and bigger.
According to the chart data of tradeblock.com, COBE's bitcoin futures trading volume is less than one tenth of CME.
Bitcoin futures players in CME can be divided into five categories: brokers, asset management companies/institutions, leveraged funds, reporting users (medium traders doing hedging transactions), non-reported positions (small traders) .
Among them, the leveraged fund is the absolute main force of the transaction, accounting for 60.38% of the total holding position, indicating that CME has become the home of traders trading in Wall Street professional institutions.
Both CME and COBE's bitcoin futures contracts are settled in cash, which is a friendly settlement for traditional Wall Street hedge funds, and it also poses hidden dangers.
Cash settlement means that players on the floor do not have to purchase BTC physical assets, and buy and sell are settled in US dollars in cash.
This type of settlement facilitates the rapid participation of large investment companies (including institutions, hedge funds and qualified investors) in Bitcoin futures without the risk of actually holding Bitcoin.
But this settlement method also has major drawbacks.
All transactions and settlement processes do not involve the trading of BTCs, and there is no actual promotion of the circulation of BTC objects.
The difference between CME and CBOE bitcoin futures is that COBE XBT contracts each contain only one bitcoin, while CME BTC contracts each contain 5 bitcoins; XBT price has a minimum change of $10/bitcoin, and the minimum BTC price change is $5/bitcoin.
In terms of price indicators, CME uses the price index of each major exchange to make pricing and settlement. CBOE calculates and delivers the transaction price at 4 pm EST on the Gemini exchange settlement date, which brings futures pricing. Certain uncertainties.
On the leverage multiple, CBOE XBT requires 44% initial margin, the maximum leverage is only 2.27 times; CME BTC requires 35% initial margin, which is 2.86 times leverage.
Experts believe that these facts make CME's bitcoin contracts more attractive to investors because they provide the important volume of trading and leverage multiples needed to maintain dominance.
Secondly, CBOE did not focus on bitcoin futures. CBOE joint asset management company VanEck has repeatedly submitted applications to the US Securities and Exchange Commission (SEC) for bitcoin ETFs, and was frustrated and delayed.
Regarding CBOE's suspension of Bitcoin futures, in Reddit and Twitter's related discussions, most people think that this will not have a major impact on the market.
Compared with CME and Bitmex, CBOE's bitcoin futures trading volume is too small, and futures downline will not have much impact on the volume of the entire market and bitcoin prices.
At the same time, some investors expressed their excitement about CBOE's suspension of Bitcoin futures.
CryptoMento, a cryptocurrency analyst, said that this is good news because they used to churn the entire market.
BitPay co-founder Tony Gallippi also said in Twitter that CBOE's bitcoin futures may usher in the next bull market after the end of June.
At the end of 2017, after three months of CBOE bitcoin futures opening, Bitcoin plunged more than 50%.
Bitcoin futures, bear market makers?
In the launch of Bitcoin futures, CME Honorary Chairman Leo Melamed told Reuters that the Bitcoin futures market would “tamed” Bitcoin. He said:
"We will be supervising so that Bitcoin is no longer wild and will not become wilder. We will tame it into a regular, regular trading tool."
In the eyes of many investors, it is the introduction of CBOE and CME bitcoin futures that led to the bitcoin bear market in 2018.
Not only does Tony Gallippi think that Tom Lee, research director at Wallstrat Securities Research's Fundstrat, expressed the same view in his research brief.
In the research brief, he wrote: "In December of last year (2017), CBOE bitcoin futures were introduced, and the price of bitcoin has been falling before the expiration of bitcoin futures contracts."
“Before the expiration of the Cboe Bitcoin futures contract, the price of Bitcoin fell by a lot. Justin Saslau of Raptor Group Consulting also pointed this out. We sorted out some data and found out that this is the case.” Tom Lee “In general, the price of Bitcoin will fall by 18% in the 10 days before the expiration of the CBOE Bitcoin futures contract,” wrote.
For the accusation of Tom Lee, CBOE Global Market President Chris Concannon responded:
"Some people say that Bitcoin futures have seriously affected the price of Bitcoin. This argument exaggerates the impact of Bitcoin futures and ignores other important impact factors. We have found that bitcoin price declines are more reasonable by other factors, such as Review by global regulatory agencies, measures taken by tax authorities, the rise of other cryptocurrencies, and the media’s growing interest in Bitcoin."
According to cryptocurrency analyst Darren Kleine, the biggest problem with CBOE and CME's bitcoin futures is that they are settled in cash.
The reason is that traders may hold a large amount of bitcoin and bet on BTC on cash-settled futures. When appropriate, traders can liquidate their bitcoins, causing prices to plummet.
Therefore, cash-settled futures are not a good way to encourage asset growth, however, they excel at curbing asset prices.
In contrast, Bakkt, the exchange of the American Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, does not have such a problem. It trades bitcoin physical delivery futures. When the contract expires, both long and short sides need to prepare the spot for physical delivery, which will help curb excessive speculation in the market and make the financial ecology of Bitcoin more perfect and stable.
However, in the view of Yu Bolun, the opinion leader of the professional investment community TradingView, the futures market should not be a bear market. The fundamental reason for the replacement of the bulls and bears is the change in the supply and demand relationship of the investment target. Other reasons are only attached.
Magical delivery day effect
CME and CBOE launched Bitcoin futures at the end of 2017. In addition to being considered a bear market incentive, the discussion on the “delivery day effect” has gradually increased.
Bitcoin futures usually have a delivery date. When the contract delivery date is approaching, the long and short parties involved in the futures trading will use various means to influence the futures and even the spot price in order to obtain a favorable contract delivery price. Became a: delivery day effect.
Nearer delivery, bitcoin prices tend to be more volatile.
The reason is that the market will be short-selling in the final battle time. The previous losses can still be held in a way that waits or supplements the margin. Once the delivery date, the loss must be honored.
Therefore, the powerful party will use its various means at the last moment, including releasing news that is beneficial to itself and strong financial strength to force the opponent to make a huge loss and make itself profitable.
Yu Bolun told deep chain finance, close to delivery, and increased volatility. It is already the consensus of traders. For most futures traders who are looking for stability, they will try to avoid opening orders near the delivery date, but there are some people who specialize in opening before the delivery. Single, take the chest in the fire.
Wen Hao is not bright
This article is the original deep chain Deepchain ( ID: deepchainvip) . Unauthorized reproduction is prohibited.
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