Bitcoin Futures Market Explained Price Manipulation

Bitcoin Futures Market Explained Price Manipulation

The Drawback

Enemies with limitless money (The Federal Reserve Board or the Worldwide Financial Fund, for instance), can suppress the value of bitcoin; right here, I show why their suppression can have solely non permanent results. Precisely what worth suppression can obtain, long run, is debatable and never the subject of this text. I’ll simply clarify how worth suppression could be achieved within the quick time period, and why the technique gained’t work in the long run.

Futures Markets

Value manipulation could be completed by the cash-settled futures market. Right here’s how: Think about you’ve 1 bitcoin and want to guess on its future worth. Suppose the spot worth is presently $50,000. You write a contract that in a single 12 months (you possibly can select different time intervals, however let’s go together with one 12 months for simplicity), you’ll promote 1 bitcoin at $50,000 (you possibly can really set any worth).

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