You’ve been able to short bitcoin on okcoin, bitfinex, bitmex either via margin or through futures products for years.
Secondly, newly launched futures products will have very thin liquidity due to the lack of market makers. There is no way a short/long position on CME will move the market in a meaningful way for a while.
I wish Bloomberg et al will stop repeating this “you can’t short” meme because it you can and you could for years.
Counterparty risk makes those venues practically useless for shorting. If Bitcoin goes up, you lose on the short. If Bitcoin crashes, the exchanges likely get compromised and you lose on counterparty risk. The only time you "win" is if Bitcoin goes down a little. Those aren't savvy trading parameters.
Theoretically. In reality - real traders couldn't even trade this thing as there was no infrastructure and too much system risk. If I fund my speculative 100-500k trading account who guarantees I'll be able to close out and cash out when I want? Noone could so far. Futures market will add much needed liquidity and confidence that one could actually trade this thing actively and with apropreate position sizes.
So far all BTC trading was done mostly by hobbyists who have no clue how markets function.
Shorting requires two parties. Someone has to loose the bet. If either that person doesn't hang around or the escrow fund disappears mtgox-style, your savvy short position also goes up in smoke. Or maybe, during the crash, the exchange decides to settle up with you by giving you bitcoins. That transfer should only take a few days/weeks during the panic of a real crash. Enjoy the ride.
Wall Street is correct in saying that you cannot short bitcoin because the massive regulatory infrastructure that backs such transactions doesn't really exist.
One of my favorite websites is running an add: "Buy bitcoins by credit card, before it's too late!" That too late thing is coming sooner than later.
Personal investors/prop traders have been able to short for years. Investors who aren't allowed/don't want to have direct custody of assets haven't been able to short until now.
I believe all BTC trading spikes are driven by some of the existing owners swapping coins and cash every now and then to keep the trading volume high. It is in their best interest to get the prices bounce back higher whenever it goes down.
Once the price is manipulated higher, they can sell and keep the cash when someone who thought BTC is the next "I-Dont-Know-What-It-Is-But-Its-Going-Higher-Everyday" buys it. Since there are no regulators to protect against market manipulation, it's a fairly easy thing to do 'legally'.
As per GDAX you only need 10s of millions of dollars worth of coins to manipulate and mint money on this. Ordinary folks can't do it, but those who have been holding a few thousand or tens of thousands of coins can easily do this. The bitcoin billionaire brothers for example can do this. Buy every low priced limit order until it hits the price they want and then sell it off based on the frenzy buying on the back of the "always-bouncing-back-safe-harbor-currency".
Rinse and repeat every time price takes a dip.
I hope at some point someone will step into regulate things around bitcoin so that the real market demand will determine its prices. I read an article that people are mortgaging their homes to buy BTC.
If nothing changes, we might be looking at a sequel of the movie "The Big Short"
You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will.
If you want to short cryptocurrency, short tethers.
I'm consistently confused as to who is buying all the tethers in such crazy amounts. It's not like they are appreciating in value. They are sort-of pegged to the dollar, but why not just hold the real dollars?
> there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will
Can you explain? What's the exchange? How do they print Bitcoin (I presume that's what you mean by "tokens")? How does that drive the price up rather than down?
It's $1.15b[1] and most likely to be the result of incoming USD wires. The Tether USD in circulation accounts for 0.36%[2] of the Bitcoin (BTC) market cap.
I and some others explained this in another thread [0] about a week ago. The basic explanation is that because of a simple arbitrage relationship between futures and spot, prices in these markets are tightly linked regardless of how the futures contracts are settled.
I dont think there are any experienced shorters sane enough to short something with this much upward momentum. Once we get a decent downtrend though watch out.
That's not how it works... If you believe that "upward momentum" or "downtrend" mean something, why don't you go long now and sell at the first signs of weakness? Easy money, right? In reality, there are no simple and exploitable rules like this.
I have to admit that I'm quite surprised by this, I had expected that the debut of futures would have caused an almost-instant disruption of supply and demand.
Did not read the article, looks like someone is writing to boost the rise. As of this writing BTC is about $18.6k. It was hovering around $19.5k this past weekend.
You didn't read the article but people had to read your comment. I'm not sure why people do this, isn't Reddit available for that?
I don't see why Bloomberg journalists (or the corporation responsible for selling terminals, software, datafeeds and such) would care one way or another about the rise. Or drop.
This seems to be the case with most of the articles about Bitcoin. I suspect there are a number of large holders and exchanges paying PR firms to get stories like this published/upvoted/etc and keep the train going.
[+] [-] verroq|8 years ago|reply
Secondly, newly launched futures products will have very thin liquidity due to the lack of market makers. There is no way a short/long position on CME will move the market in a meaningful way for a while.
I wish Bloomberg et al will stop repeating this “you can’t short” meme because it you can and you could for years.
[+] [-] JumpCrisscross|8 years ago|reply
[+] [-] readhn|8 years ago|reply
So far all BTC trading was done mostly by hobbyists who have no clue how markets function.
[+] [-] sandworm101|8 years ago|reply
Wall Street is correct in saying that you cannot short bitcoin because the massive regulatory infrastructure that backs such transactions doesn't really exist.
One of my favorite websites is running an add: "Buy bitcoins by credit card, before it's too late!" That too late thing is coming sooner than later.
[+] [-] cassetti|8 years ago|reply
[+] [-] jusonchan|8 years ago|reply
I believe all BTC trading spikes are driven by some of the existing owners swapping coins and cash every now and then to keep the trading volume high. It is in their best interest to get the prices bounce back higher whenever it goes down.
Once the price is manipulated higher, they can sell and keep the cash when someone who thought BTC is the next "I-Dont-Know-What-It-Is-But-Its-Going-Higher-Everyday" buys it. Since there are no regulators to protect against market manipulation, it's a fairly easy thing to do 'legally'.
As per GDAX you only need 10s of millions of dollars worth of coins to manipulate and mint money on this. Ordinary folks can't do it, but those who have been holding a few thousand or tens of thousands of coins can easily do this. The bitcoin billionaire brothers for example can do this. Buy every low priced limit order until it hits the price they want and then sell it off based on the frenzy buying on the back of the "always-bouncing-back-safe-harbor-currency".
Rinse and repeat every time price takes a dip.
I hope at some point someone will step into regulate things around bitcoin so that the real market demand will determine its prices. I read an article that people are mortgaging their homes to buy BTC.
If nothing changes, we might be looking at a sequel of the movie "The Big Short"
[+] [-] cryptodogemoon|8 years ago|reply
[0] https://news.ycombinator.com/item?id=7126153
[+] [-] mancerayder|8 years ago|reply
[+] [-] empath75|8 years ago|reply
If you want to short cryptocurrency, short tethers.
[+] [-] bufferoverflow|8 years ago|reply
[+] [-] tome|8 years ago|reply
Can you explain? What's the exchange? How do they print Bitcoin (I presume that's what you mean by "tokens")? How does that drive the price up rather than down?
[+] [-] abrkn|8 years ago|reply
- [1] http://omniexplorer.info/ask.aspx?api=getpropertytotaltokens...
- [2] https://coinmarketcap.com/
[+] [-] mancerayder|8 years ago|reply
[+] [-] zone411|8 years ago|reply
[+] [-] BLanen|8 years ago|reply
[+] [-] nerdponx|8 years ago|reply
[+] [-] pash|8 years ago|reply
0. Read the replies to this comment: https://news.ycombinator.com/item?id=15895477
[+] [-] rb808|8 years ago|reply
[+] [-] zone411|8 years ago|reply
[+] [-] switch007|8 years ago|reply
[+] [-] deepsun|8 years ago|reply
[+] [-] qubex|8 years ago|reply
Still, any time now...
[+] [-] briatx|8 years ago|reply
This means that they are not resolved with delivery of the commodity and have no direct influence on the underlying markets.
[+] [-] notyourday|8 years ago|reply
In China based on Bet365 data the most popular wager is direction of the market going i.e. up/down.
[+] [-] grandalf|8 years ago|reply
[+] [-] 0003|8 years ago|reply
[+] [-] readhn|8 years ago|reply
[+] [-] cgmg|8 years ago|reply
[+] [-] jaxondu|8 years ago|reply
[+] [-] mancerayder|8 years ago|reply
I don't see why Bloomberg journalists (or the corporation responsible for selling terminals, software, datafeeds and such) would care one way or another about the rise. Or drop.
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] 659087|8 years ago|reply