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RE: What do the introduction of Futures Products really mean for the price of Bitcoin?
I think the futures contacts will be in USD but if it is a promise to pay x amount in the future, wouldn’t you then have to buy the underlying asset to deliver at that price, thereby actually creating demand for bitcoin? I should read more and report back if I find it is something different.
You're right about how ETFs work, but that's not how futures or options contracts work. Since the futures will be settled in cash then at no point will actual BTC be involved at all.
A good analogy is if we make a bet. You bet me $100 that Bitcoin will be $20,000+ by the end of 2018. Then if it is you get $100 and if it isn't I get $100. At no point was any actual BTC bought or sold as part of our bet.
This is how I understand these futures contracts will work, so unless I went and somehow otherwise affected the BTC market to keep the price under $20k so i could win the bet the price of BTC shouldn't be affected by our bet at all.
Looks like you edited this comment which makes my reply below make no sense! Anyway I don't believe the underlying asset ever needs to be bought - you can just pay the difference in price in USD. That's what it means by the contracts will be settled in cash.
That's right. Margin calls are settled based on the closing physicals price (CBOE is basis Gemini and CME is based on index. Big moves on the physicals price will affect the margin levels required to maintain positions.
I wonder too... How is this stuff really linked to BTC market, I mean with the blockchain itself ..?