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RE: And just like that, the Derivatives Market is opening up to Bitcoin
@maven360 I agree with you. This news are bullish for the price of Bitcoin in the short/medium time-frame. But, I do not believe that the introduction of derivatives is compatible with Bitcoins goals of decentralization. Derivatives will grant a central authority the means to satisfy demand with paper derivatives at unknown backing ratios.
@tutial True. Derivatives will place liquidity into the wrong places from a value perspective. However, distributed ledger tech has the potential to completely rewrite our current understanding of derivatives in the process.
So while CBOE/COMEX type derivatives will be self-serving, blockchain has the capability of offering futures on any time increment (1 millisecond - 100 years) with self-policing smart contracts that don't require a central authority. I won't pretend to know exactly how this will look, but the prospect is a positive one in my book!
Also, if market makers decide to over-manipulate a particular crypto, who is to say a different crypto will not emerge that does not allow futures trading? In effect, said crypto will likely become the new "decentralized" crypto that is immune to manipulation.
One approach to the coming flood of futures trading is to simply place "stink bids" in the market surrounding options expiration dates and let the max pain volatility be your best friend.
Still too early in the game to determine. Ball is now in the court of the SEC and figures like Jamie Dimon. We will see what the minions have to say!