I have spent most of the week reading articles about the possible impact of Bitcoin Futures, here is my take on the subject.
First of all, we need to understand that once the CME Group, the CBOE and Nasdaq enter the bitcoin game, all traditional whales are going to be converted into small golden fishes. They will take Bitcoin Trading into a whole new level where institutional entities will enter the space.
There is also a lot of interest from big players for Bitcoin to fail, one could expect that a lot of institutions will put big bucks into shorting Bitcoin. Now, on crypto exchanges, shorting is not that bad, since they need to borrow Bitcoin in order to be able to sell it, there is always a demand for Bitcoin somehow. On the future market anyone can short Bitcoin without having any.
But what worries me the most about Bitcoin being added to the futures market is that it will take away its best feature and the single most solid incentive to buy and hold bitcoin: SCARCITY.
Futures will make Bitcoin´s scarcity irrelevant. With a limited supply and an increase in demand Bitcoin can only go up really, but Bitcoin Futures will allow anyone who wants to buy Bitcoin to go to the futures market and buy a “derivate”, which is an asset that follows the price of Bitcoin but it is not Bitcoin, so when someone goes “long” on the futures market that action will not take Bitcoin out of circulation.
In the same way, people who sell will not really sell Bitcoin, that is because they don’t have any to sell, but that doesn’t matter, they can sell this “derivative” as much as they want and that selling pressure will cause a negative psychological effect that will impact Bitcoin price accross crypto exchanges.
My conclusion: Bitcoin so far has been a peaceful ocean, where everyone involved is a Hodler, a hobbyist, a developers or a philanthropists, these people are into Bitcoin because they believe it can change the world for the better. Now, the introduction of Bitcoin Futures, will bring the real "evil whales", who will short Bitcoin and do everything in their power (and they have a lot of it) to destroy it and profit from its destruction…. WAR is coming.
Source: Battlefield.com
