This Week in Futures Options 83: How the Bitcoin Has Fallen

Dec 26, 2017

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Topics this week include:

Bitcoin
Crude Oil
Gold
Winners - RBOB, Platinum
Losers - Feeder Cattle, Oats

Futures Options Feedback: Listeners have their say

Comment from TinySpec - @Options @QuikStrike1 @CMEGroup "Donald Trump might be long bitcoin! "?!?!?!?!?
Question from MarkClydeBrant1 - Should CL be priced in BTC value of GC to strip out USD risk?...Can't wait to see the COT reports on BTC Commercial Shorts: BANKS.
Comment from Ezpreso - Good bit on gold v #bitcoin from CME - openmarkets.cmegroup.com/12749/bitcoin-gold-growth-comparison
Comment from Bilc - Good job on the show Nick! Mark left the show in good hands. He can take vacations more often.
Question from LV67: Why is futures and FO data so hard to get?
Question from Camper: Do you notice any interesting patterns in corn volatility skew ahead of crop planting or harvesting?
Question from Tim Haver: What's the cost for the premium version of quikstrike? I like the free stuff that I play with during the show and I'm thinking about taking the plunge.
Question from NOZ3T: Is it possible to hedge some of these aggregate commodity ETFs with puts in their underlying itself - so hedge USO with WTI puts, Corn with corn puts - you get the idea?
Question from NOMNOM: I was excited about #bitcoin but this is giving me pause.

From the article: About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. (Brown is a contributor to the Bloomberg Prophets online column.) What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.

Because bitcoin is a digital currency and not a security, he says, there's no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes.

Other investors say the whales won't dump their holdings, because they have faith in the long-term potential of the coins. "I believe that it's common sense that these whales that own so much bitcoin and bitcoin cash, they don't want to destroy either one," says Sebastian Kinsman, who lives in Prague and trades coins. But as prices go through the roof, that calculation might change.