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Is bitcoin growing up? Regulated futures boom as investors seek a safer ride

7 Comments
By Tom Wilson

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I paid cash for a house on Bitcoin profits and still hung on to a few through the collapse. Been dollar cost averaging since about $4200, this second time around. Looking forward to another ride, though I imagine a less steep glide path up.

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The looming threat to these "e-"commodities, is their Carbon footprint.

Governments are starting to get wiser to what's going on, and... something will fall.

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The exchanges, will be the target.

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This is awesome news for a private institutional trader like me. I've been waiting for this moment because offshore crypto exchanges are subject to illiquidity at times. So the with additional liquidity provided by these regulated, reputable onshore exchange such as CME and hopefully ICE in the near future, will further stabilize cryptocurrencies liquidity especially with trade-able instrument like BTCUSD.

Multi-pool liquidity providers is crucial for institutional players who put in big chunk of sizeable volume. Retail traders don't need to worry about liquidity since they can buy/sell at any price and getting out of position with no issues pretty much 99% without virtually no price slippage.

But for an institutional trader like myself who puts in up to 8-9 figures consistently in USD denominated accounts, it's critical for me to find proper adequate sizeable liquidity to match my bids or offers depending on market fundamentals, technicals and more importantly volatility at the time of my trade executions.

Since crypto market such as Bitcoin is still fairly new, without adequate liquidity I would suffer from ridiculous price slippage that can cost me can up to hundreds of thousands if not millions in matter of seconds when you put volume into the 8-9 or more digit realm excluding trading commissions.

So these futures exchanges should address some of the issues of liquidity inadequacy. Cryptos are the future instruments for trading since digital age is progressing even further. Financial market trading arena is no exception.

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badman, congratulations to your cryptocurrency payment purchase of your home from Bitcoin profits. There will be more real estate companies that will roll out these type of payments soon as well as other big corporates eventually. It must have been a pretty speedy transaction.

By the way, I'm not sure where you keep and invest your coins but due to a lot of security issues lately i.e. hacking, I would definitely recommend splitting your eggs into multiple baskets by allocating different percentages of your account into multiple brokerage firms.

I have 3 institutional accounts at Bitstamp, Bitmex, and Kraken but soon going to be allocating it between CME and ICE when they are established. This is one of the few ways to protect your capital from hacks.

I don't invest in cryptos but managed my own money privately by trading directly to my own CQG trading platform through my customized proprietary link via custom API of those brokers. With this method I can clearly see the market depth via DOM ladder of all the aggregate orders routing through multiple pool of liquidity providers. CQG provides superb charting and smooth order execution directly to the market without having to go through market makers order book.

It also provides me various other accounts through different brokers in different financial markets with various asset classes all under in one roof that I can manage.

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The new bitcoin by FB sounds interesting.

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@badman

As for technical analysis on Bitcoin price against USD. My customized proprietary Bitcoin trading system that I developed myself (mostly 80% manual / 20% automated algo) is telling me that below 12000 is bear market territory. So for me, I will sell it with 3 multiple positions around 9800, 10400. 11700. To be exact I put limit sell order on shorting it @ 9762.99, 10453.75, and 11762 with all have stoploss @ 12000 on all my three accounts. 1st take profit is @ 5505.65, 2nd is 4651.93 and last profit target is @ 3447.13 but I'm open to changes depending on the macro fundamentals in combination of technicals as well as measured volatility.

So if price goes above 12000 USD with 2 consecutive monthly closes above it with strong momentous volume and with big fat demand bar of delta while fundamentals along technicals are aligned with it them I will wait to buy around 10000ish. It this does happen then with high probability it will test the near record highs of around high 19000s - 20000s per Bitcoin. If it breaks the record set in November 2017 with with strong conviction, then I will add more to buy around 15000s to test the psychological 50000 handle.

So the opposite, if price struggles to break the 12000 handle then the market will retest the 3000-2500 price range before going to bull market territory again. So I'll buy and long the market @ 3447.13, 3168.86 and 2919.45 with emergency stop loss of 2000. If goes below 2000 and closes below with conviction for solid couple of months and not just impulsive, inefficient withdrawal of liquidity then I'll reassess whether to buy or sell.

Just a tip for fundamentals. Keep an eye for news about the China-US trade war. If China starts losing or appears to be then big smart money players as well as wealthy tycoons will use Bitcoin as a vehicle to shift their investments someplace safe. So with high probability this will be one of the big, big deal catalyst for demand for cryptos especially with Bitcoin being the most liquid therefore shooting the price easily to recordshighs if not even more.

Don't pay attention to naysayers. Just ignore them because 99% DO NOT understand the mechanics of market liquidity as well the structure of balance of global of payments. Bitcoin is here to stay and will not go down to zero that easily. There are plenty of cryptos liquidity around the planet and impossible for the value to go down to zero since institutional players are joining in. It's not the same as the tulip mania. Liquidity mechanics in those days were totally different. There are plenty cryptos floating around the financial/capital markets trading and exchange systems now. Anyway take care of yourself.

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