The Wall St. propaganda is coming in thick now that the CME Group has begun trading in Bitcoin futures. Reuters is running a pure puff piece this morning reminding us why this is so good for Bitcoin as the price capping will now begin in earnest.
More liquidity and smoother pricing curves cannot offset the synthetic short dollar position of the underlying Bitcoin asset.
“We were waiting for the launch of the CME futures because the price is more robust and the exchange trades much larger volumes,” Jose Miguel Nascimento, head trader at cryptocurrency fund Solidus Capital, said in a telephone interview from Mexico City. “Futures are a very positive development for the bitcoin market, as it will help everyone from miners to traders hedge risk, and having a price curve will help limit price swings.”
Why does anyone think that "limiting price swings" is a good thing? And, moreover, why does anyone think that the CME Futures Market will do anything except increase volatility once the market becomes deep enough to begin wagging the dog?
We've seen this in gold where price volatilty is always, tactically, to the downside with billions of futures being dumped onto the market literally out of nowhere.
And anytime gold moves up on unexpected news, it is capped below meaningless resistance points to limit investor sentiment from turning. A robust enough bull market will overwhelm these shenanigans but expect even more 'tape-painting,' 'close-banging' and 'stop-loss raiding' than we see now.
Because now it will be dollars on the line and not Bitcoins themselves. And those can be borrowed from the Fed at 1.25% overnight.
The good news in all of this is that the Fed has to keep raising interest rates to bail out broke governments and their pension systems. But, there is still a ridiculous amount of liquidity out there sloshing around to be deployed in defense of a failing system.