This is the best article I read on the effect of futures trading.
https://www.coindesk.com/threat-bitcoin-futures/
Their perspective is the same as mine - that if nothing else were to change, it would exert a downward pressure on the price at least short term, as (1) some people that were going to invest in BTC will put their money into futures instead, and (2) the new choice of shorting creates a negative pressure directly encouraging people to sell for fear that it will drop.
So overall the futures trading may likely slow the exponential increase slightly while it kicks in and builds momentum. The effect will vary with the amount of money going into the futures market. Until the futures market is fully developed, it won't have a full effect yet. They suggest that based on what's been seen in gold, a fully developed futures market will be 10x the size of the BTC market, which is around $300 billion. That means the futures market has a shitload of growth still to be expected, some of which will siphon off the growth of BTC. This is where the potential stabilization effect comes in as some of the money that was being pumped in will now go to futures instead. So that may be at least weeks or even months that this will exert its slowing effect over.
But in addition, which they touch on too, as awareness and media and exposure builds, more people will want BTC, so the demand from average people and new investors will still go up, which will continue to exert an upward pressure on the price.
I think the next few weeks will be a good time to stock up if you have any financial reserves left to do so. Even if it keeps climbing, it would only do so likely faster without this futures situation. So now's still as good a time as any.
As for the upper possible limit of a Bitcoin, I was just was reading this article, and I'm curious your thoughts
@JeanLucBB :
At $47,400, those absurdities of the system will begin to become self evident, not just in relative asset-class value terms but also in total energy-cost terms to support the system. For example, as Zimmermann noted at the end of November,
- As a thought, experiment 21 million Bitcoins at $50,000 each would mean a total market cap of $1 trillion
- The total value of all the world’s coins and banknotes is estimated at $7.6 trillion*
- At $1275 per ounce the total value of all the world’s gold is $7.7 trillion*
- The total value of the world’s money ( Broad Money ) is est. at $90.4 trillion*
In short, once people start having to go without just for the planet to keep maintaining this most excessive and exuberant of luxury asset classes, the obvious absurdity of the creation will cause the bow to break. How that realisation comes about nobody can be sure of at this point. But the two most worrying paths come via an inflationary surge brought on by the hypothetical purchasing power imparted on the global system by all those freshly minted billionaires, or — more likely — via the liquidity constraints which will be imposed upon the rest of the system through having to accommodate bitcoin risk.
https://ftalphaville.ft.com/2017/12...when-bitcoins-market-cap-overtakes-world-gdp/
This suggests there
IS a hard upper limit to the possible value of BTC, and we're actually approaching it. To follow this math further, if each BTC reaches $350,000, the bitcoin market will be the same size as all the actual physical coins and banknotes of the world as well as the global gold supply.
Is this practical to expect? Will it level itself off naturally or will it just bust? If it levels off on its own and actually stabilizes at a high level, how will the world adapt? Does all other currency devalue to compensate?
I'm still hesitant to sell at any stage along the way, because those are the two possibilities. Either it will get there and the world will change, or it will get close and then bust. The anarchist in me says maybe the world changes. And if not, it will be a hell of a ride to the "bust" ...
One way or another the rapidly growing value of BTC will have to hit up against the realities of the current financial system. Looks like $50K is around where that reckoning begins. I don't think BTC will disappear in that fight. I think everything else will just have to bend to accommodate it.
And if it reaches $350K it will overtake gold completely. Can that be expected? What happens when an arbitrary digital currency software is worth more than gold?
At $4 million a bitcoin, it will overtake all the entire world's current money supply. Do we get there? What crashes? Bitcoin or the global economy?
Anything that slows the growth trajectory of BTC will likely be a good thing for it long term, as once it climbs above $50k the world will need to start adjusting to it. And if the world can't adjust as quickly as BTC rises, that's when you get a bubble that will at least temporarily burst.
sh*t's getting f*****g real. This is the serious phase now.
