Last week I had a rather interesting dialogue with a professional stock market trader who is now actively trading in the cryptocurrency market. I will briefly describe the main points that interested me:
“Since the advent of Bitcoin futures, primarily on the CME, large funds have a legal opportunity to enter the cryptocurrency market and start making money on it. These futures actually appeared at the time of the peak of the cryptocurrency cost. Naturally, major players in other markets do not want to go on a peak, so they are now “shorts up” Bitcoin and working on the information space to create panic in the market. A fund in 100 billion dollars does not cost anything to allocate 1 billion dollars to play for a fall and also 100 million to create a negative information space for Bitcoin. That is why a large number of fake news began to appear on the market. Interestingly, these fake news stopped when the price of Bitcoin dropped below 6500 $ »
This analyst appeals to the CME exchange, because this exchange is much larger than the CBOE. And it is on it that the largest funds trade.
Very similar to the script of any of the series of the series Billions ?!
But is this really the case?
I decided not to take my word for it, but to check how firm the ground was under the feet of this theory.
Everyone appeals only at the cost of Bitcoin
Let's first turn to the essence of the futures. Initially, futures were created to protect themselves from the volatility of the commodity market - the grain market for example. When you enter into a grain supply contract with a farmer in March, you appeal with current prices, since You realize that crop failure may happen this summer and prices will soar. You want to insure against this and negotiate with the farmer that you will buy grain from him in September at current (March) prices.
Then these contracts became a purely speculative product. In fact, when you buy a futures contract for a barrel of oil, you do not expect at all that in a month this barrel of oil will be delivered to your home. You enter into an agreement with the other party for a given price. For example, now a barrel costs $70, you bet on what it will grow and buy futures. When the futures expires, the person who sold it to you buys the futures at current market prices. Those. if you bought it when the barrel cost $70, and by the time the futures expires, the barrel costs $80 - you've done well, you've earned on the difference in the exchange rate. If your forecast is not justified, you lose money.
Notice that the oil itself does not appear anywhere here. Futures appeals only its price. Similarly, there are futures on Bitcoin. No one on the CME will buy bitcoins themselves. All appeal only to its price. Bitcoin itself is not involved in these transactions (this is an important point to which we will return later).
Now let's talk a little about how the price is determined on the exchanges. If we discard the particular, then it is a banal law of supply and demand. The higher the demand and the lower the supply, the higher the cost. The cost of Bitcoin at coinmarketcap.com is determined by the average weighted price of Bitkion on the exchanges (hereinafter I will use Bitcoin cost on coinmarketcap.com as an indicator, forgive me against the opponents of this site). In order to influence the cost on CMC (coinmarketcap.com), it is necessary to influence the value on the exchanges, where it takes the SMS data. In order to influence the price on the stock exchanges, it is necessary to shift the balance towards demand or towards supply.
We return to the fact that Bitcoin itself does not participate in futures transactions. Thus, none of the participants in futures contracts go to the exchanges (for example, Binance) and do not start frantically buying / selling Bitcoins to fulfill their futures obligations. Thus, futures owners, in general, and participants of the CME exchange, in particular, do not directly affect the value of Bitcoin on cryptocurrency exchanges and on SMS.
But is it possible that futures indirectly influence the value of Bitcoin? For example, it is possible to play for a lowering of the futures in order to create a panic and thereby lower the cost of Bitcoin itself.
To test this hypothesis, I looked at the statistics of Bitcoin futures trading on CME for a little more than a month (this is the maximum depth of historical data I managed to get).
The peak of trading fell on April 6, when turnover amounted to 4621 futures. 1 Futures = 5 Bitcoins. Those. The turnover of CME on that day was 23 105 Bitkions. On the same day, the turnover on cryptobirds was about 567 thousand Bitcoins (according to SMS). Those. the turnover of the exchange CME is comparable to 4% of the turnover of cryptobirth I do not think that such a trading volume of the exchange CME can create a critical mass for changing the mood of cryptobirds players.
But let's look at how Bitcoin futures traded on the CME. Below is a comparison of the value of Bitcoin on SMS and the value of Bitcoin for CME futures:
The cost was taken as the cost of Bitcoin at the time of conditional closure - 23: 59: 59 in Chicago, when in Moscow at that moment was 07: 59: 59 the next day. Data from SMS manually, so they may differ by +/- 10 $.
As you can see, futures follow the dynamics of cryptobirge (which is logical), and not vice versa. The average deviation between prices - 0,39% in a big way for futures.
Thus, I still do not see a significant influence of large players on the cryptocurrency market. There are, however, two more possibilities of influence:
1. Information field that can be created on the money of large funds.
2. If some funds secretly play on cryptobirds - but then they do nothing (except for the size of the capital) differ from other market participants.
But these two possibilities are more conspiracy. Direct evidence of this, I have not yet found. If you know about them and / or have found any inaccuracy / error - write to me, I will be happy to add my review.