Worst Bitcoin Price Manipulation (Bitcoin Futures EXPLAINED)

last week we saw the price of bitcoin plummet as we headed toward the end of the month three months in a row we've seen that march 26 saw the close of a gigantic amount of bitcoin futures contracts and there's little doubt that this is what pressed the price of bitcoin down into the abyss now they've expired dark cloud has been lifted from above bitcoin and the heavens have opened up but here's the thing this won't be the last close of futures contracts that pushes the price of bitcoin down today we're going to be looking at the next dates you need to be paying attention to and we'll explain these futures contracts to you and why they push the price of bitcoin down let's get it bid swap is the hottest new way to trade tokens following all the top decentralized exchanges bitswap gets you the very best price and value for your trades bitswap is changing the game try it now at bitswapdex.io welcome to bitboy crypto the largest crypto channel in all the interwebs my name is ben everyday on this channel i show you how to make money in cryptocurrency if you like money and crypto then make sure to hit that subscribe button for your chance to win a full bitcoin details down below in today's video we're going to be discussing bitcoin futures what they are and why they affect the price so much but did you know that you can trade bitcoin futures on buy bit along with being able to go long or short with leverage my bid also has new features contracts so you can play with the big boys if you want to sign up for by bit you can do that at bitboycrypto.com deals or if you want to compete for 400 000 in prizes join the ongoing by bit trading competition by visiting bitboy crypto.com by bit all right so let's get going with these futures contracts first you need to understand what a futures contract is in general so according to investopedia a futurist contract is a legal agreement to buy or sell a particular commodity asset or security at a predetermined price and a specified time in the future futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange the buyer of a futures contract is taking on the obligation to buy and receive the underlying asset when the futures contract expires the seller of the futures contract is taking on the obligation to provide and deliver the underlying asset at the expiration date so in short with futures contracts a buyer and seller agree to a certain price point for an underlying asset at a given time in the future futures are part of the derivatives market a one quadrillion dollar market of ious the people who participate in these markets are broken down into two main categories hedgers and speculators the hedgers look to make money based upon securing the stability of an asset speculators look to make money based upon risk but the speculators don't always fight fair as we'll see in a bit so now let's apply all this to bitcoin and see this in action the first bitcoin futures contracts were launched by cboe started trading on december 10th of 2017 pretty much the peak of the bitcoin bull market that year and many blame these contracts and say they wrecked the entire market the peak of the bitcoin mania and euphoria institutions came in and hedged against rising bitcoin prices assuring that they would plunge to the ground this is where bitcoin futures contracts get really interesting the original bitcoin futures contracts from cboe and cme later on were settled in cash later on backed would launch their bitcoin futures contracts and those are settled in actual bitcoin these original viewers contracts were not like that so think about this institutions are betting on the price of bitcoin to go down and these contracts were getting paid off in dollars one of the greatest features of bitcoin of course is its rarity there are only 18.6 million bitcoin out there floating around there's a limited supply when institutions bet on the price of bitcoin but settles them in dollars creates what we call paper bitcoins it's the derivative version of bitcoin which is essentially an iou on paper this negates the finite supply meaning there's no limit to the number of investors who can bet on the price of bitcoin going down this is very dangerous and demonstrates how the traditional markets can come into something new and wreck it and we saw this as the first bitcoin futures contracts began open bidding at twenty thousand dollars by the time they closed a little over a month later bitcoin dropped 50 percent all the way down to ten thousand dollars so the question is what are the mechanics of motivation for the prices to drop let's get specific about bitcoin futures many investors institutional and retail alike are scared away from bitcoin due to the volatility of the price this is what prompts people to refer to it as a scam or a bubble last year we saw the price of bitcoin dropped almost 50 percent in a day during the march pandemic crash of course it bounced back and recovered but traditional investors aka old people who like to go to the hamptons or a wild weekend of wife swapping do not like that volatility i mean they could get a heart attack during the dip futures contracts with bitcoin allow them to get in the market without a lot of risk the regular bitcoin market the spot market allows investors to buy bitcoin as is today the price is 58k so they can buy it at 58k but the futures market allows them to have the option to buy bitcoin at 58 000 at a future time so if bitcoin hits 100k by the end of may these scared investors by the right to still buy a 58k bitcoin even if the price is at 100k it's kind of like a cheat code but remember these futures aren't mainly settled in bitcoin so basically all they're doing is pocketing 42 thousand dollars per futures contract that they bought and this is where the drama comes in the smartest and most deep pocket investors never lose here a couple of years ago arcane research determined that it's almost statistically impossible that the price of bitcoin randomly drops toward the end of future settlements there's a link between the price of bitcoin and futures contract settlement dates and the interesting thing is that the more bullish the price of bitcoin is leading to the settlement dates the harder the fall there are two ways these geezers manipulate the price to push it down for the settlement dates the first is to go along on actual bitcoin on the spot market then they hedge their bitcoin holdings by selling futures contracts that short the market or bet the price will go down their profit is found somewhere between their actual holdings and their short contracts a guaranteed return of a small percentage of course and make sure everybody else gets wrecked but as long as they get their hooker money i guess they're good but there's an even darker and sinister move called banging the clothes companies like goldman sachs and hsbc have actually faced legal action for this before so we know for a fact that they're doing it here's how it works right before the close of a futures contract the sketchy old money will go into the spot exchanges and push a ton of volume through to make the price go down why would they buy something and then push the price down in a few minute period ah yes because they have a gigantic short position with futures contracts they need to get settled in their favor since the cme bitcoin futures contracts are settled in dollars they can open gigantic positions on the futures markets bank of america recently said it only takes 93 million dollars in order to push price of bitcoin down one percent arcane research said the average settlement sees a drop of two percent leading to the futures expiration dates even when the price of bitcoin is bullish for the rest of the month this means for approximately 200 million dollars institutions are flooding spot exchanges to push the price down to settle their contracts so if you were wondering what we saw last week it was kind of the doomsday scenario for bitcoin in the short term the bitcoin futures contracts are generally settled on the last friday of the month while there are weekly bitcoin futures contracts the majority of the contracts are traded by month but there's another huge bitcoin futures market which are the quarterly contracts so march 26 was a double whammy not only was it the settlement of the monthly contracts but it also finished off quarter one of 2021.

Six billion dollars where the contracts expired that day and that was why we saw the price sink like a rock throughout the week and then boom as soon as the contract settled the price magically started going up again futures contracts are basically a plague to existence they're a way for traditional investors who look like mr monopoly or mr magoo to come into our playground and try to bully us the thing that's a little different about right now is that we really haven't seen these quarterly closes throughout an entire bull market but now that we've scouted our opponent we know how to defeat them the next date we should be looking at is april 30th the end of this month according to this chart by exa block the amount of users contracts expiring look gigantic but in reality it's only about a third of what we just saw the thing about these futures contracts is that each month they roll into the next month so the next big date we should really be paying attention to is june 25th the june monthly close and the quarter 2 close by the time the contracts roll into one another we will probably be looking at well north above 6 billion dollars you can bet your bottom satoshi these fuddy-duddies are going to try to push the price down so when they come to our sandbox the bit squad is going to play it smart and exit the markets while we wait for the price drop also guys if you want access to the daily x block report for the bit squad specifically check out bitboycrypto.com steels but what do you think will these traditional investors continue to push the price down at the end of each month or will we get past it at some point let me know down below in the comments that's all i got be blessed boy out [Music] you [Music]

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