The price suppression is a serious concern (of mine & many) for sure. The approval of futures ETFs is proof that wall st (and its corrupt minion, the SEC) felt a need to go to their old stand by tool they can abuse to gain some control over markets.
I believe & am hopeful the fact that BTC actually can settle when its derivatives are traded will drastically limit the power of these tools. Gold is under full control it seems because essentially no one can take delivery of vast quantities of gold that are traded in futures contracts because it is too risky, too cumbersome, and way too expensive to have this gold physically delivered.
With BTC, being a digital asset, if the market gets too skewed by futures manipulation, settlement is practical and essentially lets the 'bluff to be called', which I think will keep the market more honest.
This, in addition to the transparency and the ability for anyone/everyone to hold their own keys to self custody the asset, I think will undermine the power that can be exerted as seen in the metals markets.
Well said; instant settlement and verifiability are what makes Bitcoin different from Gold. While some manipulation can always be done, it'll be a lot less than what's possible with traditional assets, especially regarding IOUs and rehypothecation, a topic I will cover more in-depth.
Brilliant analysis. I listened to Willy on WBD this week and was thinking about this topic and if it would impact price. As a buyer, I want a fair price based on real supply and demand, any other way and bitcoin would be like gold or oil like you suggest.
As usual, this is definitely the information I'm pumped to see. I'm not sure I fully understand the new chart..UTXOracle. are we to overlay this with the price on exchanges to see if there's effect of derivatives, at the present time, by a difference in price? In other words, with using this new tool, we can see the effect of the derivatives at any current time? So, if we look at this tool and it says 30K and the price on exchanges is 29k that means that there's derivatives that are open which are affecting the spot price? Thanks
Great question! The chart already overlaps the UTXO Price (dark grey) on the average price on exchanges (orange). Prices always differ in different markets, eg, the coinbase price might be slightly different than the Binance price, this is when arbitrage happens. People try to capture the spread by an arbitrage trade, aligning the markets. I, too, was curious to see how close the UTXO Price would follow the average exchange price, but as we can see in the chart, it nearly perfectly overlaps. This is expected, as the pricing mechanism always has been the price on exchanges and nobody knew about the UTXO pricing tool. It also proves the UTXO Price is a very good pricing tool. If more people adopt the UTXO pricing tool, rather than exchanges, it can have a life of its own, and possibly be used to keep exchanges in check. Note that the UTXO tool can also be sensitive to manipulation, one can send many fake transactions to influence the tool. There’s obviously a cost to this. Nonetheless, it’s a creative and self-sovereign price discovery tool.
We’ve been trading futures curve since 2019 and honestly this idea of spot price manipulation using futures is not valid at all.
Moreover, spot these days outruns futures meaning it’s much more optimistic (funding rate holds lower all historical means. Was true during the whole last year and still is the case today)
The decrease in Liquid supply is exactly what factors this in. Available supply for trade shrinks as more supply becomes illiquid due to Hodlers who self-custody.
I’m not sure I’d characterize the gold price suppression as difficult to prove, given how many slap-on-the-wrist fines have occurred. The means, motive, and opportunity is there. The banking cartel can’t just let gold run; it’d be a nightmare for the fiat Ponzi. People might start to realize what’s really happening to their wealth.
Thanks so much for this coverage. I heard Willy on WBD and was concerned that "evil fiat-printers" could (relatively) easily print loads of $s and use it to suppress the Bitcoin price. That concerns me! I want the 2025 high (pretty much assured) and also the 2029 high (thrown into some doubt by Willy). After reading your assessment and the comments here I am somewhat reassured that Willy's concerned might well not become reality. (Willy does say: "I am just a trader", and he's a coder - i.e. he's not a finance guy by training.) Obvs we can't be 100% with our predications: but I appreciate your take here, Root (and also commenters). Thanks a ton, Malc
The price suppression is a serious concern (of mine & many) for sure. The approval of futures ETFs is proof that wall st (and its corrupt minion, the SEC) felt a need to go to their old stand by tool they can abuse to gain some control over markets.
I believe & am hopeful the fact that BTC actually can settle when its derivatives are traded will drastically limit the power of these tools. Gold is under full control it seems because essentially no one can take delivery of vast quantities of gold that are traded in futures contracts because it is too risky, too cumbersome, and way too expensive to have this gold physically delivered.
With BTC, being a digital asset, if the market gets too skewed by futures manipulation, settlement is practical and essentially lets the 'bluff to be called', which I think will keep the market more honest.
This, in addition to the transparency and the ability for anyone/everyone to hold their own keys to self custody the asset, I think will undermine the power that can be exerted as seen in the metals markets.
Well said; instant settlement and verifiability are what makes Bitcoin different from Gold. While some manipulation can always be done, it'll be a lot less than what's possible with traditional assets, especially regarding IOUs and rehypothecation, a topic I will cover more in-depth.
Brilliant analysis. I listened to Willy on WBD this week and was thinking about this topic and if it would impact price. As a buyer, I want a fair price based on real supply and demand, any other way and bitcoin would be like gold or oil like you suggest.
As usual, this is definitely the information I'm pumped to see. I'm not sure I fully understand the new chart..UTXOracle. are we to overlay this with the price on exchanges to see if there's effect of derivatives, at the present time, by a difference in price? In other words, with using this new tool, we can see the effect of the derivatives at any current time? So, if we look at this tool and it says 30K and the price on exchanges is 29k that means that there's derivatives that are open which are affecting the spot price? Thanks
Great question! The chart already overlaps the UTXO Price (dark grey) on the average price on exchanges (orange). Prices always differ in different markets, eg, the coinbase price might be slightly different than the Binance price, this is when arbitrage happens. People try to capture the spread by an arbitrage trade, aligning the markets. I, too, was curious to see how close the UTXO Price would follow the average exchange price, but as we can see in the chart, it nearly perfectly overlaps. This is expected, as the pricing mechanism always has been the price on exchanges and nobody knew about the UTXO pricing tool. It also proves the UTXO Price is a very good pricing tool. If more people adopt the UTXO pricing tool, rather than exchanges, it can have a life of its own, and possibly be used to keep exchanges in check. Note that the UTXO tool can also be sensitive to manipulation, one can send many fake transactions to influence the tool. There’s obviously a cost to this. Nonetheless, it’s a creative and self-sovereign price discovery tool.
Thank you for the answer! I will need to play around with it some but I think I understand what you are saying. Cheers!
We’ve been trading futures curve since 2019 and honestly this idea of spot price manipulation using futures is not valid at all.
Moreover, spot these days outruns futures meaning it’s much more optimistic (funding rate holds lower all historical means. Was true during the whole last year and still is the case today)
With the trend towards self custody, is there someway to factor in the additional impact of different levels (%) of self custody.
The decrease in Liquid supply is exactly what factors this in. Available supply for trade shrinks as more supply becomes illiquid due to Hodlers who self-custody.
I’m not sure I’d characterize the gold price suppression as difficult to prove, given how many slap-on-the-wrist fines have occurred. The means, motive, and opportunity is there. The banking cartel can’t just let gold run; it’d be a nightmare for the fiat Ponzi. People might start to realize what’s really happening to their wealth.
First, that’s not a proof of anything. Second, there’s clear difference between gold and btc.
Thanks so much for this coverage. I heard Willy on WBD and was concerned that "evil fiat-printers" could (relatively) easily print loads of $s and use it to suppress the Bitcoin price. That concerns me! I want the 2025 high (pretty much assured) and also the 2029 high (thrown into some doubt by Willy). After reading your assessment and the comments here I am somewhat reassured that Willy's concerned might well not become reality. (Willy does say: "I am just a trader", and he's a coder - i.e. he's not a finance guy by training.) Obvs we can't be 100% with our predications: but I appreciate your take here, Root (and also commenters). Thanks a ton, Malc