Late in December 2017, Wall Street stuck its hand into the blockchain revolution. A revolution is something that happens when economic prosperity becomes much too lopsided. Status quo players are placing their hands on this movement to co-opt it, or at least slow it down to make it orderly while maintaining some control. The problem with this is that once a closed system becomes too complex, it collapses, leading to something new. Our economic system has become just that, something more like entropy, rather than an efficient, self-inclusive system. All the bells (high-frequency algorithmic trading machines) and whistles (easy monetary policy and COMEX futures) can’t keep an orderly transition together forever. This is where geopolitical tensions arise, nationalist movements ensue, and adoption of new technology happens.
The Chicago Mercantile Exchange introduced Bitcoin futures in December to slow the entropic system down from changing to the new order. It can be slowed, but not averted. Evidence suggests that since futures were launched, Bitcoin’s price has fallen. Similarly, the last several times a new commodity was added, Wall Street did the same thing. The same game is happening right in front of our eyes as the smart money hedges their Bitcoin holdings with Bitcoin futures. Big money buys puts on Bitcoin futures, and then the settlement date comes in the way of a price correction. They sell Bitcoin futures for profit while holding Bitcoin physically. This is how gold was co-opted decades ago. In past articles, I described the relationship between the bullion banks, central banks, and government agencies rigging the gold price. These past articles included declassified memos from the CIA describing this whole situation. In this case, the differences are that there are many more exchanges and this commodity is priced globally. It is definitely concerning to see, but will Wall Street be able to keep up with all the different blockchains coming out? How are they going to rig something that is settled in cash? The January 26, 2018 Bitcoin futures contract settled rather flat, as the volume was not as high as expected. Is it any coincidence that leaders were bashing Bitcoin on the options’ expiration day? Is it any coincidence that rumors of crackdowns happen every single week that options are expiring?
Adena Friedman mentioned that Nasdaq is looking to add cryptocurrency futures contracts. It looks like Bitcoin is not the only one that is in Wall Street’s crosshairs. If Ethereum or any of the top 20 are added, what will happen to the price? My initial assumption is that this entire space will continue to rise with the stock market. As long as the central banks of the world continue to inflate the bubbles around us, cryptos will follow. Market manipulation occurs in every single market on Earth, and cryptos are not alone. Futures will allow some sort of manipulation, but they will not end the space as we know it. Propaganda spewing from media outlets to intentionally hurt digital asset prices will occur during weeks that options expire, just like clockwork.