[gtcode]

Bitcoin topped out as soon as the futures went live. Massive contango on a regulated futures market may have been a factor in "reeling in" price. The spot market is so thin that it didn't seem to take much open interest in the futs to whip the underlying.

It's conceivable that some spot exchanges are or were still from 2017 to now, either malicious and/or incompetent, which would facilitate the continuation of such behavior, likely by more players than one or two.

[sklut]

On contango: I would not call what the futures market is experiencing "massive" contango. There is a very slight premium to further dated futures ($35/btc Feb over Jan, and $5 Mar over Feb contracts on CME), but this is very normal for a commodity and logically in place for exchange/spot holding risk. I would call the average settlements over the past month of futures being listed very normal contango. And I don't think the contango itself had anything to do with "reeling in" price. The futures finally being listed perhaps.

"The spot market is so thin" I also think is incorrect. GDAX is normally 0.01 USD wide (albeit for small amounts) and often-times under $1 wide for many BTC. I would call the spot market very thick, if anything. You can get off what appears to be very large amounts of BTC with minimal slippage most times of the day.

"didn't seem to take much open interest in the futs to whip the underlying" -- are you saying a futures move would lead the market? I respectfully disagree. All the entities I know price futs from spot and are generally putting on the arb in this order, not the other way around.

[runeks]

> You can get off what appears to be very large amounts of BTC with minimal slippage most times of the day.

I wrote a script[1] that pulls down the public order books for Bitstamp, GDAX and Bitfinex, because I was interested in seeing the depth of the BTCUSD market, and right now you can offload:

258, 301 and 325 BTC on GDAX, Bitfinex and Bitstamp, respectively (total: 884 BTC), at 1% slippage for 3,544,921, 4,152,783 and 4,452,134 USD, respectively (total: $12.1m).

[1] https://github.com/runeksvendsen/orderbook

[hendzen]

Those market depth numbers are probably thinner than they seem, there is no regulation of spoofing/layering and it would be instructive to look at the cancellation rate of passive orders originally placed deep in the book when market price subsequently approaches the resting limit price.

Of course if you want to move larger amounts there are specialized OTC markets that handle large block trades, e.g. Cumberland Mining. Of course the lit exchanges are important for price discovery.

It would be interesting to compare the BTC market depth as a percentage of market value to other exchange traded assets.

[gtcode]

No, just suggesting the arb opportunity existing at all helped reel in price. I believe this was the intention.

Sounds reasonable, thanks for clarifying and correcting.

[ve55]

I would be skeptical of strong claims about how Bitcoin futures have affected its price significantly so quickly, mainly because their volume is very low when compared to Bitcoin exchanges and even other unregulated futures (such as Bitmex's future contracts, which have been around for much longer than CME and others have).

It makes sense the price has stabilized recently due to how strong the recent bull market was, it will likely need some time to relax and consolidate before it decides what direction to push next.

[oil7abibi]

Perhaps, but bitcoin futures are advertised like crazy on the the futures exchange, but volume is completely minuscule compared to other commodities (and crypto exchanges for that matter).

[usrusr]

I'd expect traditional future buyers (if that is the correct term?) to be much less likely to be swayed by advertisement than the new market segments that could be attracted with bitcoin futures. Kind of logical to focus advertisement activity on the latter group.

[icelancer]

Yeah, the futures markets seriously reduced volatility and kept the price within a narrow band around $14k. I'm quite pleased by this, actually.

[sillysaurus3]

If you think this state of affairs is going to continue, I have a bridge to sell you. :)

[icelancer]

Too late, I already own several metaphorical bridges (mining equipment).

[dajohnson89]

since the futures are cash settled, is it really possible for there to be such a tight correlation?

also, I surmise that a major factor in the correction we've witnessed in the past month or so has been the congested mempool (high fees and slow tx times).

[gtcode]

Yes, the futures price settles daily based on the reference rate. Eventually such correlations become more efficient once you have a real market. (As another poster pointed out it's still thin).