/biz/ - Business & Finance

>>11205876
>god damn trump is just guaranteed RED for the day
>Dow, S&P, and the 'DAQ are all green

what did he mean by this?

>brk-b mooning in premarket

wut?

>>4437509

I thought I’d share some of my stock market knowledge to help my fellow HODLers get a perspective on the CME futures that will be launching soon.

First let me explain a bit of history: in 1982 CME group launched futures on the S&P500.

What happened next? The stock market went on a spectacular run for 5 years until it eventually crashed in 1987.

Why does this matter for Bitcoin? Because I believe a similar story is about to unfold. This story is the fundamental story about adding leverage to a new underlying asset.

Bitcoin is a relatively “unleveraged” asset as compared to other financial assets. It’s new, it’s untainted. This is significant because of the mechanics of market prices and the future potential of market prices.

When something enters a levering stage, like Bitcoin is about to, the mechanics of the market are HEAVILY weighted to the buy side and not the sell side. Why? Because to be a seller you MUST be a previous buyer (or if you’re shorting, the supply comes from a previous buyer). This may sound weird, but the potential capacity to sell is a function of those who previously bought. This is why in an early market like Bitcoin it’s very hard for it to consistently fall as there’s not a lot of buyers yet built into the price. It takes years and years of accumulation and volatility to create a normalized market. When it’s new, especially pre leverage, it’s very easy to bid it up.

When the CME futures are added, it will likely lead to spectacular rallies, but you need to arm yourself with the knowledge that the eventual buying will plant the seeds of the future capacity to panic.

This is what happened in 1987: The stock market had a 3 day wipeout of over 22%. It took 5 years to develop the buy side enough to create the conditions for panic. This was caused by the CME futures in 1982.

1/3

>>4223138
>it's always cold
>wouldn't that also mean its always warm