Bitcoin Futures Plunge - Erase Premium To Spot, As Crypto-Space Crumbles

While Ethereum remains solidly higher on the day, the entire crypto space just took a notable leg lower.

The day's slide started around 9amET, when a burst of gold buying appears to have reset the correlation between XAU and BTC:

Just a few hours later, Bitcoin is back below $16,000

Litecoin - yesterday's big winner - is tumbling...

And while Ethereum is up 11% still, it is roling over...

 

Futures are underperforming spot and collapsing the arbitrage...

 

Close up, the pressure has completely erased the Bitcoin futures premium over spot...

While no immediate catalyst for the moves is obvious, we note that Interactive Brokers has allowed clients to short Bitcoin futures (with a massive $40,000 margin) and South Korea said on Wednesday it may tax capital gains from cryptocurrency trading as global regulators worried about a bubble, with Australia’s central bank chief warning of a ‘speculative mania” that has seen the digital asset making rip-roaring gains.

Comments

arkel Wed, 12/13/2017 - 13:31 Permalink

<---- Still investing / just started investing in cryptos.<---- Started selling my cryptos. It's now a bubble / Never bought since it's always been a bubble

Luc X. Ifer Billy the Poet Wed, 12/13/2017 - 15:29 Permalink

There is 0 need to panic. The reason why crypto slightly dropped is because of the FED rate increase - this made more conservative hedge seekers to switch back to the dream of the gov's ponzi. It will take time till people will get educated. Actually you just witnessed the power of the Blockchain - the crypto rocket ascension was the true reason why FED decided to increase rate.http://www.bbc.com/news/business-42344170

In reply to by Billy the Poet

Laowei Gweilo Herd Redirecti… Wed, 12/13/2017 - 15:50 Permalink

probably also related to the new South Korea ban... - banning all financial institutions from trading any cryptos - banning all non-residence from retail trading - new retail trading capital gains tax for cryptos - new reserve ratio account rules (seperate cash accouts for every single client)(source: Bloomberg this morning)so it's no wonder the future premium crashedthe Korea premium has also crashed from 30% to just 3% 

In reply to by Herd Redirecti…

DC Beastie Boy tmosley Wed, 12/13/2017 - 18:09 Permalink

Just read that a couple days ago, it’s an awesome article.

They created Tethers originally because of lack of bank funding and a way to pay back customers after the first hack. Then they saw nobody was really paying attention and created $860M worth the next two years and the rest is history. I’m certain they margin trade on their own exchange and others with the free money.

Centralized exchanges in the decentralized crypto world have always been the problem.

In reply to by tmosley

fx Cognitive Dissonance Wed, 12/13/2017 - 13:49 Permalink

Cryptos will adjust. BTC's price action is now getting quickly into the hands of the evil forces of the established financial system'. But the other cryptos are lucky because they are outside of these bastards' reach - I expect a decisive flow of money from BTC into the smaller, often more promising and technologically superior cryptocoins . It started already 3 days ago and will continue.The correction in BTC ain't over yet - and the upleg in some other cryptos has lots of further room to run.just sayin'. meanwhile, coinbase has been braking down, once again. I wonder what they did with all the millions and millions of $$ they collected  "to build their platform".... Uh, can't believe I am on the same side here as tmosley. The dark side caught me, it seems...

In reply to by Cognitive Dissonance

Citxmech fx Wed, 12/13/2017 - 14:41 Permalink

Repost:I predict folks will look back on these days like the grand ole Wild West. These exchanges remind me of an unregulated FOREX populated with a bunch of non-institutional amateur day traders (and that may not be a bad thing if you want to make some money).

In reply to by fx