Altcoin Daily host Austin Arnold warns that crypto markets may host some major price manipulations in the coming months.
In a new video, the crypto trader says the launch of Bitcoin micro futures (contracts for 0.1 Bitcoin) by the Chicago Mercantile Exchange (CME) in May could allow traditional market actors to influence the price of BTC without actually owning or holding it.
Arnold notes that the contracts are targeted at retail investors and provide investors with a completely legal way to manipulate the price of the flagship cryptocurrency.
“Ultimately, if the big guys can do this with what the CME contracts currently offer, that’s a good thing, because it gives little guys equal exposure to these derivatives. This is also a bad thing because it will lead to market manipulation. With CME crypto currency futures, investors / traders will not actually have to hold Bitcoin. You don’t need a digital wallet, because Bitcoin futures are financially settled, that is, they are set as fiat money and therefore do not include the actual Bitcoin exchange. ”
Arnold says CME currently only has micro futures for Bitcoin, while for Ethereum it already has normal-sized contracts that are traded at significant volume levels.
“Although there are currently only micro contracts for Bitcoin, CME has regular contracts for Ethereum. The exchange also launched Ethereum futures contracts last month, which traded around 767 each day. So whether you own Bitcoin or Ethereum, it affects you. “