SEC Paves Way for Ethereum Futures: Hooray!?

The CBOE says the path is clear for Ethereum futures. Cryptos are up on the news. History suggests something else.

ZeroHedge reports CBOE Says SEC Decision "Clears Way" For Ether Futures.

Hooray! Ethereum Futures

**What's Next?**​

Flashback December 11, 2017

On December 11, 2017, I mocked the launch of bitcoin futures in BitCoin Mania Tweets of the Day.

Here are a few of them.

Quick Get Grandma In

Mortgage the House

Whopping Premium

History Repeats

So, will it be any different this time?

I don't know, nor does anyone else. But in the past I also noted people clamoring for JDSU LEAP options. They were launched right at the top. Here's some JDSU History.

During the 1990s, JDS Uniphase stock was a high-flyer tech stock investor favorite. Its stock price doubled three times and three stock splits of 2:1 occurred roughly every 90 days during the last half of 1999 through early 2000, making millionaires of many employees who were stock option holders, and further enabling JDS Uniphase to go on an acquisition and merger binge. After the telecom downturn, JDS Uniphase announced in late July 2001 the largest (up to then) write-down of goodwill. Employment soon dropped as part of the Global Realignment Program from nearly 29,000 to approximately 5,300, many of its factories and facilities were closed around the world, and the stock price dropped from $153 per share to less than $2 per share.

The theory behind the December Bitcoin mania cheering was the big boys could get in. Hedge funds and investors and ETFs would all push Bitcoin to $100,000 if not infinity.

Something else happened.

Don't worry about that. Just get grandma in. She'll thank you. Or not.

Mike "Mish" Shedlock

Comments (13)
No. 1-13
Bam_Man
Bam_Man

It’s funny you should mention JDSU. I knew “the top was in” on the dot-com bubble when my mother (who never owned or even used a computer in her life) asked me what I thought of JDS Uniphase. That was in January, 2000.

Bam_Man
Bam_Man

Glad to say I was NOT one of the people who “took out a mortgage to buy BitCoin.” And now we have Ethereum futures. So many ways to be fleeced.....

thimk
thimk

quintessential financial alchemy

FredHayek
FredHayek

Just because the futures market has been used to control the price of every single other thing for which a futures market was created doesn't mean that holders of ethereum should be worried at all. Nooooooo. This time is . . different.

Stuki
Stuki

“Thiiiingz aaaare aaaaalwayyyyyys diiiiiiferent theeeeeeez tiiiiiiiime,” the progressives are told to chant uncritically, at anyone who questions whatever arbitrariness their “my dear leader is the bestest dear leader of all the other dear leaders” is currently telling them to pump their fists and cheer for.

MorrisWR
MorrisWR

Good old JDSU. We made a lot on those pumped up stocks in the late 90's. Qualcomm is still my best return though. I sat out this crypto frenzy. Just too old these days to speculate on the riskier bets. It is fun to watch from the wings though.

KidHorn
KidHorn

I don't understand crypto currencies. Why do they have any value at all? Aren't they just a series of bits?

JonSellers
JonSellers

Libertarians. They demand a currency that isn't controlled by the government. And something that is limited in quantity so that its value either stays the same or increases over time. And gold, for whatever reason, just isn't getting the job done. So bitcoin, ethereum, and the hundreds of others.

And here's the funny thing. In order for these things to be used as a currency, you have to settle the transactions on the blockchain. In order for that to get done, people have to use their computing and energy resources (think dollars) to make that happen in an honest way. In order to get people willing to do that, their systems will occasionally generate some bitcoins (which need to have value = trade for dollars). But if the quantity is limited, eventually that won't happen. So people won't settle transactions. And bitcoins will never again be used as a currency.

And, of interest, because it is just software, people can create as many different types of coins as they want. So there really is no quantity limits. So instead of placing your faith in the government, your placing your faith in some unknown dudes on the 'net. It all kind of makes you go hmmm.....

Carl_R
Carl_R

There is often a run up before futures are traded because people who are going to trade the futures need a position to trade against. They don't trade things naked. They take a position, then sell futures against them.

Blacklisted
Blacklisted

“So instead of placing your faith in the government, your placing your faith in some unknown dudes on the 'net.”

The lawyers, with zero economic experience, had their chance, and failed miserably. Why not give the programmers a chance? After all, they are responsible for running our electronic world. They certainly could not do any worse.

You sound like the establishment, who have been complaining about Trump’s success with N. Korea, while offering no solutions of their own, and doing nothing over the last 50 years. BTW, trust is not needed with the blockchain, as consensus is agreed upon by the validation of numerous computing nodes.

“The oldest and strongest emotion of mankind is fear, and the oldest and strongest kind of fear is fear of the unknown”, and “Mindless fear is greater than mindful fear.”

Sechel
Sechel

There's no systemic risk in bitcoin if we introduce ways to hedge it???? Risk goes away. Like magic