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The Effect of Futures on Tulipmania and Bitcoin

eric_han
Jul 9th, 2018 (edited)
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  1. The Effect of Futures on Tulipmania and Bitcoin
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  3. The effect of the advent of futures on Tulipmania was to accelerate the rise in the price of tulips. Why did futures have the opposite effect on Bitcoin? I wonder if it has to do with the alleviation of the need for physical transfer of the asset soon after ‌the trade.
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  5. Before tulip futures, a pessimistic tulip speculator had no way to bet on a future decline in tulip prices. Whereas an optimistic tulip speculator could bet on a future rise in tulip prices by holding a tulip bulb.
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  7. Tulip futures let a pessimistic tulip speculator bet on a future decline. Tulip futures made the impossible possible. But tulip futures also let an optimistic tulip speculator bet on a future rise without transferring a tulip bulb. Tulip futures made the possible easier.
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  9. Bitcoin futures let a pessimistic tulip speculator bet on a future decline. Bitcoin futures made the impossible possible. But there was never physical Bitcoin. Bitcoin was always virtual. Bitcoin futures did not make the possible much easier for the optimistic Bitcoin speculator.
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  13. The advent of bitcoin futures sparked the selloff from $20,000, says San Francisco Fed
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  15. https://bitly.com/2HZZTzd
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