Bitcoin (BTC) educator Andreas Antonopoulos says that while futures markets may indeed place a damper on the cryptocurrency’s price, the stakes are different to what you might think.

In a Nov. 27 interview with YouTuber “Ivan on Tech,” Antonopoulos argued against the grain of commonplace fears about the adverse price impact that Bitcoin futures trading has on spot prices.

He suggested it’s the speculators — not the HODLers — who truly have something to fear.

It’s not conspiracy: “it’s the Treasury’s job”

Cash-settled Bitcoin futures — which have been trading since December 2017 on both the Chicago Mercantile Exchange (CME) and Chicago Board of Exchange (CBOE) — have consistently drawn suspicion from traders and analysts, with many contending that Bitcoin’s price is vulnerable to manipulation in advance of contract settlements.

Antonopolous started the discussion by conceding these fears are likely true, “We know for a fact that when the Bitcoin bubble started to go up really fast in 2017, the U.S. Treasury decided to fast-track the deployments of futures markets in order to stop that bubble.

A lot of people see that as conspiracy, but if you look at the mandate of institutions like the Treasury, that’s actually their job.”

Price suppression, he claimed, is not a matter of conspiracy, it’s a market-based approach to enable those who don’t believe in cryptocurrencies to take a contrarian position by shorting.

This has, of course, put a damper on the price, he said — but it’s also reduced volatility.

A market comprised purely of positive believers — or at least those willing to hold the coin itself — is going to be very “one-sided,” he noted. “It’s not really a market with full liquidity on both sides of the order board.”

Ironically, naysayers who had once decried volatility are now decrying futures “manipulation,” he quipped.

Unlimited risk

Importantly, Antonopoulos said, futures critics often overlook the real stakes of cash-settled cryptocurrency shorting.

There’s something “really dangerous about doing cash-settled naked shorts against a cryptocurrency,” for when you borrow Bitcoin as part of a short, your liability — your potential risk — is unlimited:

“If they [institutional investors] faced a situation of a renewed Bitcoin bubble and they continued to take a contrarian position against the market, they’d be throwing fiat into a black hole.”

As reported, Intercontinental Exchange (ICE)’s Bakkt platform has recently confirmed its forthcoming launch of a cash-settled Bitcoin (BTC) futures contract.

The new product will be settled against data from Bakkt’s existing physically-delivered Bakkt Bitcoin (USD) Monthly Futures contract — a pioneering product that was the first to give futures traders direct exposure to the underlying cryptocurrency.