The SEC in the US is reviewing the ETF for bitcoin. This time it will most likely be accepted. Then, full bore market rigging on bitcoin. Wall Street will be able to naked short bitcoin without any bitcoin actually being within their personal possession.
When the ETF passes, that will be the worst day for bitcoin. :(
People are waking up to how corrupt the debt markets are. They will gravitate to just owning the bitcoin outright instead of taking on unneeded counterparty risk.
I haven't heard of naked shorting before. Can you go into a little more detail please?
I've been looking forward to an ETF approval, hoping I can move some of my superannuation (Australian mandatory retirement savings) into bitcoin.
This is the first I've heard of a potential downside.
I'd recommend a bit of reading on silver/gold price manipulation. Zero price discovery. ETF would be the beginning of the end for freemarket BTC pricing. Unless... we the people can grow the market cap so big the banksters can't corner it. Battle of the titans!
Sorry, I forgot to provide another link with regards to short selling. This is from Fidelity:
https://www.fidelity.com/learning-center/investment-products/etf/selling-short-etfs
I'm across regular short selling. (Shorting bitcoin would be stupid), but how theoretically would a naked short of a bitcoin ETF look?
Hi @mattclarke
I'm not a trader on Wall Street but I understand the logic behind it. What I would do is 'short' a massive amount of theoretical bitcoin knowing it would cause a panic and price drop in the REAL bitcoin market. Then, I could enter into the market (or another firm I've buddied with) and BTFD. The price would eventually correct (probably upwards) and bingo! Mass profit.
Here is a quote from another link (sorry to share links but better than you taking my word for it):
https://www.thestreet.com/story/10292209/1/ask-thestreet-naked-shorts.html
I like bitcoin the way it is. No market rigging games (except for perhaps some exchanges). You can only sell or buy bitcoin that actually exists. It's called the free market.
But shorting is still a contract. (to provide n of A on a given date, in exchange for n of B right now) Who's the other party?
Or is that where the 'naked' bit comes in?
Basically, it allows an entity to sell a security (i.e bitcoin) without actually owning it directly. Best way to describe it to you is provide you a link:
http://www.investopedia.com/articles/optioninvestor/09/naked-short-selling.asp