A Look At ZCash Futures Before The Big Launch
It’s been thrilling to watch the excitement surrounding the launch of the Zcash token. Things really got moving when Bitmex began offering trading on a December expiration futures contract (symbol: ZECZ16). I don’t think I’ve ever come across a futures contract on a coin that hasn’t even launched yet.
Which brings up a tiny issue, how does Bitmex plan to settle a contract that has no supply? From the BitMEX blog:
Basically, what this is saying is that they acknowledge the speculative nature of offering a contract with no immediate reference with how to mark to market. The plan is to choose an exchange by December 1st. Pretty confident no? But what if there is not a high quality exchange by the contract settlement date?(last Friday of the month)
This is where it gets good. The last line there is saying that if there is no suitable exchange from which to mark to market the price that will be used is $15.24 USD. So think about that. BitMEX is pretty much guaranteeing that the price of ZEC will be at least $15.24 in December. Again, pretty confident.
This explains why trading on this contract started trading at 25410 satoshi, that was about $15 at the time. But things really blew up from there. As you can see from the chart, as of the time I’m writing this the price of one contract equal to 1 ZEC is 208300 satoshi or about $137 USD. WTF? No, that’s not a typo-- 900% increase.
Because supply will be virtually nonexistent when this coin launches next week, I expect that the price will hold temporarily and may even rise. But beware. At some point fundamentals will have to figure into the analysis, what on earth could justify such a high price for a brand new coin? Which begs the question, how do you short this market? The only way I can see at this point would be to sell short the futures. Be very, very careful with this coin. I can see many plausible scenarios where a trader could get burned on both sides of the trade.
** For more in depth information on ZCash @juansgalt takes a deep dive into the tech on the companion piece here:
https://steemit.com/blockchain/@juansgalt/zcash-futures-at-2-2-billion-market-cap-is-it-s-technology-that-good-report
Also please check out my conversation with @juansgalt on ZCash and the Bitcoin Hardfork here:
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Solid blog. I was about to start a similair discussion. The price of a coin should depend on the quality of the product, the team behind it, if proffesional investors believe in it, and a lot more facets. Does anyone know about: https://www.coincheckup.com Supposingly they researched every crypto coin in the scene based on: the team, the product, advisors, community, the business and the business model. They even score the coins stengths. Go to: https://www.coincheckup.com/coins/Zcash#analysis To check Zcash Report
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