Shouldn’t a futures market ultimately reduce volatility by enabling (synthetic) short selling?
Last time I checked they would only pull the price once a day. Not sure how much that would actually help
The futures market will do the rest. Only settlement is once a day. But as the bitcoin price moves (which indicates that the settlement price that evening will be different), actors will buy and sell which should bring the futures market in line with the bitcoin price. So in the end you'll end up with a pretty close mirror. You only need 1-2 algo traders for that.
Curious if you have any source links for banks pulling out. It seems like smart risk management to back off supporting a BTC futures contract right now.