It is not surprising that investors are betting on everything crypto-related with Bitcoin fans drooling over the much-awaited legitimacy for the cryptocurrency when futures debut trading. It is worth noting that Cboe Global Markets and CME Group have got the approval to offer bitcoin futures with Cboe kicking the first bitcoin futures trading by end of this week and the latter’s product launch scheduled for December 18, 2017. This way, concerns over trading of bitcoin on unregulated platforms would be curbed. However, risk from manipulation or fraud in spot market still hover over the trading. Further, many experts have expressed a worrisome opinion on the risks associated with bitcoin’s Wild West like nature that could outshine the debut.
Bitcoin lately traded at about $US15,995 on the Bitstamp exchange, up 12% in a day, and then for the first time, zoomed up past $US16,000 on Thursday US time. The price of bitcoin reaching a new high in December across exchanges worldwide and order books across exchanges continually going wild, is taking a different turn now. Bitcoin had managed to add $2,500 in one single day as seen during mid of the week and this reflected a growth of 16%, which is generally reserved for altcoins. Further, the dominance of Bitcoin rose to 61.1% with the total market cap of cryptocurrencies heading to $400 billion. On the other hand, the unbelievably surging bitcoin price is impacting capacity, as also outlaid by users complaining about the scenario. In fact, US government is keeping an eye on the rise of Bitcoin. Further, network congestion due to this rally has been estimated to have led pending transactions rising from around 50,000 to new heights of around 120,000 within a day even at the new normalized hashing rate. Overall, Futures Industry Experts and some portion of the market does look for measures to protect Bitcoin against volatility.
Nonetheless and with the much hype, various companies across different sectors including financial and mining sectors, have started jumping into blockchain and cryptocurrencies to benefit from the booming era. Looking at the scenario, countries that banned the practice to introduce bitcoin futures trading to the clients, such as South Korea, might reconsider the move.
Coming back to the Bitcoin price rise scenario, Saxo Bank has even predicted that Bitcoin might peak in 2018 and touch above $US60,000 with a market capitalisation of over $US1 trillion at the back of the Bitcoin futures contract trading in December 2017 with a big push from many investors and funds who find trading in futures a good option. However, the swinging back to the lows in 2019 has also been forecasted to follow the spectacular run of 2018 with corrections taking an edge.
It will be crucial to see the movement with the trading of the first future contracts.
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