Skip to content

Bitcoin Futures: a way to control cryptocurrency markets?

--Advertisements --

Get trading recommendations and read the analysis on for only $ 39 a month

Can Wall Street Investors Handle Cryptocurrency Markets Through Futures? Bitcoin? On the basis of the recent market downturn during the week of January 15th, it seems that "yes" is the answer to this question.

During the market crisis last week, there were some jokes about Reddit that the crash was going to end on Wednesday, January 17th at 4:00 pm, at which time the markets were closing the first Bitcoin futures on the CBOE expired at $ 10,900 per bitcoin. There was even a countdown posted by a Reddit user. While the price of Bitcoin did not restart in the immediate future, the altcoins began to bounce back hours after the expiry of the futures contracts.

Strategy for the future

Many institutional investors have an interest in using forward contracts to lower the Bitcoin price to a lower level by setting stop-loss triggers at support levels to further lower the price and make it look like a crash. This scares novice investors to support bears and sell them to avoid a total loss. By adopting this strategy, Wall Street investors strategically lower the price to return to much lower levels and potentially put Bitcoin in place for another rocket to unprecedented heights. Then, assuming, collect profits and repeat the cycle, increasing profits every time Bitcoin goes up and down.

United: We all fall together and we rise together

Interestingly, the cryptocurrency market seems to rise and fall simultaneously with altcoins. Does a systemic problem cause this harmonious rise and fall of prices on the stock markets? The answer is a little blurry, but there are several factors involved. Most exchanges use Bitcoin as a universal currency, which leads many investors to buy and sell bitcoins to buy and sell altcoins. . When bitcoin starts a bullish run, most altcoins fall because investors jump on the Bitcoin train and vice versa. It is also systemic because most exchanges require bitcoin rather than currency to process. It is easy to invest fiduciary money in the market and then let an investor negotiate it; move it from one currency to another and do not cash it to the fiduciary currency. In addition, when the Bitcoin price falls or increases relative to the fiat currency, all altcoins will usually follow. This is because all prices are based on their Bitcoin exchange rate, not their fiat exchange rate. The value of an altcoin in fiat currency is the value of the altcoin in Bitcoin and then the value of Bitcoin in that currency fiat. It's Bitcoin that strongly affects prices.

See also  Review of 2017: The Year Cryptocurrencies Seized the Projector Mainstream

With much of the Bitcoin-related market, it's easy for Bitcoin futures to manipulate the entire cryptocurrency market because the value of altcoins is not the value of altcoins compared to the bitcoin value. .

-- Advertisements --

The next decisive test will take place this Friday, January 26 when Chicago Mercantile Exchange (CME) futures on Bitcoin will expire. Given that the cryptocurrency market is recovering, it is likely that the contracts could continue the uptrend or not.

Image from Shutterstock to photo

Follow us on Telegram.