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(+) Bitcoin plunges $ 2,000 on the eve of the futures contract

The long-awaited bitcoin futures contract officially kicked off on CBOE Global Markets on Sunday, causing BTC / USD to rise sharply. Trade volume would have been low as the CBOE website crashed immediately after the contract came into effect.

XBT becomes operational

CBOE's futures contract, traded under the symbol XBT, entered into service at 18:00. AND. In just a few minutes, bitcoin prices jumped by more than $ 1,000, a sign that institutional money was pouring into the market. The BTC / USD exchange rate peaked at $ 15,811 before losing gains later in the session. XBT's traded at $ 16,000 shortly after the contract came into effect, which gave it a premium over the cash price.

At the time of going to press, BTC / USD was trading at $ 15,248, where it was little changed from the previous close.

The total market capitalization of Bitcoin is $ 260 billion. According to CoinMarketCap, trading volumes over the past 24 hours have exceeded $ 13.5 billion. South Korean trading houses generated a large part of the daily turnover, with Bithumb accounting for about 16.5% of transactions. That equates to about $ 2.2 billion.

The Bitfinex exchange returned 12% of total bitcoin transactions, which equates to $ 1.6 billion, according to the data. The Coinbase GDAX exchange saw 6% of the volumes, or about 823 million dollars. GDAX had technical difficulties last week as bitcoin prices surpassed $ 19,000.

Although the volume of trading on the stock markets was robust, liquidity in the futures market was relatively thin.

Highly speculative instrument

It has been argued that futures on bitcoins represent one of the highest forms of speculation in recent history, since they are settled in cash and are not in the same position. have no delivery requirement. This point was raised by Randy Mitterling in Twitter of all places in response to Nassim Nicholas Taleb, the world-renowned essayist, scholar and former trader. Mitterling, who is the Senior Investment Advisor, said:

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"Bitcoin futures are settled in cash – no delivery requirement – it's just an indicator of sentiment that could be completely wrong in relation to the real price." Really the highest form of speculation ever created. "

Taleb, himself a brilliant writer and theoretician of probabilities, had provided a series of insightful tweets about bitcoin in general and the new futures contract in particular. In a Sunday message, Taleb stated the following:

"Note that Bitcoin has a limited number of natural sellers.The whole concept is very concave (it costs more and more to extract) .The number of producers decreases over time."

In a previous tweet, Taleb also said:

"No, there is NO way to properly bypass the" bitcoin bubble. "Any strategy that does not involve options is nonergonomic (subject to blowup). we can not exclude 5K, then 10K, we can not exclude 100K. "

The arrival of future bitcoin probably increases the focus on other forms of institutional investment involving cryptocurrency. Some analysts speculate that bitcoin exchange traded funds (ETFs) are the next logical step for a market to become more and more comfortable with the idea of ​​cryptocurrency.

CBOE chief Edward Tilly recently told CoinDesk that the case of an ETF linked to a bitcoin is stronger now that futures trading is underway. As such, CBOE may be ready to submit a new proposal to the Securities and Exchange Commission (SEC) to allow ETF bitcoins and exchange-traded notes (ETNs) to be traded.

Tyler and Cameron Winklevoss failed to launch their bitcoin ETFs earlier this year after the SEC rejected their proposal on the grounds that the Bats exchange would be unable to enter the surveillance sharing agreements required.

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A bitcoin ETF would allow investors to buy and sell the asset class roughly like a stock market transaction. For many, it is considered a precursor to the global non-global consumer adoption. 1 digital currency.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrenc ies. He holds investment positions in the coins, but does not perform any short-term or day trading.

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