Bitcoin has always been a rollercoaster ride and this weekend has been no different. Bitcoin prices declined massively this weekend probably as a result of traders looking to lock in profits before XBT futures come online.
Bitcoin's price retreated sharply on Sunday where the king of all cryptos saw a low of $13,474. BTC/USD then made a move to consolidate at $13,662 amounting to a loss of $1,931, or 12.4%.
This cliff drop resulted in tens of billions of dollars off bitcoin’s market cap. BTC's last valuation put it at roughly $227 billion.
The declines followed another streak of record-setting gains for global cryptos that was largely driven by bitcoin. The world’s most expensive cryptocurrency has been riding high on news that CBOE will launch its bitcoin futures contract (XBT) a full eight days before rival CME Group.
News of forks and massive integrations of broader financial markets are commonly cause for loading BTC and often result in dramatic increases in price.
XBT is a cash-settled futures contract based on the Winklevoss brothers’ Gemini auctions price. The contract will begin trading 6:00 p.m. ET Sunday on the CBOE Futures Exchange.
I read somewhere recently that one of the Winklevoss brothers just recently became a Bitcoin billionaire. Not surprising considering their fondness for the original crypto asset.
There’s no way to know for sure how Wall Street will treat the new derivatives contract. On Friday, the Futures Industry Association (FIA) issued a stern statement to the Commodity Futures Trading Commission (CFTC) that its members were concerned about the derivatives contract. In an open letter, the lobby group said XBT “did not allow for proper public transparency and input.”
This will make BTC a lot more difficult to predict as people line up on both sides to essentially bet on which direction the price valuation will go. You better believe that this will influence traders as they look to buy or sell Bitcoin.
Overall we are seeing a very interesting merger between traditional financial markets and crypto markets. There's no telling where we go for here but it is sure to be a bumpy ride as it has done up until this point in crypto.
What do you guys expect will happen to the price of BTC when these futures come online? Should we expect a lot more volatility or will this offer some stabilization of the broader market in general?
Please leave thoughts and comments below.
Source:
Bitcoin Plunges $2,000 on Eve of Futures Contract - Hacked
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