Earlier today, on December 26, bitcoin price
surged by more than 10 percent and entered the
$15,000 region for the first time this week.
The recent price surge of bitcoin follows a major
correction which occurred on December 23 and
24, which led to a sudden drop in the price of
bitcoin to $11,500. However, within less than 48
hours, bitcoin and most of the cryptocurrencies
in the market have recovered in value.
Effect of Bitcoin Futures
Trav, a bitcoin analyst, suggested that the price
of bitcoin has surged throughout the past 24
hours because of the resumption of bitcoin
futures trading on the Chicago Board Options
Exchange (Cboe) and CME, since regulated stock
markets and options exchange only operate
during the weekdays.
“Why did the market move? Futures opened
tonight. There’s a new dynamic in town.”
On Cboe and CME, the demand for bitcoin from
institutional and retail investors in the traditional
finance market has been evident, given that the
price of bitcoin on the two platforms have been
higher than that of the global average bitcoin
price. Currently, on Cboe, bitcoin is being traded
at $15,500, while the global average price
remains just short of $15,050.
Other major bitcoin markets including Japan and
South Korea have also demonstrated significant
premiums over the past few days. On Bithumb,
the world’s second largest cryptocurrency
exchange based in South Korea, bitcoin is being
traded at over $19,000, with a $4,000 premium
over the global average bitcoin price.
According to cryptocurrency market data provider
CryptoCompare, the South Korean bitcoin market
is only accountable for less than 5 percent of
the global bitcoin market. Hence, lower supply of
bitcoin in the South Korean market and
skyrocketing demand have led to the formation
of substantial premiums.
As the global bitcoin market stabilizes and
matures, premiums and arbitrage opportunities in
regions like South Korea and Japan will
dematerialize. But, in the short-term, it is likely
that the premiums in some markets will remain
high.
Previously, CCN reported that Charlie Lee, the
creator of Litecoin and former Coinbase
executive, stated that the South Korean market
is driving up the price of bitcoin because of its
high demand for the cryptocurrency.
“Ever since China banned the bitcoin
exchanges, (South) Korea has really taken up
the mantle. There is a lot of frenzy in (South)
Korea right now and I think that’s driving up
the price,” said Lee.
Even when the price of bitcoin fell to $11,500, in
South Korea, the bitcoin price did not fall below
the $15,000 mark.
As such, in consideration of the increasing
demand for bitcoin in regions like Japan and
South Korea, and from investors in the traditional
finance market, the price of bitcoin will likely
grow rapidly in the short-term.
Bitcoin Price in 2018
In 2018, several investors including billionaire
hedge fund investor Mike Novogratz, TenX
founder Julian Hosp, and Max Keiser noted that
the price of bitcoin could reach $60,000,
experiencing both minor and major corrections on
the way.
On CNBC’s Squawk Box, Hosp stated:
“I think we’re going to see bitcoin hitting the $
60,000 dollar mark, but I also think we’re
going to see bitcoin hitting the $5,000 dollar
mark.