Two bitcoin future products have been launched since 2017, from which point investors can go short on the bitcoin rate. Many claim that this is the reason why the bitcoin price collapsed at the end of 2017, but there is now also intentional play in the game.
The price approximates real value
According to Skew Markets, futures products have ensured that the price of bitcoin approaches the true value, certainly in 2018. This may be due to products such as perpetual swap contracts, which are comparable to traditional derivatives, but have no expiry or settlement date.
Futures markets improved radically the price discovery process for bitcoin – it really kicked off in 2018 and was led by BitMEX & its perpetual swap product
The final rip to $ 20k in Q4 2017 might not have happened in the first place with a more developed futures market https://t.co/b99lxBgpwt pic.twitter.com/qm1QUtI17v
– skew (@skew_markets) October 23, 2019
Crash inevitable
The $ 20,000 crash was inevitable when two major institutional stock exchanges launched futures products at the height of the bullrun. Within a month, bitcoin rose from $ 7,500 to the highest point ever at $ 20,000.
The Commodity Futures Trading Commission (CFTC) is the American AFM, but only for derivatives markets. This government agency approved on December 1, 2017 that futures could be traded on the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE). Both products were already offered on December 18, one day after bitcoins peak.
Going short is logical
It goes without saying that most investors would go short after such a big run up. There is now talk of the US government deliberately approving those two futureproducts to make the bubble burst and end the bull run that they feel is uncontrolled.
Trump’s long arm
In conversation with Coindesk, former CFTC chairman Christopher Giancarlo says that he has burst the bubble on behalf of the Trump government.
“One of the underexposed stories of recent years is that the CFTC, the Treasury, the SEC and the director of the National Economic Council, Gary Cohn, believed that the launch of bitcoin futures could break the bubble. And it worked. “
So far, the rate has not shown the same as at the end of 2017, and it seems unlikely that growth will ever occur in such a short period of time. Should it seem that bitcoin is again experiencing such a large growth spurt, then the US government has their corrective means ready.
Is Ethereum waiting for the same fate?
It is said that future contracts at Ethereum can be launched next year. The expectation is that these have a very different impact than the bitcoinfutures. That is because ether is not nearly at its highest point.
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