Futures traders predict bitcoin price rise will rapidly slow
UPDATED 23:00 EST . 11 DECEMBER 2017
Investors te bitcoin futures launched on the Cboe Global Markets exchange Sunday are predicting that growth ter the price of the cryptocurrency will rapidly slow te the coming months, ending an unprecedented bull run that has seen the price of bitcoin increase by 1,600 procent since the beginning of the year.
The freshly launched XBT futures contracts are tradable legal agreements that entitle its holder to buy or sell bitcoin at a set price ter the future. They presently come ter three forms: one-month, two-month and three-month options. The price at which the future is traded is meant to reflect the price the market believes bitcoin will be one, two and three months from the point the contract is issued.
Spil of Ten:30 p.m. EST, those contracts are presently being traded at $17,760, $Eighteen,141 and $Legitimate,080, respectively. However, all three future options varied te price across Monday, reflecting both the ongoing price volatility te bitcoin itself and institutional investors attempting to price the futures ter a fresh market.
By comparison, bitcoin is presently trading at $16,477.61. But it had kasstuk highs of $17,370.21 ter trading earlier te the day. If the futures market accurately predicts where the price of bitcoin is heading, that means ter ordinary terms that bitcoin will only increase from its current price by around $1,600 by February, with the price remaining vapid ter March.
The unknown te the equation is whether those prices accurately reflect where bitcoin is heading. Given that less than a month ago experts were cautious ter even predicting bitcoin would reach $14,000, they may not.
Alternatively, the futures may be overpriced and the price of bitcoin may actually decline ter the months ahead. One analyst told Bloomberg that he thought the current futures prices were at a premium thanks to “demand for exposure to the price of bitcoin from investors who otherwise cannot or do not want to own actual bitcoins,” more than they reflected where the price of bitcoin may be heading.
Regardless of their accuracy te reflecting the future price of bitcoin, the futures contracts have proved to be popular. Cboe compelled to halt trading twice because of circuit breakers triggered by high trading volume, and at least at one point the webstek went down.
Cboe will not remain alone spil a possible price indicator for bitcoin. CME Group Inc. is set to launch bitcoin futures on the Chicago Mercantile Exchange on Dec. Eighteen.
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