Bitcoin futures could be hurting bitcoin's price

-


By  Oscar Williams-Grut


LONDON — A Wall Street analyst known for his bullish stance on bitcoin has flagged the possibility that bitcoin futures contracts could be hurting the cryptocurrency's price.


Bloomberg reports that Tom Lee, the cofounder of the research firm Fundstrat, said in a note last week that bitcoin futures contracts could be behind bitcoin's recent "gut-wrenching" price declines.

Lee said in his report that there was "significant volatility" in bitcoin's price around the expiration date of CME Group and Cboe futures contracts.


Both CME Group and Cboe launched bitcoin futures products in December, when bitcoin was trading close to record highs of about $20,000. Bitcoin has tumbled since then. Bitcoin was down 0.35% against the dollar to $6,438.56 a coin as of 8:45 a.m. BST (3:45 a.m. ET) on Monday.


Bloomberg reports that Lee wrote that traders who are long bitcoin and short futures could sell bitcoin during the price auction to cause the price to drop and leave their futures contracts "with a handsome profit."


Chris Concannon, president and chief operating officer at Cboe Global Markets, Inc. said: "While we are excited about our recently launched Bitcoin futures, the notion that they have materially affected the bitcoin price overstates their influence and ignores other critical facts."


"Our strict position limits and the limited open interest in our May and June settlements, suggest that the fall of Bitcoin can be more easily explained by other factors such as the recent regulatory scrutiny around the globe, steps by government tax collectors, the rise of other cryptocurrencies, and declining media interest in the asset," he said.


CBOE said it saw open interest at the time of June's settlement at 1,412 contracts, which is equivalent to 1,412 bitcoin. The bitcoin market would be unlikely to be influenced by that number of contracts.


Coinfloor, a UK-based bitcoin exchange operator, announced plans for a physically settled bitcoin futures contract in March. This is where holders of a contract are actually given the requisite bitcoin when the contract expires. Cboe and CME Group give the cash value of bitcoin at the expiration of their contracts.


Obi Nwosu, the CEO of Coinfloor, told Business Insider last week that the physically settled futures were a response to demand from Coinfloor's institutional clients who were concerned about the ease of manipulation of cash-settled contracts. Any price manipulation around auctions would be short term, and if investors take delivery of bitcoin at the expiration of a contract, they can simply wait for the price to stabilize before selling it.

Published in : http://www.businessinsider.com/bitcoin-price-could-be-hit-by-bitcoin-futures-contracts-says-tom-lee-2018-6

Comentarios

Publicar un comentario

Entradas populares de este blog

A Race for Blockchain: IBM, Microsoft, Lenovo explore DLT

-
Imagen
Blockchain, cryptocurrency, and other innovative techs have significant disruptive potential. Within the course of time, this fact becomes obvious not only for community enthusiasts but also for traditional industry players. That is probably the major reason for world electronic bulls to explore the innovative possibilities to boost their own progress. Microsoft showed interest in blockchain technology back in 2018. They announced their plans to apply the technology behind Bitcoin (the leading crypto by market cap) in its decentralised IDs (DIDs) App. The company was support DLT-based DIDs through Microsoft Authenticator App. However, as of now, the project seems to be frozen.    Unstoppable IBM    IBM, another technological giant, has has shown interest in exploring blockchain and cryptocurrency techs even earlier, in 2015. As of now, the company is known to take part in several related projects.   In January 2019, Ford Motor comp...
Leer más

Cryptocurrency Universe Expands Far Beyond Bitcoin

-
Imagen
The code base is increasing and improving every day as computer science graduates from top schools jump on board. By Aaron Brown A sort of “cryptobrawl” broke out last month at the Milken Institute Global Conference between economist Nouriel Roubini and panel participants more optimistic about the future of cryptocurrency technologies. I had the opportunity to participate in a partial rematch at Battle of the Quants, where Roubini was just as negative and DMS Governance's John D’Agostino presented a moderate defense. All of the heat concerns the border of crypto and traditional finance, but much of the important stuff is happening far from the border. For example, one of Roubini's claims is that advances in financial technology by existing financial institutions and startups are delivering on many of the promises of crypto-enthusiasts, and these will continue to transform financial markets. That’s true. However, many of those advances were spurred by the threat of ...
Leer más

Small-business owners more optimistic at the start of 2020, the NFIB says

-
Imagen
The numbers: Small businesses turned more optimistic about sales and profits in the first month of 2020, but they are still struggling to find qualified workers, according to a closely followed survey. The National Federation of Independent Business said its index of small-business optimism rebounded from a small dip in at the end of last year, rising to 104.3 points in January from 102.7 in December. Business owners were more confident that sales would continue to rise and help support higher profits, the NFIB said. What happened: The net percent of owners who expect higher inflation-adjusted sales in the months ahead rose by 7 points to 23%. By and large, business owners were nonplussed by the impeachment trial of President Donald Trump. A gauge that measures uncertainty was basically unchanged. The biggest worry of small businesses continues to be a shortage of skilled employees available for hire. A quarter of owners say it’s their No. 1 problem — more than taxes or re...
Leer más