Is the bitcoin slumped in 2018, was it affected by the futures market?

Time flies, from the Chicago Board Options Exchange (CBOE) launched the XBT futures contracts, and the Chicago Mercantile Exchange (CME) launched bitcoin derivatives had been a year.

But the passage of time, today’s encryption currency spot market has lost the all-time high of the scenery, in the industry is full of bearish, look bad mood. At the same time, bitcoin futures contracts instead of the development of good, leading to some skeptics think these derivatives brings damage to the crypto currency spot market.

The bitcoin futures spot market to “tame”?

On the Chicago Mercantile Exchange and the Chicago Board Options Exchange announced a few weeks ago bitcoin futures contracts, bitcoin core (BTC) prices have soared. In Chicago, seventh days after the official release options exchange bitcoin bitcoin futures contracts, hit the highest point in history, $19600 but then there is no increase. On the other hand, because bitcoin prices fell repeatedly, but “encourage” the bitcoin derivatives trading volume of Chicago commodity exchange and Chicago Board Options Exchange soaring. According to a liquidity report of Chicago Mercantile Exchange and the Chicago Board Options Exchange released in December 7th shows that before bitcoin prices once again experienced a major setback, bitcoin futures trading volume rose in November. The same situation also occurred in October this year, Chicago commodity exchange bitcoin futures average daily turnover (ADV) also showed a substantial growth.

The Chicago Mercantile Exchange and the Chicago Board Options Exchange is the world’s largest foreign exchange since December last year, has been selling bitcoin derivatives.

Market skeptics, even believe that the futures market has caused a long-term decline in encryption of the currency market, and also feel that futures actually determines the price of bitcoin pricing. The most typical example is including silver and gold, precious metals, precious metals derivatives because when first introduced, also inhibited the rise in the price of the final decision and pricing. The coin circle of people must remember the Chicago Mercantile Exchange, honorary chairman Leo Melamed last year in an interview with the Reuters said:

The futures market will tame bitcoin. We will carry out the supervision, so that bitcoin is no longer wild, not wild, we will tame it becomes a regular trading tool.”

Below: bitcoin futures report of the Chicago Mercantile Exchange in July 12, 2018

The use of short selling hit bitcoin spot market

After the bitcoin futures market, the market was lower, but also make people doubt whether the derivatives dealers in the manipulation of the spot price, is not only the financial institutions, and even some large enterprises can buy bitcoin in stock exchange, and in the CME and the CBOE lever arranged in short positions to achieve this purpose.

Above: after the bitcoin stock market experienced selling for five consecutive days, the Chicago Board Options Exchange in November 20th the volume of trading volume on the Chicago and finally commodity trading agree.

As those short bitcoin miners like those from stock exchange to buy bitcoin futures traders is not in a hurry, because they can put their bitcoin holdings slowly thrown back into the market, but also enjoy the protection of futures hedging positions. A few years ago, the same technique has been applied in the precious metals market. Now, people can not even physical assets to trade, which is why you will see a number of reasons for “paper gold” products are traded.

This week, the Chicago Mercantile Exchange and the Chicago Board Options Exchange Processing about 3500-7000 ADV contract, if you look carefully, you will find some days before whenever the market change, there will be a bigger, more number of ADV contracts. For example, in November 20th, the number of Chicago commodity exchange bitcoin futures contract reached 14490 pen high. Coincidence is, the average daily turnover in Chicago on the day of the XBT Futures Options Exchange and Chicago commodity exchange match. However, on the Chicago Mercantile Exchange bitcoin derivatives prices soared after five days, from November 20th to November 25th, bitcoin spot price from $4670 to $3600 to fall suddenly.

The November 11, 2018 Chicago Mercantile Exchange and the Chicago Board Options Exchange bitcoin contract

In fact, since December last year, bitcoin futures forecasts have undergone considerable change, when people still “bet” bitcoin prices will rise to $2-5. However, by December of last year, January and February, forecast the price of bitcoin futures contract has suddenly become $3200-3500, from the point of view, this is a lot of bitcoin insiders unimaginable price.

The upcoming launch of more bitcoin futures products

Of course, now judge bitcoin futures product is still too early to the negative effect of spot price. But some people insist that the futures market to launch a benefit without harm to the crypto currency. However, in addition to the Chicago Mercantile Exchange and the Chicago Board Options Exchange, now many large financial institutions are also trying to bitcoin futures.

Vice president of NASDAQ Joseph Christinat media team said they plan to launch in the first half of 2019 his bitcoin futures products; Intercontinental Exchange’s encryption currency exchange Bakkt also revealed plans to release bitcoin derivatives in December 12th (at present has been delayed, is expected to start selling in January 24, 2019). However, these institutions of futures contracts and the Chicago Mercantile Exchange and the Chicago Board Options Exchange is different, in the case of Bakkt, they are ready to launch the product futures contract settlement bitcoin, which is at the end of the transaction will be the actual bitcoin in the customer’s account, and direct access to digital assets.

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