A us study points the finger at futures markets to explain the fall of Bitcoin

This week, the Federal Reserve Bank of San Francisco published a study concerning the fall of Bitcoin. According to these experts, the futures-backed virtual currency are at the origin of the downward trend observed for several months.

A downward trend in the long term

On December 17, 2017, the Bitcoin was the first crypto-currency. She made history by surpassing $ 20,000. The digital asset has registered an increase of 1,200 % in a few months ! The excitement became almost uncontrollable. Unfortunately, this trend did not last. In fact, as early as the month of January, the Bitcoin has collapsed. And it’s hard to climb back up the slope.

Pixabay – Designerkottayam / futures markets backed in Bitcoin would be the cause of his fall.

Even if in recent weeks the Bitcoin goes up, it is now struggling to surpass the 9 000 dollars. It is so far from the month of December 2017. Some experts focus on the question to know what is the cause of this dramatic drop. The analysts of the Federal Reserve Bank of San Francisco come to make a theory about it.

The problem of futures markets

According to this american study, the fall of Bitcoin would be directly linked with the launch of the futures markets, which date back to the end of the month of December. They speak of course of the futures markets related to the digital asset : “After an outbreak fast, the fall in the price just after the arrival of the futures contracts does not seem to be a simple coincidence. It is an effect consistent with the behavior of trading that accompany typically, for an asset, the arrival of a futures market. “

Pixabay – The Digital Artist / The study points the finger at the introduction of futures contracts dating back to the month of December 2017.

This is not the first time that this theory is developed. And I must admit that several points are troubling. Thus, one discovers, for example, that the Chicago Mercantile Exchange (CME) launched the first futures contract on the Bitcoin in the month of December, 2017, the day on which the digital currency has reached its all-time record.

However, before the arrival of the futures market, institutional investors did not have the means to speculate on the fall in the price of Bitcoin : “therefore, they no longer had to wait for the moment where they could say, “I was warned”. […] The launch of futures contracts on the Bitcoin has allowed pessimists to enter the market, which has contributed to the reversal of the dynamics of the price of Bitcoin. “

And the future ? The study does not specify whether or not the Bitcoin will rise. However, experts believe that the future of the virtual currency depends in large part on regulatory frameworks that will be put in place over the next few months. To be continued…

Source : Bitcoinist