The massive CME Group opened Bitcoin futures trading today and prices stumbled slightly. Media jumps on the decline.
Bitcoin futures are down as the world’s largest futures market, CME Group, opens trading. Immediately after trading began, Bitcoin futures contracts closing in January jumped to $20,800 before falling to $18,800 at press time. Contracts expiring in February, March and June are still priced at $20,000. Considering Bitcoin’s current spot price of $18,500, Wall Street still seems mildly bullish.
Of course, no mainstream media report on the price of Bitcoin would be complete without the use of clickbait terms such as “bearish” or “bubble.” The Telegraph reported on the drop, using the headline “price falls after investors turn bearish.” This is despite the fact that a 4% drop is absolutely miniscule in the cryptocurrency world.
Likewise, BBC reported on the opening of CME’s market, reporting that acceptance onto the massive exchange brings Bitcoin a step closer to mainstream adoption. Of course, BBC felt it necessary to immediately follow their statement with a quote from UBS Chairman Axel Weber giving his opinion that “Bitcoin is not money.”
Contrast to CBOE
There is a significant contrast in the market’s reaction to CME’s futures and its 19% gain after the opening of CBOE futures last week. However, it’s useful to realize that Bitcoin had dropped by thousands of dollars in the days before CBOE trading opened, so a significant gain shouldn’t have been surprising. CME futures launched following most exchanges hitting an all-time high Bitcoin price yesterday, so a small drop from these new highs is hardly dramatic.
There are many theories on what comes next for Bitcoin following the opening of CME’s market. While there are reasonable arguments for the possibility of investors shorting the contracts, investors should remember “the trend is your friend.” Even Bitcoin-hater and JPMorgan Chase CEO Jamie Dimon admitted that the currency could hit $100,000 before “collapsing.” Following Dimon’s assessment of Bitcoin as a “fraud” earlier this year, Swedish firm Blockswater filed a formal “market abuse report” with European regulators. The company alleges that Dimon knew his statements were inaccurate and was intentionally trying to influence the Bitcoin markets with his remarks.
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Author: David Dinkins