Predicting the Future Direction of Bitcoin
Last week an article was published in the name of the Japanese Economist, Yukio Noguchi, which stated that the introduction of the Bitcoin futures market in the U.S. has met the turning point in the Bitcoin rally.
Bitcoin prices spiked in just five days after the CBOE Futures trading started trading in Bitcoin Futures on December 10.
Noguchi’s argument focuses on the report titled, “How Futures Trading Changed Bitcoin Prices.” He caught the eye of the audience when he quoted, “Because it’s now possible to trade on Bitcoin futures, you’ll never see a rapid surge again”, in an article in the Diamond Weekly.
Billionaire investor Warren Buffett referred to Bitcoin as “rat poison squared” since, it lost two-thirds of its value from December, last year.
But, none of this changed the mind of the supporters of the Bitcoin. While, after seeing the huge slump in the crypto market over the last six months, the fact that these cryptos will ever boom to its elevated levels anytime soon is still dizzy.
Although economists have blamed the futures trading the sole reason why cryptos have lost their value, they have never doubted on the potential of the Blockchain platform and how efficient it could be proved in the financial industry.
This dip in the market can be related to the housing bubble that happened in 2008. The bubble too occurred due to the financial innovations such as securitization of mortgage debt. The Tokyo stock bubble deflated when the stock-index futures were introduced in Japan in the 1990s. Nouriel Roubini, a renowned economist, has also called the cryptos the “biggest bubble in human history.”
Many big financial institutions and other potential investors have backed out from investing in cryptocurrencies and are actively involved in the trading of securities on Wall Street. Some of the tokens have declined to be effectively worthless. This decline can be taken parallel to the collapse of the dot-com bubble in the early 2000’s.