Bitcoin Futures Launch Allegedly Triggered the 2018 Crypto Winter
Many people wonder why the cryptocurrency boom of 2017 came to such an abrupt halt. The obvious reason would be because speculators came to their senses and cashed out. It now seems the Trump administration may be to blame for this unfortunate series of events. The futures products, which were designed to take cryptocurrency mainstream, may be the downfall of the industry.
The Collapse of 2017 and 2018
It was a spectacular run for Bitcoin, altcoins, and tokens throughout the second half of 2017. Massive gains were noted across the board, albeit everyone agreed the rate would not be sustainable for long. In the end, the prices collapsed and nearly retraced in full over the following months. This is, for all intents and purposes, a rather typical market cycle based on supply, demand, and speculation.
However, there have always been rumors as to how the markets were manipulated. Albeit never proven, these claims did make a lot of sense at the time. This sudden and violent retrace was anything but natural, and it was as if all markets were purposefully kept in check for over a full year. According to a former CFTC member, that is exactly what happened. The Trump administration took some measures which caused the cryptocurrency boom to deflate in very quick succession.
Futures Products are Evil
On paper, Bitcoin futures products should get mainstream investors and speculators interested in cryptocurrency. In the real world, the opposite has come true. Ever since these vehicles were introduced by the Trump administration, the cryptocurrency industry has come under tremendous pressure from speculators looking to erase all gains sustained throughout 2017. The CFTC, Treasure, and SEC agreed that exposing cryptocurrency to the mainstream would make its price surge deflate. The plan worked, despite so many cryptocurrency enthusiasts being over the moon as to how futures would change the world.
Ever since both CME and CBOE decided to offer Bitcoin futures, the world’s leading cryptocurrency has seen a lot more volatility than before. More specifically, there is plenty of bearish pressure every single day, which is still in place to this very day. The Trump administration wasn’t too happy with this uncontrollable form of money gaining this much traction. As such, they spared no effort in ensuring that could not happen back then. It seems rather unlikely that such a dramatic rise will occur again this year, or in the years ahead.
Time to end Bitcoin Futures?
Any service provider in the cryptocurrency space looking to advance the price of Bitcoin or altcoins may want to rethink launching futures contracts. It is evident that this form of investment is not doing the prices any favor, and only has the opposite effect in the long run. Cryptocurrencies are not designed for institutional investors, but rather for regular consumers. Those users do not care about futures contracts in the slightest.
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JP Buntinx, Khareem Sudlow
