The January futures nearly touched $19,000 a few hours after trading opened
The moment all crypto wizzes waited has arrived. Chicago Board Options Exchange started trading futures contracts on Bitcoin on Monday.
Starting at 15,000 per bitcoin for January the price quickly jumped at 19,000. That’s a 26% jump, which means the bitcoin advance isn’t showing any signs of weakening.
To refer to all the questions whether this is a bubble – there are only 2 ways this whole thing will finish – a pretty, but boring way and an ugly way. You see, there a two types of buyers:
The first are the bitcoin wizzes, that know all the mechanics of the cryptocurrency and even use it to trade. They wouldn’t sell their coins regardless what happens. Ok, they would, but you get the point.
The second one is more interesting – it’s the Speculators that keep it only because they hope the price will rise. Those people have no use of bitcoin at this point and would sell if the price starts falling 33% or something.
It’s hard to say what part of the buyers are genuine and what is simply slack. In a few words to assess their devotion and belief in the cryptocurrency. You can guess that the speculators are the most active. After $5,000 we can kinda all agree it was all speculators.
Now let’s get back at those scenarios. In the best case this is actually a correction to the new normality of bitcoin and the price will stop rising at some point. For a long time…
That won’t suffice the slack that doesn’t want to keep its money in coins. So they’ll just start selling till the price steadily falls, say by a third.
The ugly case is when the first crowd, or a big institutional investor decide to pull off, taken in by the high prices. That’s when a psychological avalanche happens, prices fall by two-thirds. And we end up with a good buying opportunity.