The recent ups and downs of the cryptocurrency roller coaster may have finally come to end. How could it be any other way when we have seen the market cap of all cryptocurrencies go from $18 billion US to $603 billion US in just under a year. With this sort of trend, the trillion-dollar mark shouldn’t be too far away.
On November 16th, 2017, the CEO of Coinbase announced that new institutions would bring over $10 billion dollars to the crypto-markets. And, as of December, the CME and CBOE officially authorized the use futures contracts on Bitcoin transactions.
The CME, the world’s largest futures contract market, has proposed Bitcoin contracts be indexed to the BRR or Bitcoin Reference Rate. The minimum for these futures contracts is currently set at 5 units of Bitcoin.
Whereas, the CBOE has indexed Bitcoin to the Gemini markets, which, in turns, means it can easily be traded for cold hard cash.
The days when the world of high finance looked down at Blockchain technology are finally over. The arrival of the CME and the CBOE, most often grouped as “Wall Street”, have always undermined the stock markets…
Why shouldn’t they have the same effect on the world of cryptocurrency?
From Wolf of Wall Street to Wolf of Blockchain
One dominant trait in investors is often arrogance. Those, who regularly buy and sell off assets, often have the conviction that they are smarter than the other half of the market. These convictions are based on information, and in today’s world of finance, any sort of analysis can either be subjective or objective to other investor.
Therefore, investors can be led to take certain positions by other have predicted or commented on about the current state of the market. Then, these positions have a much larger effect on the market depending on the size of the investment or its ability to persuade other investors of its decision.
In Anglo-Saxon countries, a “Bitcoiner” is an investor who specializes in Bitcoin. However, there are several different classes of Bitcoiners
There is one class of Bitcoiners known as “Dolphins”. Dolphins have at least 1000 Bitcoins, whereas “Whales” are investment portfolios that possess at least 10,000 Bitcoins. Whale activity is, therefore, likely to set forth a wave in the sea of cryptocurrency. And, Whales like Wall Street are bound to give birth to countless more Whales.
More Royal Than the Queen
According to a cryptocurrency and Blockchain expert, Eric Wall, Wall Street has left an indelible mark on the world of finance. Wall notes that Bitcoin’s $20,000 spike in December was caused by the CME and CBOE. This is because many investors wanted to get in before the futures contracts were established. Although Wall Street was not the only reason for Bitcoin’s new record high, the same cannot be said about its recent decline.
To begin, back on January 17th, the CBOE began fundraising for the futures contracts. While on January 26th, the CME did the same.
By comparing the price of Bitcoin Cash to the CME and CBOE, now, we can see that they are experiencing completely opposite trends. The rise of stock market prices corresponds directly to the crash of BTC and BTC Cash. This paradox is so precise that some might even be led to believe that it’s the work of some sort of Bot.
Afterall, this wouldn’t be the first time that a Bot wreaked havoc on the world of Bitcoin. In 2014, a Bot, nicknamed Willy, hijacked an estimated 744,408 Bitcoins on a Japanese exchange known as Mt. Gox.
The Blockchain community needs to be careful and make sure that Wall Street does not get too involved in the crypto-world. After all, it is institutions like Wall Street that have sparked the creation of virtual currencies.
Meanwhile, we will have to wait in anticipation for February 14th and 18th. The dates that correspond to the settlement of the first futures contracts on both the CME and CBOE.