With it having been almost impossible to avoid the news, most will probably be aware that cryptocurrency Bitcoin’s exchange value smashed through the $10,000 barrier last week. With previous ‘round number’ price levels being breached, having led to significant sell-offs as early investors looked to lock in profits, there was plenty of speculation what the result of the price hitting $10,000 would be. The answer was an acceleration in the buying frenzy taking Bitcoin past the $11,000 mark within a few hours.
However, at north of $11,000, the market did get a bit of a nosebleed and Bitcoin’s price slumped back to the low $9000s between Wednesday and Thursday. With the steepest part of the drop taking place over a few hours on Wednesday, many observers will have called the Bitcoin ‘bubble’ as having ‘popped’. The phenomenal 2017 bull run for Bitcoin took the cryptocurrency’s value from around $1000 at the turn of the year to above $10,000 last week, with the past few weeks seeing particularly rapid gains. That, understandably, has led to widespread denouncements of ‘bubble’.
However, if Bitcoin is in a bubble, rather than the price gain simply reflecting its traction tipping point bringing it into more mainstream financial markets, it appears not to have burst just yet. Bitcoin dropping back to the lower echelons of the $9000s rather acted as a resistance level and trigger for buyers to return to the market and buy up more of the cryptocurrency. From Friday onwards, Bitcoin’s price resumed its upward trajectory and as of early Saturday has once again breached the $11,000 level. And, so far, this time it appears to be holding above it. Or at least it has done so for a couple of days now, only very briefly dipping just below $11,000 yesterday before bouncing back before touching $10,900.
As well as those investing online in Bitcoin obviously taking a ‘buy on the dips’ approach, the cryptocurrency’s exchange value was also buoyed over the weekend on news mainstream exchanges will start to offer Bitcoin derivatives. The Chicago Mercantile Exchange, the world’s biggest commodities and futures exchange, announced on October 31st it was seeking regulatory approval to start offering Bitcoin futures. That announcement, and follow-up statements of intent by the Cboe Futures Exchange and Nasdaq was widely credited as the catalyst for Bitcoin’s must recent run. Now the CME have put December 18th as the date Bitcoin futures will start trading and Cboe that they would beat them to the punch and launch their own derivatives on December 10th. The Nasdaq entering the fray is still a vaguer ‘first half of 2018’.
The validation Bitcoin, and the rest of the cryptocurrencies market by proxy, has received from this debut into mainstream financial markets appears to, at least for now, be proving enough to support for Bitcoin to maintain recent gains. The question now is what will happen to Bitcoin’s price over the rest of this week prior to Cboe’s launch.
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