Mark Mason
Well-known member
Federal Reserve Bank of San Francisco Says Bitcoin Futures are to Blame for Price Decline
The Federal Reserve Bank of San Francisco recently issued a letter that blames the significant price decline of Bitcoin from just under $20,000 to under $10,000 on the release of Bitcoin futures.
The Fed authors said that the “launch of Bitcoin futures allowed pessimists to enter the market, which contributed to the reversal of the Bitcoin price dynamics”. Previously, there was significant bias towards “speculative demand for bitcoin [that] came only from optimists”, which had allowed the price to increase relatively unabated. This changed with the introduction of Bitcoin futures by CME and CBOE, the authors argued.
The authors went on to discuss the difference between the speculative and transactional parts that make up the whole price of Bitcoin and other cryptocurrencies. They discussed how transactional price depends on its demand by the amount of people using the cryptocurrency, which is in turn affected by the different attributes that each coin offers. Interestingly they described said competition as “winner-takes-all markets”, despite they fact that Bitcoin currently has a market share of around 36%.
Read more: https://www.dashforcenews.com/feder...tcoin-futures-are-to-blame-for-price-decline/
The Federal Reserve Bank of San Francisco recently issued a letter that blames the significant price decline of Bitcoin from just under $20,000 to under $10,000 on the release of Bitcoin futures.
The Fed authors said that the “launch of Bitcoin futures allowed pessimists to enter the market, which contributed to the reversal of the Bitcoin price dynamics”. Previously, there was significant bias towards “speculative demand for bitcoin [that] came only from optimists”, which had allowed the price to increase relatively unabated. This changed with the introduction of Bitcoin futures by CME and CBOE, the authors argued.
The authors went on to discuss the difference between the speculative and transactional parts that make up the whole price of Bitcoin and other cryptocurrencies. They discussed how transactional price depends on its demand by the amount of people using the cryptocurrency, which is in turn affected by the different attributes that each coin offers. Interestingly they described said competition as “winner-takes-all markets”, despite they fact that Bitcoin currently has a market share of around 36%.
Read more: https://www.dashforcenews.com/feder...tcoin-futures-are-to-blame-for-price-decline/