The First Bitcoin Futures Settlement Coincides With Bitcoin Going Under $10,000!
On December 10th and December 18th of last year CBOE and CME group started to offer futures contracts on Bitcoin.
While people were skeptical that Bitcoin futures can impact or manipulate the price of Bitcoin, this week and specifically today on Jan. 17th we observed that hardest crypto crash such that Bitcoin price finally break down below $10,000!
So why is the market hit the hardest today?
One reason? CME futures contracts settled for the first time on January 17th. 2018:
Per Business Insider:
The first bitcoin contracts, which are cash-settled, matured on Wednesday. The contract's settlement price is determined by a price auction on the Gemini exchange at 4 p.m. on Tuesday.
In EthNews.com the Bitcoin futures explained as such:
Cash-settled bitcoin futures allow traders and institutions to place bets on whether the price of bitcoin will rise or fall – without holding bitcoin itself. The CBOE's bitcoin futures are the first cryptocurrency derivative listed on a traditional exchange. Unfortunately, because of the contract's unique design, there could be some complications.
Also,
Back-of-the-envelope calculations suggest that as little as a million dollars could be used to shore up futures positions and influence the auction market. But, even if manipulation appears possible, legal safeguards might dissuade malicious activity.
What are your thoughts on current market corrections/crash?
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