Bitcoin rose again on Monday, as investors braced for a rush of institutional demand following the launch of CME Group’s bitcoin futures contract.
BTC/USD Price Levels
The value of bitcoin surged in early-week trade, reaching an intraday high of $19,862 on Monday. At press time, BTC/USD was trading at $18,818 for a gain of 7%. The cryptocurrency has added nearly 9% over the past five days.
Prices flirted with $20,000 over the weekend, and eventually peaked at $19,783. The cryptocurrency has more than doubled in value since the end of November.
At present values, bitcoin’s market cap is over $320 billion. It achieved 24-hour trading volumes of nearly $14 billion, with activity spread throughout the major exchanges. Bitfinex’ bitcoin-dollar trade generated nearly 9% of the daily volume. Bitcoin-won transactions on South Korea’s Bithumb accounted for nearly 5% of the daily turnover. Coindesk’s GDAX, BTCC and Bitstamp also accounted 2-4% of daily transactions, respectively.
CME Group Launches Bitcoin Futures
Bitcoin achieved a huge milestone Monday as the Chicago Mercantile Exchange (CME) officially launched its own version of the bitcoin futures contract. Although Chicago’s CBOE became the first to offer a bitcoin-based futures product CME Group is much bigger and can therefore generate more buying interest. Unlike the CBOE contract, which takes the closing price of bitcoin from the Gemini exchange, the CME version relies on multiple exchanges. According to analysts, this may may help the CME contract generate more interest as well as more volume.
The arrival of bitcoin on the major exchanges suggests the world’s biggest cryptocurrency is moving in the direction of mainstream investing. Once viewed as an obscure and esoteric digital currency, bitcoin has revolutionized the global financial system by sparking the creation of an entirely new asset class. There are now thousands of cryptocurrencies available on the market, with 29 valued at $1 billion or more, according to CoinMarketCap.
Bitcoin’s staggering price surge has led many in the financial community to issue stern warnings over its long-term trajectory. Many say the digital currency system is an enormous bubble that could burst violently in the not-too-distant future. They argue that bitcoin’s value has been artificially inflated by widespread speculation and the fear of missing out that usually accompanies price bubbles.
A recent survey conducted by The Wall Street Journal found that 51 of 53 economists polled considered bitcoin’s value to be unsustainable.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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