The price of bitcoin, which crossed $12,000 less than 12 hours ago, has set a new record high by surpassing $13,000. That's a futures contract. At CBOE, this currency future will be traded under the ticker symbol "XBT".
The bottom line is that it's important not to confuse investing with speculating, and bitcoin is definitely a speculative purchase right now.
So now, there are three new mechanisms for pricing efficiency in the currency.
Bitcoin has surpassed the RM48,900 mark today as it gears up to take its place on mainstream markets. It is indeed a leading player in the futures market.
The CME says bitcoin futures will be priced at a premium to standard Equity Index futures, but in line with the pricing conventions of other premium products.
For those keeping count, bitcoin's price has jumped by $3,000 in less than a week. Instead, the ethereum price traded sideways, remaining at $462. This type of trading position is called a straddle. The idea is to allow our investors to gain more cryptocurrency exposure without leaving their brokerage accounts.
The altcoin markets, on the other hand, were generally characterized by positive movement, and the number of cryptocurrencies with billion-dollar valuations swelled to a new all-time high. Bitcoin now has a market value of about $220 billion, putting it into the ranks of the 20 largest stocks in the S&P 500.
But France's central bank last week issued a strong warning against further speculation on Bitcoin, with the Bank of France governor Francois Villeroy de Galhau terming it as a "speculative asset" whose value and volatility have "no economic basis". It means that there will be more interest and less wild swings. Though we have worked through a lengthy, comprehensive process with the CFTC to get to this point, we recognize bitcoin is a new, uncharted market that will continue to evolve, requiring continued collaboration with the Commission and our clients going forward. I feel the new demand is mainly being driven by people using it as digital gold seeking an uncorrelated asset to park their money in. Cryptocurrency traders will now also be required to disclose their identities in response to the growing fears that the cryptocurrency is being used to finance drug dealings and other illegal transactions. Bitcoin has only just opened the door. Because of its huge growth, interest by investors and potential, CBOE, and CME have seen it fit to jump in. We just don't know for sure when, but the regulatory hurdles are already out of the way. Cryptocurrency miners secure transactions on the blockchain and, in exchange for expending considerable computing resources to do so, are rewarded with newly created coins. An investment of $1 at the beginning would now be valued at more than $1.4 million.
This post was written by Danny Chabino.
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