How do institutional players like CME, CBOE and Bakkt affect Bitcoin prices?

The emergence of heavyweights such as CME, CBOE and Bakkt in the Bitcoin space is considered by many to be the key to boosting Bitcoin's acceptability in the mainstream market and helping prices to increase dramatically. While this is not happening as some have predicted, it is still too early to conclude anything and Bitcoin futures markets may be affecting the spot prices. The quality and magnitude of the aforementioned influence are controversial, but this article will look at a few ways that the fledgling BTC derivatives market influences developments on price charts.

Bitcoin futures are adjusted first and situation corresponding market

At the end of 2017, both the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) introduced Bitcoin futures trading. This is like a lifesaver for many segments that once hesitated before an asset considered too dangerous for many people like Bitcoin. Accordingly, traders in countries that ban Bitcoin or strictly restrict benefits from this move of the BTC market.

There is much debate as to how these markets significantly influence the spot price of Bitcoin, but comparing markets at specific times and contexts can help analysts draw conclusions. their own. For example, when the regulated BTC futures appeared in early December 2017, the price of Bitcoin increased rapidly.

On December 10, CBOE's Bitcoin futures contract was launched and spot prices increased by more than 10%. Some argue that the CME and CBOE BTC futures are the basis for driving the rally to an all-time high on December 17 at nearly $ 20,000. CBOE was the first organization to debut and CME Futures made the announcement 2 months earlier (in October) but it was interesting to see it on the day of ATH, but the price started to drop quickly afterwards.

Price manipulation hypothesis

Of course, there are many other factors besides BTC futures that contributed to the strong uptrend in late 2017 and early 2018. 2017 is the year of ICO, with interesting and suspicious projects appearing everywhere. Prior to the regulations imposed on the market in the following years, cryptocurrency was still a wild financial aspect.

Although there is the theory of financial giants manipulating the market by holding short orders Bitcoin Futures negatively affecting public awareness through mainstream media but no convincing evidence has been provided to justify those allegations. However, Bitcoin futures have provided investors with a discount on new means to shorten the market and some speculate this is what happens before the next price drop in 2018.

Bakkt's BTC futures contract, hypothesis space price

As the Bakkt exchange owned by Intercontinental Exchange entered the physical environment of BTC futures contracts in September 2019, the influence of the futures market regulated on spot prices became limited. than. Not like CME Bitcoin Futures Being paid in cash, Bakkt's Bitcoin futures contracts are fully mortgaged and require actual BTC movement at the end of the contract.

"OI contract Bakkt's BTC future reaches a new all-time high. ”

When creating a new ATH on February 6 this year, Bakkt's OI seems to be following the 17% increase of BTC on the spot market starting January 24. As such, the futures market may be affected by the spot price of BTC, but it does not always seem to be true in history.

The proof is the record numbers for Bakkt in November 2019 when the price dropped by $ 1K. Of course, the product has just been launched in September and some will feel curious about it. At the same time, the upward sentiment may be due to the involvement of the organization. However, from November 2019 until 2020, the spot price of BTC fluctuated relatively stable at more than $ 7,000, possibly due to the participation of organizations that helped stabilize prices.


Examples of price gaps CME be filled

Price gaps in the futures market are another point of concern. Spot prices tend to follow and fill the price gap in the futures market. For example, if there is a gap on the CME Futures in the same month, then the price will adjust almost immediately in the spot market when futures contracts reopen. However, these predictions are not always true. Some guess recently said there were no gaps on March 10 but the price dropped by nearly $ 4,000 over the next few days.

Covid-19 cause economic panic, contract future and contract option Choose harder, but Games affect organization's still do not get lost

Bakkt and CME's Bitcoin futures have been badly affected by the ongoing economic downturn due to concerns about the Corona virus and shut down businesses and the tourism industry. Cryptocurrency analysis team Skew noted, "The OI of Bitcoin futures will collapse by 50 percent last week." There are almost no Bitcoin CME option contracts working and the same thing happens with Bakkt even worse.

"Projections decreased 50% OI of contract future Bitcoin last week. ”

Most surprisingly, CBOE has stated that it will no longer offer Bitcoin futures from March 2019, but existing contracts can still be traded until expiry in June.

As spot prices continue to be affected by Bitcoin media and whales, institutional players like Bakkt and CME can offer relatively new and regulated trading forums. Accordingly, traders can find new ways to boost the market and so analysts can learn more about the spot price of BTC and how it moves.

With a strict regulation system, the risk and dependence will be higher. For example, wait for the SEC to approve the Bitcoin ETF. Moreover, the more Bitcoin is converted into institutional money, the more this financial power and regulatory will be able to influence the market price, although it is not clear whether it is good or bad.

Thuy Trang

According to News Bitcoin

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