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Bakkt Launch to Blame for 20 Percent Bitcoin Price Drop: JPMorgan Analysts

  • Alex Dovbnya
    ๐Ÿ“ฐ News

    JPMorgan strategists believe that the Bakkt flop is directly linked to the steep cryptocurrency market crash

Bakkt Launch to Blame for 20 Percent Bitcoin Price Drop: JPMorgan Analysts
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According to Bloomberg, JPMorgan analysts state that the much-awaited launch of Bakkt's physically-delivered Bitcoin futures is the reason why the BTC price tanked by more than 20 percent this week. 

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The writing was on the wall

While hardly anyone denies that the fact that Jeffrey Sprecher-helmed Intercontinental Exchange diving feet-first into Bitcoin is a major milestone for this nascent asset class, there was no consensus within the crypto community about how it would impact the market. 

As reported by U.Today, Anthony Pompliano of Morgan Creek Digital conducted a Twitter poll to gauge the sentiment within the crypto community. 26 percent of the responders believed that the price would go down. As it turned out, the Bitcoin bears hit the nail on the head this time around. 


Notably, the launch of cash-settled Bitcoin futures by CME Group also sent the market into freefall at the end of December 2017, kicking off a prolonging crypto winter. 

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JPMorgan is on the same page

JPMorgan strategists claim that Bakkt signifies the maturity stage of the nascent cryptocurrency market, but they also believe that the ICE-backed exchange is responsible for the steep price drop. After hyping up its launch for months, it debuted with very underwhelming trading volumes.             

โ€œIt may be that the listing of physically settled futures contracts (that enables some holders of physical Bitcoin e.g. miners to hedge exposures) has contributed to recent price declines, rather than the low initial volumes,โ€ the banking giant said in its recent report.

They have also noticed that the number of long positions in CME Bitcoin futures contracts has significantly declined over the past few months. 

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"Rule of 10 best days"

The dramatic BTC price downturn called into question the bull market narrative. The relative strength index (RSI), which is used to evaluate overbought and oversold conditions, dipped below 50 for the first time since April (a major red flag for the bulls). 

Meanwhile, Fundstrat analyst Tom Lee reminds investors that holding is the best way to catch the biggest gains given that they usually come in just 10 days. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry โ€” from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. Heโ€™s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Ex-Congressman Says Fed Should Not Play With Own Cryptocurrency

  •  Denis Sinyavskiy
    ๐Ÿ“ฐ News

    Former US Congressman Ron Paul shares his thoughts on the possible creation of Fedโ€™s own cryptocurrency

Ex-Congressman Says Fed Should Not Play With Own Cryptocurrency
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Former US Congressman Ron Paul spoke on Fox Business and said that the Fed should not think about creating its own cryptocurrency.

Fedโ€™s Crypto: To Be or Not To Be?

Rumors have been circulating for the past few months about the Fed possibly creating own cryptocurrency. It is expected that a digital coin would become a competitor to its counterparts on the market, and may even replace fiat money. President Patrick Harker, President of the Federal Reserve Bank of Philadelphia, commented on such rumors at a recent conference:

โ€œIt is inevitable. I think it is better for us to start getting our hands around it.โ€

However, there has not been no official follow-up by the Fed towards a crypto exchange. While proponents of this idea believe such innovation is necessary, it is expected that the exchange could stop the current delays involving US bank transfers.

What do the opponents think about the Fed's own cryptocurrency?

The idea of โ€‹โ€‹creating the Fed's cryptocurrency has its opponents. This includes Ron Paul, who believes that the Fed is in a better position to stay away from digital coins and allow the private blockchain sector and payment platforms to resolve this discussion in real-time. What the Fed plans to do next is unclear, but the central bank may still enter the game.

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About the author

Starting with a simple interest in cryptocurrency, over the past two years, Denis has worked in a cryptocurrency fund and become an author with an analytical bias. His engineering degree helps with the analysis of the technical part of the cryptocurrency market. As a fan of cryptocurrency, Denis believes that the blockchain technology is the future.

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