Earlier this year, the Federal Reserve had published an article on its official website that stated that the decline in the price of bitcoin is due to the launch of CME Bitcoin Futures.
History is the proof
Bitcoin reached the all-time high last year in December when the price of bitcoin reached around $20000. However on the 17th of December last year, the price started a downward rally just after the launch of CME Bitcoin Futures. When CME Bitcoin Futures were launched the starting price was around $20600 per bitcoin which came down to around $19000 on the first day itself.
Futures Market
According to the federal reserve, the price fall has been observed not only in cryptocurrencies such as bitcoin but also in other assets when futures markets are introduced. As soon as the mortgage securities were introduced the mortgage industry boom was reversed. Similar things are happening with bitcoin as well.
According to the Federal Reserve, the price of bitcoin would have been rising above $20,000 even till date if CME had not launched its bitcoin futures in December last year and the FED blames CME Bitcoin Futures for the bitcoin market crash.
Bitcoin Futures distract investors as CME bitcoin futures are settled in cash and no real bitcoin backs them. Hence, investing in bitcoin futures decreases the spot demand for bitcoin causing the price to fall.
What do you think above CME Bitcoin Futures? Do you feel the Federal Reserve is right? Are bitcoin futures the real cause of the market crash? Tell us your thoughts in the comments section below.
