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A landmark for Bitcoin

A landmark for Bitcoin

Posted on: 12/12/2017 | Author: ATB Financial's Economics + Research Team

The world’s most popular digital currency has made its world debut on futures markets. That means that for the first time, investors institutional and otherwise can bet on the rise and fall of the currency. This is big news.

It’s big news because the decision has helped make steps towards legitimizing Bitcoin. One of the biggest knocks against the currency, at least from governments and institutional investors, is this idea of the currency’s legitimacy. Since there isn’t a company or central bank controlling bitcoin, investing in the currency is seen as an investment risk. With the news of future contract trading, this idea is changing.

Since the Chicago Board Options Exchange (CBOE) launched its futures contract, the currency has continued to surge. Last week, The Owl reported that the currency topped the $US 10,000 mark. In subsequent days, Bitcoin’s price rose to above $US 15,000. After being placed on the exchange on Monday, Bitcoin’s price surged another 26 per cent. This forced the CBOE to temporarily stop trading to let the volatility cool off.

The new Bitcoin futures contracts have attracted more attention than many anticipated. This demand has increased Bitcoin’s price immensely and brought fresh worries of a bitcoin bubble. But, we’ll have to wait and see if the currency decreases in value.

The fact that Bitcoin is entering mainstream investing is important. It’s significant because the digital currency is moving away from an unknown part of the internet to a place where it can be tracked and regulated. But, while the currency moves towards legitimacy, the threat of a Bitcoin bubble bursting lingers.

Bitcoin price in US dollars, graph

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