After a week-end of volatile trading with huge price swings and ahead of the launch in bitcoin futures on the CBOE, bitcoin lost a fifth of its value. Cryptocurrency, Bitcoin spiked 8 percent at the start of trading on the Chicago Board Options Exchange, in a matter of seven minutes it jumped from $14,509 to $15,732.
According to a news report the CBOE website appeared to crash under the load within minutes due to heavy trading. In afternoon trading on Monday Bitcoin climbed to over $17,000, while Bitcoin futures also traded higher at around $18,500 for January delivery.
Bitcoin futures have been acclaimed by supporters which allows them to bet on the rise or fall of the currency with the likelihood of attracting institutional money. Chief strategist at IG Markets, Chris Weston said that there has been mostly retail investors, but now the people it will attract are people who have never traded Bitcoin before and have less experience in the financial market. He went on to say that it is anyone’s guess what the ultimate impact will be.
Precautions Taken on Wild Fluctuations
Precautions have been taken to address wild fluctuations, such as if the price of Bitcoin went up or down by 10 minutes trading will be suspended for two minutes according to CBOE. On Monday morning, Naeem Aslam chief analyst at Think Markets said that he expects the limited of 10 percent to be extended over time.
The Gemini Exchange which is owned by billionaire’s Cameron and Tyler Winklevoss is the exchange that the CBOE futures have based the price of bitcoin auction price on.
Warnings of a Bubble
Bitcoin market capitalisation is over $260 billion and so far for this year has risen 1500 percent in value which has led to warnings of a bubble. Over the weekend Bitcoin lost 23 percent of its value in volatile trading.
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