Coin Market Cap
Wall Street Guru Explains Why Bitcoin Price Is Still Going Up
Bitcoins / Breaking News

Wall Street Guru Explains Why Bitcoin Price Is Still Going Up

Wall Street guru Tom Lee has been discussing his opinions on Bitcoin, and what the future holds for this cryptocurrency. Although his is still bullish on Bitcoin, his opinion has shifted very slightly. He blames the recent lack of success that Bitcoin has seen of late on Bitcoin futures, and he believes that the reason that Bitcoin has dropped in value by 20 percent earlier this week is due to the expiration of futures that have been linked to the cryptocurrency. Lee, has spoken about the ‘significant volatility’ around certain futures expirations, and even says that the sentiments and technical factors have been ‘awful’. In his report that was published on Thursday, Lee cites the theory that Bitcoin appears to fall into expiration, noting that there have been as many as six expirations since the Bitcoin futures contract launched. The charts suggest that the price of Bitcoin has fallen by 18 percent in the ten days which before the expiration on average, with the prices recovering by the sixth day after the expiration.  Lee believes that as contracts move close to the expiration time, traders may sell a large share of their coins at a volume weighted average price as a way of minimising tracking error. They may then sell their remaining share nearer the expiration time, which will then cause the drop in price. Lee also notes that rates flow into Bitcoin have been insignificant, as there is more set supply this year due to initial coin offerings, mining rewards, and capital gains taxes. On top of this, the absorption has also been hampered due to the slow progress on creating institutional tools, making Lee particularly bullish on this cryptocurrency. If people are using futures in order to make money with cryptocurrency, then these futures should be hedged and long term holdings should be sold off ahead of futures. Chart data does suggest that Bitcoin prices suffer before the expiration, and then recover afterwards.

You can share this post!

Why Ripple Is Not A Security

Ripple XRP Partner Has Launched In The UK