Bitcoin made a stunning debut on the futures exchange on Sunday. The cryptocurrency surged as much as 25 percent during the debut session on Cboe Global Markets Inc.’s exchange. The trade was so active that it triggered two temporary trading halts meant to cool volatility. The exchange came to a halt as it launched the first futures contracts at 6 pm EST on Sunday. As per the CoinDesk’s Bitcoin Price Index (BPI), the cryptocurrency surged from $14,509 at 22:59 UTC to $15,732 at 23:06 UTC. With the launch of Bitcoin on the futures exchange, professional traders and investors can raise their risk quotient in the cryptocurrency steering the price further. In addition, launch on the futures exchange has ensured Bitcoin now trades in a regulated market.The Bloomberg reports that the first trading halt came about 2 1/2 hours after the session began on Sunday, while the second one triggered after four hours. The increased trading activity can be attributed to the contract to expire, dated January 17, 2018.
Risky asset
While investors may be adding to their positions in the cryptocurrency market, Reserve Bank of India’s is not comfortable with non-fiat or private cryptocurrencies such as Bitcoin. Legendary investors from India and around the world have time and again cautioned investors to stay away from it. Thomas Carper, a senior United States Senator once remarked, “Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.”
No fundamental value
Legendary investor Warren Buffett had said in an interview to CNBC in 2014 that virtual currencies especially bitcoin is a “mirage”, adding that investors should “stay away from it”. In the same interview, Warren Buffett said, “It’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A cheque is a way of transmitting money, too. Are cheques worth a whole lot of money just because they can transmit money?… The idea that it has some huge intrinsic value is just a joke in my view.” Reiterating his belief on Bitcoins and cryptocurrencies, Warren Buffett told Marketwatch in October this year: “You can’t value bitcoin because it’s not a value-producing asset,” adding that it is a “real bubble in that sort of thing”.
Fraud
The rapidly surging price of virtual currency such as Bitcoin, without any underlying asset or value-base, has irked the top banker Jamie Dimon. “Bitcoin is a fraud and will blow up,” Jamie Dimon, the CEO of JPMorgan Chase, said earlier this year, adding, “The currency isn’t going to work.” He pointed out to the absence of an underlying monetary base to support its value. “You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart,” Jamie Dimon said.
Bubble
Renowned investor Jim Rogers, sometimes referred to as commodities guru, too has sounded a note of caution on the prospects of cryptocurrencies, preferring to stay away from them for now. “I wish I was smart enough to buy cryptocurrencies.” Jim Rogers said in a recent interview with Kitco news. Further, Jim Rogers seemed to suggest that there might be a bubble building up in the cryptocurrency space. “It looks bubblish when you see the kind of price we see in bitcoins,” Jim Rogers said, adding that he doesn’t own any of the cryptocurrencies. “I certainly don’t know which one will come out on top, or if anyone comes out on top. But, I don’t own any.”
