Bitcoin Price Rebounds to $10,500 After Dipping Below $9,000
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Earlier today, on December 2, the bitcoin price recovered to $10,500, after dipping below $9,000 on November 30.
Since November 1, within a one-month span, the bitcoin price demonstrated a staggering 42.8 percent increase, from $6,000 to $10,500. Analysts expected a major price correction to occur in the cryptocurrency market, given that the value of other leading cryptocurrencies such as Ethereum and Bitcoin Cash have increased substantially along with bitcoin.
Historically, the price of bitcoin tends to follow a trend in which it achieves a new all-time high, suffers a major correction, but rebounds to its previous all-time high and prepare for new rallies. A same trend has been demonstrated by the bitcoin price development over the past few days, given that bitcoin’s value surpassed $11,000, dropped to $8,800, and recovered to $10,500.
Correction Creates Healthy Uptrend
A major correction of the cryptocurrency market creates a healthy uptrend for most leading cryptocurrencies like bitcoin, as the market stabilizes and investors initiate a new rally. Hence, after the $8,800 dip, the bitcoin price is at a better and more stable position to sustain upward momentum and surge in the short-term.
Earlier today, the $51 billion financial institution CME Group, the world’s largest options exchange, has announced December 18 as the official launch date of its bitcoin futures exchange. In previous interviews, CME Group executives stated that the December 11 date was mistakenly leaked, and it was never the company’s intention to launch its bitcoin futures exchange by that date.
In an official press release published on December 1, CME Group reaffirmed that its US Commodities and Futures Trading Commission (CFTC)-regulated bitcoin futures exchange will launch on December 18.
“We are pleased to bring Bitcoin futures to market after working closely with the CFTC and market participants to design a regulated offering that will provide investors with transparency, price discovery, and risk transfer capabilities,” said Terry Duffy, CME Group Chairman and CEO.
The entrance of CME into the bitcoin market will lead to an increase of bitcoin’s liquidity as a widely recognized store of value and digital currency. Following CME’s bitcoin futures exchange launch, several large-scale hedge funds will commit to investing in bitcoin, including the $95 billion Man Group.
Billions of dollars will flow into the bitcoin market by the year’s end and consequently, it will likely create a domino effect across all major exchanges. Casual investors and traders will rush to invest in bitcoin, leading a short-term surge in the price of bitcoin.
It is likely that the price of bitcoin will sustain throughout the first half of 2018 as well, given that Cantor, Nasdaq, and other major financial institutions will also integrate bitcoin futures by early 2018.
Bitcoin Vs. Gold
Bitcoin currently amounts for less than 3 percent of the global gold market. But, the value of gold has been on a decline over the five years, and the definition of a safe haven asset clearly depicts that safe haven assets either increase in value or remains stable. Hence, considering bitcoin’s transportability, fixed monetary supply, and decentralized structure, bitcoin is a better safe haven asset than gold.
As more institutional investors enter the bitcoin market, investors from the gold market will likely migrate to the cryptocurrency market alongside hedge funds, investment banks, and retail traders.
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