Caution Lights Flash as Bitcoin Posts New Record High

Caution Lights Flash as Bitcoin Posts New Record High

Caution Lights Flash as Bitcoin Posts New Record High

$BTCUSD, $CBOE, $CME, $DB

Friday, Bitcoin marked another all-time high of almost $18,000 on the Bitstamp exchange, up 9% on the day, as caution warnings grew over the risks of investing in the highly volatile and speculative financial instrument.

Bitcoin is currently trading at: 17,716.0547, +382.699, or +2.21%As of 11:48p GMT, Market is open.

The cryptocurrency’s recent price rises, 1,700%+ YTD, have stirred worries that the market is a bubble that could burst in spectacular way.

Bitcoin has climbed almost 80% so far in December, putting it on track for its best month in percentage terms since December 2013.

Friday it reached as high as $17,900 BTC=BTSP on the Luxembourg-based Bitstamp exchange.

While Bitcoin has added 20% to its value since Monday, trading has been a bit calmer than the wild price swings the market has seen in recent weeks, with volatility lower since the launch of Bitcoin futures from Cboe Global Markets (NASDAQ:CBOE) last Sunday.

Market-watchers said Bitcoin’s price was being lifted by the launch of rival CME Group’s (NASDAQ:CME) Bitcoin futures contracts this Sunday.

“The hope (is) that futures signal the unlocking of institutional money into the digital arena and (that there will be) a rapid demand increase and ratification of the technology and its principles,” said the founder of industry website Cryptocompare.

But outside of the crypto market, worries are growing about the amount of money entering the space.

A study by Anglia Ruskin University, Trinity College Dublin and Dublin City University released on Friday said Bitcoin could pose a threat to the financial stability of traditional currencies and markets.

“Our evidence finds that the price of Bitcoin has been artificially inflated by speculative investment, putting it in a bubble,” said 1 of the report’s authors and a lecturer at Anglia Ruskin University.

“Although bitcoin is not regulated by governments, it could still have a knock-on effect on traditional markets due to the interconnectedness of cryptocurrency markets with other financial assets.”

Others say Bitcoin’s total market size at $300-B means the impact of any future price collapse would not be large enough to have a knock-on effect on financial stability.

Late on Thursday the head of Britain’s Financial Conduct Authority, Andrew Bailey, warned that Bitcoin buyers should be prepared for the possibility that they could “lose all their money”.

Outages on some of the world’s biggest exchanges this week, which left millions of investors unable to access their funds during periods when trading volumes are high, have also fueled concerns about the fragility of the market’s infrastructure.

Deutsche Bank NYSE:DB) is thought to be the 1st major European bank to open trading in Bitcoin futures.

Deutsche Bank did not immediately respond for our request to comment.

That being the case, we have been recommending  GBIT our favorite crypto-coin exchange, where professional traders and civilian participants alike can trade securely on the world’s most innovative digital asset exchange.

Click here to find out more.

Have a terrific weekend.

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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