According to Fundstrat head of research Thomas Lee, the recent decline in Bitcoin (BTC) price is likely the result of the expiration of Bitcoin futures, Bloomberg reports June 14.
In a report, Lee explained that the “gut wrenching” weakness in Bitcoin (BTC), which dropped upwards of 20 percent earlier this week, was the result of futures contracts expiring.
Lee said the “significant volatility” is one of six expirations of Bitcoin that have happened since CBOE launched its futures contracts in December 2017.
Lee wrote: “Bitcoin sees dramatic price changes around CBOE futures expirations… We compiled some of the data and this indeed seems to be true.” According to Lee, Bitcoin usually sees a drop of around 18 percent in 10 days before futures expiration, with prices generally recovering by six days afterward.
Recently, Cointelegraph reported that US Commodity Futures Trading Commission (CFTC) has launched a probe into four major crypto exchanges Bitstamp, Coinbase, itBit, and Kraken that have been providing data for CME Group, which launched Bitcoin futures trading in December 2017.
Bitcoin experienced significant volatility in the days leading up to President Donald Trump’s inauguration on Jan. 20. The market saw sharp price swings the week before, with heightened activity from US traders during the weekend.
Rex has filed new ETF registration documents with the Securities and Exchange Commission, listing several cryptocurrency-focused funds, including a TRUMP ETF, a DOGE ETF, a BONK ETF, and others tied to assets such as Bitcoin, Ethereum, XRP, and Solana.
MicroStrategy has made headlines again by adding 11,000 Bitcoin to its portfolio, according to a Jan. 21 filing with the US Securities and Exchange Commission (SEC). This acquisition represents the firm’s biggest Bitcoin purchase of the year and extends its ongoing streak of weekly buys into the eleventh week.
Instead of being scared by the nonstop nature of crypto markets, investors should see it as an exciting opportunity to grow their portfolios — especially with the help of a skilled crypto advisor who can guide you through the complexity.
The market has been gearing up for volatility before the launch of spot ETH ETFs in the US today. While ETH’s price action has been relatively uninteresting in the past few weeks, it seems that large holders are expecting price swings and are rushing to cash out.
Institutions need to broaden their holdings of crypto holdings in order to capture the full range of innovation in the market, says Felix Stratmann, head of research at Outerlands Capital.
