Bitcoin’s price surges cause havoc with exchanges
Bitcoin enthusiasts were over the moon when their favorite virtual currency topped the scales at first $14k, then $16k and then $18k. Some platforms even had the crypto surpassing the $20k mark.
However, these phenomenal surges caused some major exchanges a few headaches as it resulted in site outages. Bitfinex had to deal with a denial-of-service attack, while Coinbase has a “minor service outage”. Gemini also had their fair share of issues, one of them not being able to process Bitcoin deposits.
However, a Coinbase representative said that a 20% price increase within a couple of hours is quite common when it comes to crypto.
This is just a bit of a bump in the road on Bitcoin’s journey to world domination. The currency has grown by over 1000% this year alone, starting 2017 off at just $1k.
Now might not be the best time for site issues though. The popularity of Bitcoin is set to increase as major financial institutions launch their Bitcoin futures contracts. CBOE is first on the futures train, starting their trading on the 10th of December. Next is CME on the 18th of December, and then Nasdaq next year.
CBOE and CME will turn to Gemini and Coinbase for their price estimates, putting the pressure on for these exchanges to ensure that there are no technical glitches on their platforms.
Previously, these institutions had an issue trading crypto due to certain regulations. However, because futures contracts allow for trading on the price of Bitcoin and not actually buying Bitcoin, this issue is no longer a problem.
Countering crypto enthusiasts, the Futures Industry Association cautioned that these futures “did not allow for proper public transparency and input”. In addition, some industry professionals are concerned that Bitcoin’s trademark unpredictability is a massive investment risk.
However, others believe that Bitcoin futures is a great way to encourage mainstream adoption. This is because potential investors will not have to buy the increasingly expensive actual Bitcoin, they can just hedge their bets on its future price. This opens up a whole new avenue to people who want in on the action, but who are still apprehensive of the crypto market’s volatility.
It seems like these new developments, in both price and interest from well-established names, are ushering in a new era for Bitcoin and cryptocurrencies in general. Also, with predictions of Bitcoin reaching the $50k mark by next year, trading in futures offers a more affordable option to getting in on the Bitcoin action.
Author : Jack Dean