Opinion: halving will not increase the price of bitcoin due to the influence of the derivatives market

Meltem Demirors, chief strategist at the investment company CoinShares, suggested that the emerging marketDerivatives will not allow the price of Bitcoin to grow after the May halving.

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“For the first time, Bitcoin has a reliable derivatives market (futures, options). Many firms wishing to speculate on BTC will trade derivatives rather than underlying assets. ”

According to her, Bitcoin is a “digital exchangecommodity ”, and during the heyday of the derivatives market,“ manufacturers lose their ability to influence pricing. ” In the case of oil, for example, production volumes are inversely correlated with futures trading activity.

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“The derivatives market is a strange beast. Take oil, for example. The graph shows what happened to this market over the past 20 years. Derivatives dominate trading. Most firms trade in paper contracts, speculating on the price of oil. The market is driven by speculation "

According to Demirors, the field of crypto derivatives is rapidly developing: first, the BitMEX exchange appeared, then the giant CME mastered bitcoin futures, and now “hundreds” of companies enter this market.

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“As bitcoin becomes an investment asset, its price is increasingly detached from its intrinsic value, as well as from the ratio of supply and demand.”

The CoinShares representative also believes that as they enter the “big game”, bitcoin is increasingly correlated with world markets.

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Bitcoin and the derivatives market are contradictory things, Demirors believes. Nevertheless, derivatives based on cryptocurrencies are rapidly gaining popularity, and this should be taken into account.

Earlier, Iterative Capital partner Leo Zhang expressed the opinion that the upcoming halving will hit the miners and the lending market.