A revolutionary turn in the opinion of official China regarding blockchain technology, mining and cryptocurrencies, asthis has already been called by many informationresources, in fact, is simply a statement of the very well-known thesis “if a phenomenon cannot be prohibited, then it should be organized and led.” China is making attempts to bring the blockchain and cryptocurrency sphere out of the shadows, as it is convinced that this can be very beneficial for the economy and the country as a whole. It is no secret that it was in China that mining reached its peak a long time ago, and the largest trading volumes on crypto exchanges are made by traders from the Celestial Empire. The potential of this industry is enormous even now, and China is not a country that will miss the opportunity to become a leader in anything.
With the advent of Bitcoin futures,the possibility of short selling the first cryptocurrency. From that moment on, Bitcoin became a full-fledged trading financial instrument and now has all the same characteristic features as traditional financial assets traded both on exchanges and in the over-the-counter market. More and more institutional investor structures are turning their attention to the cryptocurrency market. These structures require an effective and, most importantly, legal instrument to hedge their risks. For such investors, exchange-traded futures are an ideal instrument. The growth in futures turnover on exchanges, including the Bakkt exchange, indicates a commensurate increase in trading turnover on crypto exchanges where physical bitcoins are traded. In addition, the very presence of the possibility of short selling helps to improve trading liquidity and, thus, reduce excessive volatility in the price of Bitcoin.
What do you think? Is there a new “hype” of cryptocurrencies planned?
Vasily Barsukov (Chief Dealer WELTRADE)