Bitcoin futures could be hurting bitcoin's price

A Wall Street analyst known for his bullish stance on bitcoin has flagged the possibility that bitcoin futures contracts could be hurting the cryptocurrency’s price.

Bloomberg reports that Tom Lee, the cofounder of the research firm Fundstrat, said in a note last week that bitcoin futures contracts could be behind bitcoin’s recent “gut-wrenching” price declines.

Lee said in his report that there was “significant volatility” in bitcoin’s price around the expiration date of CME Group and Cboe futures contracts.

Both CME Group and Cboe launched bitcoin futures products in December, when bitcoin was trading close to record highs of about $US20,000. Bitcoin has tumbled since then. Bitcoin was down 0.35% against the dollar to $US6,438.56 a coin as of 8:45 a.m. BST (3:45 a.m. ET) on Monday.

Bloomberg reports that Lee wrote that traders who are long bitcoin and short futures could sell bitcoin during the price auction to cause the price to drop and leave their futures contracts “with a handsome profit.”

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Source: Bitcoin futures could be hurting bitcoin’s price | Business Insider