Bitcoin Price Surpasses $16,000 After Christmas Crash

| Updated
by Bhushan Akolkar · 3 min read
Bitcoin Price Surpasses $16,000 After Christmas Crash
Photo: Zach Copley / Flickr

After a major slump and correction, Bitcoin price pulls back giving a major relief to investors.

After a sloppy performance with almost a week of correction, Bitcoin is back again on an upward journey as the cryptocurrency has climbed by over 16% in the past 24 hours and is currently trading above $16000, to be precise $16239.80, according to CoinMarketCap.

This is the first ever considerable jump in Bitcoin price, ever since the Bitcoin and the overall cryptocurrency markets entered a major correction just in two days after the launch of CME’s Bitcoins futures contracts. Just before entering the correction, the overall crypto market was on a full swing with several altcoins like Litecoin, Ethereum, and Ripple contributing to the rally. During that time Bitcoin price surged for the first time above $20,000 and the overall market valuations crossed the $600 billion mark.

The latest gains have provided a minute’s rest to the investors especially after the five-day slump wherein Bitcoin corrected by more than 40% from its peak in just a week’s time. Although this rally provides a major relief, a lot of questions have been raised regarding the extremely volatile nature, which cryptocurrencies continue to uphold.

In a Bloomberg View column written today, Mohammed El-Erian writes:

“The most important question facing it is whether the recent price correction will prove to be what market participants refer to as ‘healthy’.”

In other words, one that shakes out “excessive irrational exuberance, provides for the entry of institutional investors, encourages the development of market-deepening products, and widens and balances out the investor base and the product offering,” he said.

Following the launch of Bitcoin futures, we have also seen major institutions like NYSE and CBOE filing a proposal with the SEC (Securities and Exchange Commission) to start trading of Bitcoin Exchange Traded Funds (ETFs). Bitcoin ETFs have been a long talked about subject within institutional investors and its trading will be dependent on the momentum in Bitcoin futures. They won’t be tracking the movements in the Bitcoin price neither will the ETFs hold the currency in any case.

The previous proposals for Bitcoin ETFs have received several rejections from the SEC, but now since the Bitcoin futures are already live, there is a higher probability that SEC might consider for this investment product soon. Moreover, many influential financial institutions have also lined-up different Bitcoin-related investment products to be launched next year. These products are expected to bring a lot of legitimacy and stability into the volatile cryptocurrency markets.

Recently investors have been expressing regular concerns regarding the volatile nature of digital currencies and, hence, regarding their potential to be considered as a store of value. However, a few investors and crypto enthusiasts believe that this scenario will change over a period of time.

2017 has so far proved to be a great year for cryptocurrency markets, especially the second half of 2017. Moreover, many big financial institutions and a wide area of businesses are getting resonant with the potential applications of blockchain technology . Next year we will highly likely see far more development within the cryptocurrency and blockchain space.

Bitcoin News, Cryptocurrency News, News
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