The price of the world’s largest cryptocurrency Bitcoin has risen to a new record high of $20,000 as it regained its upward trajectory in the past 24 hours. The price rose by over 10% reaching a new high from a low of $17,200 where it had traded for the past few days. This upward trajectory was also reflected in the other crypto currency prices which also roared ahead. Ethereum Classic was up by over 15% whilst Dash roared ahead to a new high of well over $1,000 breaking a psychological barrier. Ethereum and Litecoin were also up by double digit figures reaching highs of $320 and 750$ respectively before easing slightly back. Ripple was the only loser but still remained at a relatively high price of $0.75.
CME’s Bitcoin Futures Listing on December 18
The global finance industry and bitcoin market are highly anticipating the launch of CME Group’s bitcoin Futures on December 18, especially after the successful debut of bitcoin futures on the Chicago Board Options Exchange (CBOE).
Purely based on daily trading volume, CBOE and CME will not surpass that of cryptocurrency exchanges and trading platforms in the short to mid-term. Over the past few days, the daily trading volume of bitcoin across major exchanges in regions including the US, Japan, and South Korea have reached $17 billion, a daily trading volume that is larger than most stock markets.
But, CBOE and CME enable institutional investors and retail traders to invest large sums of institutional money and capital in bitcoin. More importantly, upon the debut of bitcoin futures on the CME exchange, leading investment banks Goldman Sachs and JPMorgan are set to clear bitcoin futures on behalf of their clients.
Earlier this month, JPMorgan global markets strategist Nikolaos Panigirtzoglou, expressed his optimism towards the launch of CME’s bitcoin futures exchange. Panigirtzoglou emphasized that bitcoin futures will provide the cryptocurrency with more legitimacy and further validate it as an emerging asset class.
“The prospective launch of bitcoin futures contracts by established exchanges in particular has the potential to add legitimacy and thus increase the appeal of the cryptocurrency market to both retail and institutional investors,” said Panigirtzoglou.
He added that in the long-term, regulated instruments such as futures contracts will allow bitcoin to compete against traditional asset classes such as gold. Panigirtzoglou explained, “the value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”
Bitcoin is Nearing $20,000 With Very Little Institutional Money
Major hedge funds, investment firms, and financial institutions including Man Group, Goldman Sachs, and JPMorgan have anticipated the launch of CME since October and are committed to clearing bitcoin trades on behalf of their clients, investors, and customers.
Already, the price of bitcoin is nearing the $20,000 mark without a significant amount of institutional money invested in the bitcoin market. The daily trading volume of bitcoin is nearing the $20 billion without major regions such as India and South Korea properly regulated.
The massive inflow of tens of billions in institutional money in the upcoming months is expected to lead to a short and mid-term price surge. As Bitfury vice chairman George Kikvadze previously explained, it is more difficult for large-scale hedge funds and investment firms to commit to a certain asset class if it does not have sufficient liquidity and robust infrastructure surrounding it.
Bitcoin is beginning to see an increase and improvement of trading infrastructure in both the cryptocurrency market and traditional finance sector.
Cardano explodes upward – rises 130%
Within the past 24 hours, the price of ADA, Cardano’s native token, surged by more than 130 percent, from $0.22 to $0.52. The market valuation of Cardano surpassed the $13.5 billion mark, surpassing Dash and IOTA, nearing that of litecoin.
Earlier this month, CCN reported that the price of Cardano increased by more than 400 percent within a week because of the integration of ADA by leading exchanges including Bittrex and Binance.
According to CoinMarketCap, Bittrex is the largest cryptocurrency exchange in the global market with a $2.8 billion daily trading volume. The integration of a relatively new cryptocurrency by major markets like Bittrex and Binance immediately expose and introduce the global cryptocurrency exchange market to that particular cryptocurrency.
Specifically, the integration of Cardano by Bittrex expanded the potential market of Cardano to the entire trading platform and user base of Bittrex, providing immediate boost in liquidity. Prior to the integration of ADA by Bittrex, the Cardano blockchain platform garnered the attention of the cryptocurrency market with its proof-of-stake (PoS) consensus protocol.
Currently, several leading cryptocurrencies such as Ethereum are actively investing the possibility of integrating PoS consensus protocol through innovative solutions such as Casper. As such, the base PoS protocol of Cardano triggered the interests of Ethereum supporters and PoS enthusiasts.
Litecoin creator and former Coinbase executive Charlie Lee publicly expressed his concerns over the sudden price surge and rally of Cardano. He wrote:
“I just noticed Cardano (ADA) is #6 on CoinMarketCap. How did it become a $10B coin when it’s only 3 months old and the only major exchanges trading it is Bittrex and Binance and without even any fiat trading pairs? Either the market is crazy or Cardano will end world hunger.”
Lee emphasized that Cardano’s market cap does not represent its true value, given that the project is less than 3 months old. More to that, it is important to question the value of cryptocurrencies and blockchain networks based on their user bases and actual use cases. In the case of Cardano, is its blockchain network demonstrating the user base and usability of a $14 billion network?
“To be clear, I have nothing against Cardano or its tech. And I have a ton of respect for Charles Hoskinson and I’m sure the project has a ton of potential. But at 10B valuation right now, how can that possibly be a good value,” added Lee.
In the cryptocurrency market, a bull run or a strong rally is almost always followed by a bear cycle, especially if the market cap of a blockchain network is difficult to justify. The market valuation of Ethereum for instance was also criticized by experts over the past few months because its decentralized applications and ecosystem are struggling to achieve commercial success, despite being on a $69 billion network.
With any cryptocurrency, it is crucial to question the market valuation of its blockchain network and whether the current market cap can be justified with a wide array of indicators, such as user base, applications, and user activity.