Not even a fresh batch of bitcoin short sellers can slow down the cryptocurrency’s bullish momentum. The price of bitcoin surged once again on Sunday following the launch of bitcoin futures trading, but Loup Ventures analyst Gene Munster says he is seeing even more anecdotal evidence of a bitcoin bubble.
CBOE Global Markets (CBOE) launched bitcoin futures trading at 6 p.m. on Sunday evening, providing bitcoin bears their first opportunity to easily make short bets against the currency. But bitcoin bulls have once again outweighed the bears since the futures launch. The new bitcoin futures contract, which expires in January and trades under the ticker XBT, is up 16.2 percent overnight, and the price of bitcoin is up $1,000 to $16,571 on Monday morning.
Bitcoin has been one of the most divisive assets on Wall Street in recent memory. Bitcoin bulls argue that it could eventually join gold as a preferred global store of wealth. Bitcoin bears say the market exuberance surrounding bitcoin is textbook bubble behavior.
Munster says he recently experienced a real-life example of an old Wall Street adage: “When your barber gets in, it’s time to get out.”
Munster was recently asked how to buy bitcoin by his Uber driver. Munster says the experience should serve as “a cautionary one-off story that illustrates the bitcoin investor shift over the past year from tech futurist, to professional investor, and now the general public.”
Despite the short-term bullish trading in bitcoin following Sunday’s futures launch, Munster says futures trading is likely to be a net negative for the bitcoin’s price in the long-term as short sellers now have more ammunition. Munster says cryptocurrencies will play a meaningful role in the future of how consumers store and exchange money, but that value is likely not what’s driving bitcoin’s huge price surge.
“It’s more likely than not that bitcoin is in a bubble and the price of bitcoin will be extremely volatile, especially as more futures exchanges open,” Munster says.
The price of bitcoin has soared…
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