Bitcoin Sell-Off Caused by Futures Expiring – Tom Lee

Some of the weakness seen in bitcoin over the past week was likely caused by futures contracts reaching their expiry date, according to Tom Lee, Head of Research at Fundstrat Global Advisors.


Join in the fun and play on the world’s First Hybrid on-line Casino with BTC and Fiat currency payments. Check on-line for latest promotions.


In a report released on Thursday, Lee blames the sell-off on “significant volatility” around futures expiry dates on the CBOE and CME futures marketplaces. He further cites a theory by Justin Saslaw, cryptoasset investor at Raptor Capital Management, that says bitcoin seems to fall as the related futures are nearing their expiry date.

“Bitcoin sees dramatic price changes around CBOE futures expirations… We compiled some of the data and this indeed seems to be true,” Lee wrote in the report.


Don’t forget to join our Twitter channel for Crypto, Business & Technology news delivered to you daily.


Furthermore, Lee explained that the inflow of new capital to the crypto market this year has been insufficient to make up for the new supply coming from initial coin offerings (ICOs), mining rewards, and outflows due to capital gains taxes.

Increased volatility in the underlying markets when futures contracts expire is a well-known phenomenon from stocks and other traditional financial markets. There have been six expirations since CBOE launched their bitcoin futures, with the most recent expiry being on Wednesday June 13.

Bitcoin has taken a strong hit this past week, trading down from about USD 7,500 last Sunday to a low of USD 6,135. On Thursday, bitcoin saw a strong rebound and is trading at around USD 6,600 at press time.



Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author: Fredrik Vold
Image Credit