Crypto Chaos - Bitcoin Price Swings Signal Futures Fiasco Ahead Of Launch

Take your pick as to what price you think Bitcoin is trading at this morning...

After an utterly shocking day yesterday with Bitcoin prices soaring towards $20,000 intraday on some exchanges, the true chaos of the cryptocurrency is unveiled ahead of Monday's futures launch.

GDAX shows bitcoin trading up to $19,697 yesterday before plunging to $13,788 and then rebounding...

GDAX is flashing $15,500, BitStamp is signaling a plunge to $14,500, and Bloomberg's aggregate price is around $15,000 - all of which are well down from yesterday's GDAX-based $19,600 record highs as all the fears of margin clerks were realized amid yesterday's chaotic run.

As Bloomberg reports, the cryptocurrency’s eye-popping rally would have triggered so-called circuit breakers on seven of the past 10 days, pausing or even halting trading to ensure an orderly session, based on rules planned by exchanges.

CME Group stipulates a two-minute trading pause if the price of the contract rises or falls 7 percent from the prior day’s settlement price. There’d be another two-minute pause if the gap widened to 13 percent. No trades can occur at prices higher than 20 percent from the settlement.

Thursday would’ve been wild. The 7 percent threshold hit less than two hours after the session started. A few hours later 13 percent fell. Around 10:15 a.m., the 20 percent cap was hit and held for about an hour. And the price popped above that level at least six other times over the rest of the day.

Cboe Global Markets has its own rules, halting trading for two minutes if prices rise or fall 10 percent, and for five minutes at 20 percent. Cboe futures are set to start Sunday, while CME targets Dec. 18.

Here is what the chaotic trading would have looked like in the last two days...

 

One thing of note is that as Bitcoin slides today, Ethereum is bid (up 6% vs Bitcoin's 3% decline)...

While yesterday saw Mike Novogratz confirming: "This feels like what a speculative top feels like..."

“The only reason I’m not sure -- and it might be the top for a short period of time -- is that it’s a big world, and the market cap isn’t nearly big enough for it to be the top of the whole system."

CoinTelegraph reports, Stefan Ingves, governor of Sweden's Riksbank and the chairman of global regulators at the Basel Committee, has warned investors that the risk may be huge. According to the regulator, investing in Bitcoin is a dangerous endeavor.

The banking regulator stressed that investment in things that rise wildly is generally not a good idea, given the nature of investment generally. He said that the future of cryptocurrencies and the traditional banking world are not particularly linked, and made it clear that legacy banking was not a thing of the past. He said:

"Let me also stress that sometimes there is a bit of a hype when people talk about fintech, thinking that old-fashioned banking is going to go away. But I don't think that is going to happen because regardless of the technology available, in most countries we have had banks for hundreds and hundreds of years and most likely it is going to continue that way.”

Still, we leave you with Novogratz' perspective

"Bubbles don’t end until the buyers are all in, until there’s leverage and there’s no leverage in this system yet..."

 

“I think that’s what you wait for."

Still, he’d like to see some of the volatility of trading bitcoin dissipate.

“I hope it calms down a bit just to give people a chance to breathe," he said.

 

“Market participants can’t keep up with the frenetic pace."

However, Mark Yusko notes "you are here"...