Not the first time we’re hearing this statement about Bitcoin’s price going down yet. This time it’s from a Japanese famous economist, Yukio Noguchi who is also an advisor to Waseda University’s business and finance research center. According to Yukio, it is very unlikely that the prices of Bitcoin will surge once more.
In fact, Yukio has constantly been on the issue for long writing several articles as well as books and in both cases, he clearly explains the trend this giant cryptocurrency is taking.
The Real Reason Why the Price Surge is Unlikely
Current the price of Bitcoin is at its lowest, in fact, 1/3 of what it stood towards the end of last year when it hit its highs. From that scenario plus the fact that trading on Bitcoin futures is now possible, then it will be hard to see bitcoin’s price surge again.
The famous economist draws his argument on the basis of the futures market whereby he states that their introduction has considerably reduced the price. At the start of the year, Yukio made it public that the selling of bitcoin futures led to the drop in the prices. This argument received some backing from the San Francisco Federal Bank that as well suggested introduction of Bitcoin futures basically caused the drop in price.
On a paper “How Futures Trading Changed Bitcoin Prices” published by the Federal Reserve Bank of San Francisco on May 7, it may not be a coincidence that the same time the trading on Bitcoin futures was introduced is the same time Bitcoin prices started on the downward trend.
The post reads that the price dramatically climbed to almost over $20,000 towards the end of 2017 from under $4,000 over the years from 2009. During the peak periods, Bitcoin futures trading were introduced and surprisingly there was a subsequent drop in the price of Bitcoin. Does it really sound like a coincidence?
In addition, there is a situation in the market that will allow short-selling Bitcoin futures which will as well play a big role in pulling down the prices. This possibility of investors making money form short-selling makes Yukio believe that there is almost a zero chance of the prices making a U-turn rather he insists that many of the investors have a similar prediction of the price falling yet.
Another reason is the branching off the cryptocurrency which makes most people develop a feeling that they can obtain for free a new cryptocurrency and hence the price will continue on the downward trend.
General result in Bitcoin’s popularity
The feeling for most people may be that it is a negative thing for Bitcoin but according to Yukio, it is a win-win for the cryptocurrency. While Bitcoin’s price is dropping, more will become attracted to it for sending money as it will prove to be cheaper at the current price sending through a regular bank than Bitcoin.
Nevertheless, reasons are really there suggesting Bitcoin’s price may not be on the rise any time soon but with the crypto market nothing is assured only time will tell.