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South Korea Says No To Bitcoin Futures

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South Korea Says No To Bitcoin Futures

Bitcoin upward momentum faces its biggest test yet in the coming weeks. After rising to record highs of $14,000, some of the world’s largest exchanges are planning to introduce Futures derivatives as a way of attracting more institutional investors into the game. However, it appears the move is not going well with some regulators around the world.

 Ban On Bitcoin Futures

South Korea’s Financial Services Commission has provided the clearest of indications that Bitcoin Futures won’t be allowed in the country. Such a move would be catastrophic for the cryptocurrency given that the country is one of the biggest markets for digital currencies.

In addition, South Korea is planning to start taxing any profits generated from cryptocurrencies, a move that may not augur well with investors. Bitcoin has for the better part of the year traded on speculation. Moves by regulators to adopt a more wary stance on the cryptocurrency is thus expected to send fear in the market, which could spook investors.

South Korea has for the better part of the year maintained a soft stance on cryptocurrencies. Something that has worked in favor of bitcoin sentiments among investors in the country. A ban on Futures trading would mark the first time that the country’s regulator has moved to maintain a strong oversight in the sector.

“It is the first time for the South Korean authorities to ban trading a specific item. It seems that they made such decision worrying about if it gets out of control as they haven’t taken a position on cryptocurrency,” An official from the securities industry said.

Deputy Prime Minister and Minister of Strategy and Finance, Kim Dong-yen says the latest effort is not intended to crack down the sector but instead provide more consumer protection. The Minster says they are approaching the matter with caution, given that impractical policies could lead investors to unregulated over the counter markets which are hard to oversee.

 U.S Bitcoin Futures

The Asian nation banning Futures trading has however had little impact on Bitcoin sentiments so far. This is in part because the void is poised to be filled by exchanges in the U.S. The CBOE and the CME Group are set to start offering Futures derivatives before the end of the year. NASDAQ, a well-known tech exchange is also set to offer Futures exchange sometime in the summer of next year.

Talk of Futures contracts in the U.S is the latest catalyst that has driven bitcoin to record highs. The derivatives are expected to attract mountains of cash from institutional investors who until now have not been able to get more skin in the game.

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Image courtesy of Patrick Rodwell via Flickr

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Bitcoin

Bitcoin Price Could Get Extremely Ugly – Barrons

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Bitcoin (BTC/USD) price recent rebound has faded and its easy to see why. After soaring to a two-month high of $21,470, Bitcoin has pared back some of those gains to trade at $20,895. This decline is mostly because of the fundamentals and technicals of the coin as I will explain below.

Bitcoin Fundamentals

The main fundamental reason why Bitcoin is pulling back is the rising fears of a recession. A recent survey by WSJ placed the risk of a recession in the US at 61%. That is notable since it is the highest the figure has been in months. 

At the same time, Wall Street banks like Goldman Sachs, Citigroup, and Wells Fargo published weak financial results. Most of them said that their profits tumbled by more than 30% in the final quarter of 2022. Reading between the lines shows that most of them have allocated millions of dollars in credit loss provisons.

Historically, these provisions tend to rise when there is a fear of a recession. At the same time, many safe American companies have starte announcing substantial layoffs recently. Amazon is laying off 18,000 people while Microsoft, Salesforce, Meta Platforms are laying off thousands of workers. In a note, an analyst at Oanda said:

“Bitcoin prices are weakening as growth fears have Wall Street worried a…

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Bitcoin

2 Reasons Why Bitcoin Price is Soaring in 2023

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Bitcoin price has staged a strong comeback in 2023 as investors rushed to buy the dip. The BTC/USD exchange rate surged to a high of 21,465, the highest level since November. It has risen by more than 30% from the lowest point in 2022. Here are the top reasons why BTC price is soaring.

Mild recession hopes

Bitcoin and other financial assets like stocks and gold have rallied because of the falling inflation in the United States and around the world. Consumer inflation dropped from 7.1% in November to 6.5% in December. Core inflation dropped to 5.7%. 

And on Wednesday, data from the US showed that wholesale prices dropped by 0.5% in December, higher than the expected 0.1%. The producer price index (PPI), rose by 6.2%, the lowest level since March 2021. This decline happened because of the falling energy prices.

Another data showed that retail sales tumbled in December. They dropped by 1.1% in December, the biggest decline in 2022. In a note, an analyst at RSM said:

“The lag impact of elevated inflation weighs heavily on U.S. households, it’s very clear that the median American consumer is still reeling from the loss of wages in inflation-adjusted terms.”

A recession is often seen as a bad thing. But in the financial assets, it can be seen as…

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Bitcoin

Bitcoin Price is Getting Severely Overbought: Is it a Buy?

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Bitcoin price made a spectacular comeback in the past few days as investors reflect on encouraging data from the United States. The BTC/USD exchange rate surged to a high of $21,365, the highest point since November. It has risen by more than 35% from the lowest level in November. So, is the tide turning?

Will the Fed pivot?

Bitcoin and other global assets continued surging as investors reacted to the latest American economic data. Data published last week revealed that the American consumer inflation inched downward in December. It dropped to 6.5% in December, the sixth straight month of decline.

A week earlier, data by the Bureau of Labor Statistics (BLS) showed that the country’s unemployment rate dropped to 3.5% in December. In the same period, wage growth increased by 4.7%, lower than the previous month’s 5.2%. A decline in wage inflation is a positive sign for Bitcoin and other financial assets because of the Federal Reserve.

The Federal Reserve has been in a strong tightening phase in the past few months as it continues its battle against inflation. Its goal is to soften the economy and prevent a hard landing. Such a situation will happen when wage growth eases. 

Therefore, Bitcoin has risen because of the rising chances that the Fed will start to pivot. Historically, Bitcoin and other…

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