Bitcoin soars past $13,000 as futures move closer to reality

The value of Bitcoin exceeded $13,000 and quoted at $13,140 with a rise of over 10 per cent on Wednesday, before going down to $12,900 on international bitcoin exchanges. The level of $13,000 was seen for the first time amid speculation that the widespread use of futures will help lead to digital currencies being viewed as a legitimate asset class for mainstream investors.

Bitcoin itself now has a market cap of more than $200 billion with the cryptocurrency market cap at $377 billion, in which the share of bitcoin has increased from 55 per cent a few days ago to 57.6 per cent, indicating that bitcoin is rising faster than other crypto currencies.

On Zebpay, India’s largest bitcoin exchange, the price quoted was Rs 9.44 lakh, which corrected at the time of writing to Rs 9.22 lakh. This price is still lower than the Rs 10 lakh, which was seen two weeks ago, when bitcoin for the first time touched $11,000 in international markets. The price correction in India price is due to increased inflows, taking advantage of huge arbitrage due to premium.

Now premiums have come down to 10 per cent from nearly 40 per cent two weeks ago.

Bitcoin has been the largest cryptocurrency by market value. Its price at the beginning of 2017 was less than $1,000 and it went up 13 times as optimism climbed for the distributed ledger technology known as blockchain, which is at the heart of bitcoin.

The price surge has been accompanied by growing warnings that the speculative frenzy is an asset bubble poised to burst. Two leading Noble prize-winning economists have criticised it while one of the biggest critics of bitcoin, a US-headquartered investment bank, has decided to offer broking services to clients when bitcoin started trading on US-based futures exchanges.

Cboe Global Markets Inc. has said it will start trading bitcoin futures on December 10, while CME Group Inc.’s contracts are set to debut on December 18. Nasdaq Inc. is planning to offer futures in 2018, according to a person familiar with the matter. Cantor Fitzgerald LP’s Cantor Exchange is creating a bitcoin derivative, and startup LedgerX already offers options.

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With inputs from agencies