Rushing to the Beginning Bitcoin Futures and Virtual Private Money

12/21/2017 10:18 am EST

Focus: CRYPTOCURRENCY

Robert Savage

Partner & CEO, CCTrack Solutions

All this makes how the cryptocurrency world works in the weeks ahead important as it foreshadows the patience of central bankers and governments to live with bubbles they created in bonds, credit, real estate and equities, writes Bob Savage, CEO of Track Research.

We have all done it before, read the last chapter of the book after the first 100 pages. We rush to the ending because the middle is boring and the search for who did it really is more important than the meandering of the plot.

Books can be difficult, like markets.

We are rushing in the last full trading week of 2017 with plenty of significant events, but none will likely proffer the same clarity and button the value or growth for 2018.

The week just passed had enough drama to wash out some of the most nervous but the sheer power of speculation has no better ally than bitcoin. The S&P 500 (SPX) is a poor cousin in comparison.

All this may be coming to an end with the start of bitcoin futures (BTC) trading last weekend.

But it's not so simple and the plot twist here matters as futures allow leverage to a product already explosively bid up. Futures also allow for a more certain "shorting" process in a virtually long-only product.

All this makes how the cryptocurrency world works in the week ahead important as it foreshadows the patience of all central bankers and governments to live with bubbles of their own creation in bonds, credit and real estate, not to mention equities.

A bitcoin hedge fund's return: 25,004% (that wasn't a typo).

The issue for everyone is when will such speculation matter to the actual running of the global economy? When will bitcoin or real estate or stocks actually promote instability and bring about a policy change?

Bitcoin not a threat to financial stability, say European economists.

The standout number for the U.S. may be the sub-prime mortgage risk from 2007 which at $350bn was considered modest and not enough to matter except for the linkages to all other parts of the mortgage markets - and that is where we should start to understand the rushing to the end of 2017 and the beginning of reality for private virtual money.

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