Japanese report says Bitcoin Futures did not pop the 2017 crypto bubble

In an updated report, Japanese researchers Takahiro Hattori and Ryo Ishida dispute the link between the introduction of the Bitcoin futures market and the decline in Bitcoin prices.

Did CME Futures pop the 2017 Bitcoin bubble?

On December 17, the day that Bitcoin hit its zenith at $19,511, the Chicago Mercantile Exchange launched its Bitcoin futures trading. The price of Bitcoin then began to fall. Some market commentators including The Federal Reserve of San Francisco believe the introduction of the futures market was responsible for the drop in the price of Bitcoin.

However, according to the report, Did the Introduction of Bitcoin Futures Crash the Bitcoin Market at the End of 2017?, a significant amount of short sellers in the Bitcoin futures market would cause a decline in spot market prices in the short term only.

Daily trade activity for futures and spot market prices were matched to see if there was any correlation between trade and price, and the results show that despite the possibility for an increase in futures trading to have a negative impact for around 10-20 minutes immediately after the event, it did not have a significant impact after that time.

Furthermore, the report argues that if the introduction of futures was linked to the price decline in the spot market, there would need to be sufficient arbitrage between the spot price and futures price. The paper concludes that while the introduction of Bitcoin futures could negatively affect the Bitcoin price in the short term, it has a neutral effect in the long term. Therefore, the authors suggest that the introduction of Bitcoin futures did not crash the Bitcoin market at the end of 2017.

SMARTVALUE launches blockchain-based ID platform

Also in Japan, SMARTVALUE, a Japanese mobile company, has launched GaaS, a blockchain-based ID platform. GaaS is designed to digitize administrative services and procedures. SMARTVALUE also announced the launch of POTAL, a portal site designed to provide administrative services online, in Kaga, Ishikawa, where the company has been jointly promoting a blockchain city project. The value of SMARTVALUE’s stock price jumped following the announcement.