Bitcoin was one of the biggest newsmakers in 2017. The cryptocurrency started the year off trading below $1,000 and then it skyrocketed. On Dec. 28, bitcoin was trading just below $14,000, according to digital currency exchange Coinbase.
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While the cryptocurrency has rallied – it hasn’t been a smooth path. Bitcoin has been subject to volatile price movements and has been met with controversy every step of the way.
JPMorgan Chase & CO. CEO Jamie Dimon called bitcoin a “fraud” while numerous economists have said bitcoin is a bubble that will burst. But, even as bitcoin’s opponents continued to line up, the cryptocurrency continued its volatile trajectory upward.
Even if bitcoin is a ticking time bomb, the investment has recently become a little more legitimate. On Dec. 11, the CBOE launched a bitcoin futures contract. The CME launched its bitcoin futures contract on Dec. 18. Bitcoin prices climbed on the knowledge alone that trading would kick off on the CME and CBOE.
The listings on the exchanges are a great sign of maturation of an up and coming market,” Adam White, Vice President & General Manager of Coinbase told FOX Business.
Bitcoin futures climbed when they debuted on the CBOE while the CBOE noted that heavy traffic on their website impacted the website’s performance. Despite slow processing, a CBOE spokesperson told FOX Business in a statement that “All trading systems are operating normally.”
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Coinbase has also had some issues with its website in early December. Coinbase saw $2 billion worth of bitcoin changing hands on Thursday, Dec. 7. “A year ago, in a day, we would normally see less than $100 million across all cryptocurrencies,” Adam White told FOX Business.
The increase in interest in cryptocurrency comes as the ability to trade futures through the exchanges could boost interest from institutions. Coinbase started scaling up their product at the end of last year and a number of new customers noted that now, there is a lot of interest from large financial institutions.
Coinbase said many institutions are not ready – and they will help institutions trade, allow access and hedge risk. That being said, in early December Coinbase had an issue due to volumes, causing some delays. Also in early December, Nicehash announced it was hacked and that it had lost more than $78 million-worth of bitcoin.
While bitcoin has had a blockbuster year, the big question is, where will it go from here?
FOX Business asked White what he thinks about bitcoin’s price, if the rally can continue. He noted that “This is a new, highly speculative and volatile investment and investors should go in eyes wide open. For Coinbase, we are not only looking at the price of bitcoin – we are looking at how many new wallets? How much interest? But ,the current trajectory of growth for bitcoin is not sustainable – the question is how to fairly value.”
White is very optimistic about blockchain technology, saying that it will change the existing financial system. Even bitcoin’s harshest critics have a similar sentiment. As FOX Business reported, in “Shun Bitcoin, Invest in Blockchain,” Jamie Dimon is even positive about the future for blockchain technology.