Bitcoin Hits $70K For the First Time in More Than Two Years
Since its introduction in 2009 as the pioneering decentralized cryptocurrency, Bitcoin has experienced a tumultuous journey characterized by significant price fluctuations. Bitcoin's emergence marked the onset of the bitcoin era, although it took some time before the general public recognized the significance of digital currency.
According to Forbes, Bitcoin reached its peak and set a new all-time high in November 2021, reaching $68,789. However, since then, Bitcoin has struggled along with the rest of the market, declining to less than $16,000 by the end of 2022.
Despite fluctuations in the price of Bitcoin throughout 2023, the Bitcoin market witnessed a strong recovery, reaching around $42,809 by the end of the year.
According to Reuters, the cryptocurrency has witnessed more than 50% increase since the beginning of the year, reaching above $70,000 on 8th March 2024, its highest point in over two years.
Why Did Bitcoin Hit $70K For the First Time After 2-Years Hiatus?
Figure 1. Bitcoin Value Hitting Close to $69K on 4th March 2024 from Yahoo Finance
According to Reuters, the recent surge in bitcoin's price can be attributed primarily to the heightened inflow into BTC spot ETFs. The approval of the first United States spot bitcoin ETFs by the U.S. securities regulator on 10th January marked a significant milestone for the cryptocurrency and the broader crypto industry, which had sought such a product for over a decade.
Reuters highlighted a slowdown in outflows from Grayscale Investment's Grayscale Bitcoin Trust (GBTC.P), which recently received approval from the U.S. Securities and Exchange Commission (SEC) to convert to an ETF.
The report noted that while GBTC experienced a cumulative outflow of $415 million last week, BTC Spot ETFs saw a total net inflow of about $1.2 billion during the same period, marking the highest weekly inflow since their launch.
Analysts at Bernstein anticipate that flows into the new ETFs will gradually increase to surpass $10 billion by 2024, while Standard Chartered analysts suggest that these products could attract $50 billion to $100 billion in investments this year alone. Some analysts project inflows of $55 billion over the next five years.
Additionally, market attention is focused on seven pending applications for ETFs tied to the spot price of ether, with the SEC expected to deliver final decisions on several proposals by May.
Investors are also eagerly anticipating the upcoming bitcoin "halving" expected in April, a process designed to reduce the release of new bitcoins. Bitcoin has historically rallied following previous halvings, including the most recent one in 2020.
Reuter’s report emphasized the significance of the fourth bitcoin halving, an initial Fed interest rate cut, and the potential approval of Ethereum spot ETFs, noting their importance for what is considered the smallest, youngest, and most retail-dominated asset class.
What are Bitcoin Futures & How Does Bitcoin Futures Work?
Bitcoin Futures are financial contracts that allow traders to speculate on the future price of Bitcoin without having to own the cryptocurrency itself. These contracts are standardized and traded on various exchanges, with each contract representing a specified amount of Bitcoin.
Bitcoin futures offer traders the opportunity to profit from both rising and falling Bitcoin prices, and they are often used for hedging against price fluctuations or for gaining exposure to Bitcoin's price movements without holding the actual asset.
Another trading strategy that has gained considerable acclaim is Cross Arbitrage Trading. This strategy capitalizes on price differences of an asset across various markets to generate profits through arbitrage oppotunity.
This approach can be applied to various commodities futures, including Refined Copper arbitrage trading and Rubber Cross-arbitrage trading. It can also be applied to Crypto Cross-Arbitrage Trading, particularly for Bitcoin Futures.
Click here for the Guide for QFI Cross Arbitrage Opportunity.
Types of Bitcoin Futures
Traders can trade Bitcoin Futures from both the Chicago Mercantile Exchange (CME Group) and ICE Futures Singapore (ICE SG) through Orient Futures Singapore.
CME offers 2 types of Bitcoin futures under the CME products – CME Bitcoin Futures and Micro Bitcoin Futures.
Micro Bitcoin futures offer an efficient and cost-effective method to adjust your exposure to Bitcoin, with each contract representing 1/10th the size of a single Bitcoin. These contracts allow traders, regardless of their capital, to effectively manage their exposure to Bitcoin price fluctuations while benefiting from the features of standard Bitcoin futures (BTC).
ICE SG offers BAKKT® Bitcoin (USD) Cash settled Monthly Futures, which offers a simplified trading experience, as the contract is settled in cash rather than the physical delivery of Bitcoin.
The Asia Pacific Exchange (APEX) also provides Bitcoin BTC Perpetual Futures.
These Bitcoin Futures contracts provide traders with diverse avenues to either speculate on Bitcoin's future value or hedge against price volatility.
Bitcoin CME Futures Contract Specifications
The CME Chicago Bitcoin Futures Contract has the following specifications:
The CME Bitcoin Futures Contract has a contract unit of 5 bitcoins, with the following minimum price fluctuation of $5.00 per bitcoin ($25.00)
Monthly contracts listed for 6 consecutive months, quarterly contracts (Mar, Jun, Sep, Dec) listed for 4 additional quarters and a second Dec contract if only one is listed.
Trading terminates at 4:00 pm London time on the last Friday of the contract month.
CME Trading hours (CME Globex) is as follows:
Sunday - Friday 5pm – 4pm Central Time (CT) with a 60-minute break each day beginning at 4pm.
CME Globex Bitcoin Futures symbol: BTC
Click here to find out about the CME Micro Bitcoin Futures Contract Specifications.
ICE SG BAKKT® Bitcoin (USD) Cash settled Monthly Futures Contract Specifications
The Bakkt Bitcoin Monthly Futures Contract has the following specifications:
The contract size for the Bakkt Bitcoin Futures Contract is 1 Bitcoin, with a minimum price fluctuation of $2.50 per bitcoin /contract, and a minimum block trade of 10 lots.
The last trading day of the contract month is 2:30 PM Eastern Prevailing Time (EPT) on the same day on which the equivalent IFUS Bakkt Bitcoin(USD) Monthly Futures Contract expires.
Contract months are up to 12 consecutive contract months.
Trading Hours are from Monday to Friday, at these trading hours:
9:00 am – 07:00 am (Singapore time sgt)
BAKKT Bitcoin Contract Symbol: BMC
Cryptocurrency Scams
While investing in Bitcoin comes with its share of rewards and risks, traders need to be more vigilant to avoid Cryptocurrency Scams and Forex Scams. Traders should only trade with regulated brokers that are registered with the appropriate regulatory authorities. It is important to note that legalized brokerage firms are subjected to the stringent assessment of regulatory organizations.
In Singapore’s context, trusted brokerage firms should be MAS regulated forex brokers like Orient Futures Singapore. Click to find out what a regulated broker is.
To learn more about Cryptocurrency and Forex Trading Scams, including Forex Scams list, refer to the articles here:
How to Prevent Forex Trading Scam in 2024?
4 Common Forex Trading Scams in 2023
5 Notable Forex Scams That You Can Learn From
Start Trading With Orient Futures Singapore
Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide bespoke services to our professional clients, tailored to their corporate and individual needs. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
