Christopher Giancarlo, EX-Chairman, Commodity Futures Trading Commission (CFTC) shared an untold story on Monday. He was addressing the audience at the Pantera Summit, San Francisco. According to Giancarlo, Bitcoin futures were introduced in 2017 with an intention. And that was to discipline the soaring prices.
And we have every reason to believe him when it comes to Bitcoin.
While he was in-charge, the CFTC allowed the first bitcoin futures product. Giancarlo said that the SEC, the CFTC, the Treasury and the then NEC director acted as the catalyst. And once the futures were out, the bitcoin price bubble popped.
Giancarlo has been a crypto advocate always and is popular as “Crypto Dad”. Recently, he joined the advisory board at the Chamber of Digital Commerce.
Speaking at the SFO conference, he said, price surge was the first bubble after the 2008 financial crises. And the administration was wary of the bubble’s after-effect. They believed it could lead to financial crises like the real-estate bubble.
Administration leadership was of the opinion that institutional interest in Bitcoin could rein the price. And based on that the CFTC carried out all the procedures.
According to him, the introduction of the derivative’s disturbed price dynamics. And there is enough research to back his statement.
Optimists vs Pessimists
Furthermore, Giancarlo calls crypto is a “believers’ market.” He says price soared because of the price optimists. But the introduction of bitcoin futures created a price betting opportunity for pessimists. And this negatively impacted spot trading, hence the price witnessed downward pressure.
Prior to futures, the demand for Bitcoin was speculative. This one-sided speculation ended with the launch of bitcoin futures on CME by the end of 2017. But the prices did not drop overnight. That’s because it took time to attract institutional investors.
Giancarlo poised valid questions too. Particularly, he asked why did the administration take action only in case of a bitcoin bubble. And why did it act complacent when the real-estate bubble was ripening.
Do you have any other explanation as to what led to the sudden price crash in 2017?
Previously, we covered how the upcoming halving is going to impact the bitcoin price.