On December 12th bitcoin set another high of $17,615

(December 12)Bitcoin set another high today with CoinDesk recording an intra-day high of $17,615. Many analysts think that the rise could have been fueled in part by the launch of bitcoin futures last Sunday evening by Chicago Board Options Exchange (CBOE).

Other cryptocurrencies such as litecoin are also showing a surge in popularity. Bitcoin is up over 1600 percent this year according to Yahoo Finance. Yahoo lists the new high at $17,580. Perhaps this was an earlier listing than that of CoinDesk or from a single exchange. Coindesk uses an average price from several exchanges. The two are not far apart in any event.

Bitcoin price rise is not dampening demand for gold

Jeffrie Currie, head of commodities research for Goldman Sachs said that there was no evidence that the high demand for bitcoin was weakening demand for gold.

Currie said that he thinks the investors pools for gold and bitcoin are different. He also said that bitcoin's lack of regulation will keep traditional investors out of the bitcoin market.

Currie said: "In our view, bitcoin is attracting more speculative inflows relative to gold."

Currie noted that gold exchange trading funds (ETFs) are at their highest level in over four years, a sign that there is no mass exit from gold into bitcoin.

Currie said that while the lack of liquidity and high volatility of bitcoin made it interesting, it will not likely tempt investors away from the diversification and hedging benefits of gold.

The CEO of Goldman Sachs, Lloyd Blankfein said some time ago that he believes it is too early yet for the bank to consider a bitcoin strategy but that may change now that there are bitcoin futures. In November he said that while he was not comfortable with bitcoin he was nevertheless open to crytpocurrency.

Bitcoin bulls see bitcoin price up to $20,000

Price chart analysis by bitcoin bulls leads them to predict that the price of the coin could continue up to the $20,000 level.

When the price dipped over the weekend solid demand developed around the $14,000 level fueling a recovery that ended up with record highs yesterday over $17,000.

On social media some investors express fears of at least a minor pullback but the price chart analysis according to the bulls shows that the broader outlook is for the price to continue up.

Detailed analysis of the chart can be found here.

If there is a dip support is expected at the $14,000 level. Two end-of-day closes below $14,000 would negate the bullish view.

Bitcoin futures trading

Futures trading began at the Chicago Board Options Exchange on Sunday evening as described in a recent Digital Journal article. The website was not available for a time at the launch apparently due to heavy volume.

On Monday the trading went largely according to plan according to the CEO of CBOE,

The circuit breakers that pause trading when volatility is excessive were triggered twice during the first six hours of trading but were not triggered at all on Monday.

Michael Mollet, CBOE director of product development said:"The trading has been orderly. We hit a couple of our circuit-breaker halts, but those were due to price movement in futures and not due to any systems issues. We halted like our rules said we would and opened back up."

Market data show that the January futures contract is trading at around $18,000 with 197 contracts since the December 12th session began.

The Chicago Mercantile Exchange Group (CME) is expected to also launch bitcoin futures trading on December 18th.

As I write this the price of bitcoin is not far off its recent high and is at $17, 238. Check this site for the present price.

Published previously in Digital Journal