The considerable price decline of cryptocurrencies like BTC in late December 2017 to early 2018 may have something to do with Bitcoin futures after all. In an economic letter from the Federal Reserve Bank of San Francisco, the authors concluded that the fast increase and equally rapid decline in the price of BTC was definitely not a coincidence. This pattern was deemed to be consistent with typical trading behaviour which accompanied the introduction of futures markets for an asset. There was a similar occurrence when bonds were securitized in the early 2000s, according to the Federal Reserve. “The subsequent bust was driven by the creation of instruments that allowed pessimistic investors to bet against the housing market,” the Federal Reserve wrote. “Similarly, the advent of blockchain introduced a new financial instrument, Bitcoin, which optimistic investors bid up, until the launch of Bitcoin futures allowed pessimists to enter the market, which contributed to the reversal of th...