Bubble? What bubble?

In the last couple of days, several prominent economists and veteran investors have spoken out against bitcoin’s frothy rise this year. (See also: Is Bitcoin In Bubble Territory?)

But investors don’t seem to care.

The cryptocurrency’s price began trending up immediately after Friday’s announcement of a futures trading date by CME. It picked up steam and crossed $11,000 for the second time this week, peaking at $11,154.68 at 10:08 UTC Saturday, before sliding down to $10,872.38 at 11:46 UTC. At 16:31 UTC on December 2, the price for a single bitcoin was $10,752.60, down 1% in the last 24 hours. On an overall basis, it is still up by 1,000 percent since the start of this year.  

Other cryptocurrencies in the top 10 most-traded were a mixed bag. Five of them registered minor declines while the remaining were mostly unchanged. Litecoin was the big winner and reached a high of $104.99 at 10:37 UTC Saturday due to enthusiasm about atomic swaps, which allow people on two different blockchains to conduct trades with each other, that will be implemented on its blockchain soon. (See also: Litecoin Rises On Hopes Of Segwit Activation.)

Traders pumped up trading volume of the cryptocurrency to a high of $636 million in the last 24 hours. At 16:47 UTC, one litecoin was worth $100.12, up 5% in the last 24 hours, and had a trading volume of $536.5 billion.

The cryptocurrency market was worth $323.6 billion at 16:37 UTC on December 2. Earlier this week, the market had reached a high of $345.8 billion on the back of a swell in prices for bitcoin and other cryptocurrencies.

A Sharp Divide

Bitcoin and other cryptocurrencies are traded in unregulated trading venues; hence, critical data relating to trades and major developments within its ecosystem is not available. In their absence, media attention has become the primary driver of prices for bitcoin.

As the financial services ecosystem evaluates the cryptocurrency, a sharp divide has emerged among those who support bitcoin and those who don’t. For example, Jamie Dimon, chief executive officer of JPMorgan Chase Inc. (JPM), has criticized bitcoin, while Jeff Currie, global head of commodities at Goldman Sachs, has compared it to gold and doesn’t “see why there is all this hostility to it.” In turn, their pronouncements have garnered media attention and propelled the cryptocurrency’s wild price swings. (See also: Jamie Dimon Calls Bitcoin 'A Fraud' And Its Investors 'Stupid.

That might change soon, with decisions by the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE) to begin trading bitcoin futures soon. (See also: CME To Launch Bitcoin Futures.)

As institutional investors put funds into the cryptocurrency market, analysts expect pronouncements by their heads to become less important to bitcoin’s price. As with other commodities, data related to trading and adoption as well as important developments within the ecosystem will take center stage. 

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