Bitcoin crash, the Deutsche Bank alert in the Futures Opening Day

7 years ago - Published in Finance, Fintech Land, Technical Analysis

According to Deutsche Bank Chief International Economist Torsten Slok, the major risks for the global economy in 2018 include a crash of Bitcoin.

Slok sees huge potential for volatility in the price of the cryptocurrency, as do other economists, and has indicated that the price may even see huge changes before the close of the current year. His main concerns include regulation, transparency, and disclosure, as well as volatility drifting into the overall market. He said: "It's mainly because it (Bitcoin price volatility) is something that I think financial markets so far have been discounting as a small issue," Slok said. 

Mr Slok said: "The worry, of course, that one can have is that it's catching on quite substantially. "Of course, with the speed with which prices are going up, then you do wonder where prices will be even by the end of 2017. But we do think that in 2018, this, of course, will continue to be a topic" he  added.

The economist sent a note to clients highlighting significant risks to international markets which included a crash in the price of bitcoin in the coming year.

Prior to the launch, critics had warned prospective buyers about the extreme volatility of the unregulated currency alongside issues surrounding hacking and money laundering that could cause problems for mainstream exchanges.

Speaking to CNBC, Mr Slok continued: "It is something that I think financial markets so far have been discounting as a small issue. "But we do worry it could become more systemic especially if the current trends do continue."

In the opening minutes of trading on Chicago Board Options Exchange (CBOE) Bitcoin increased in value by $1,170 as the price of a single bitcoin spiked by 10 per cent. The rush to buy caused the CBOE website to crash less than ten minutes after the cryptocurrency first started trading.

On Twitter, the US exchange said: “Due to heavy traffic on our website, visitors to cboe.com may find that it is performing slower than usual and may at times be temporarily unavailable. All trading systems are operating normally.”