By Galina Hale, Ph.D., Research Advisor, Federal Reserve Bank of San Francisco; Arvind Krishnamurthy, Ph.D., The John S. Osterweis Professor of Finance, Stanford Graduate School of Business; Marianna Kudlyak, Ph.D., Research Advisor, Federal Reserve Bank of San Francisco; and Patrick Shultz, Doctoral Candidate, Wharton School, University of Pennsylvania and Former Research Associate, Federal Reserve Bank of San Francisco
Bitcon’s peak price coincided with the introduction of bitcoin futures trading on the Chicago Mercantile Exchange. The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence. Rather, it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.
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