They think they are fortune-tellers – Everyone wishes they could anticipate Bitcoin (BTC) prices, and some analysts are trying to find a divinatory formula for it.
Those at Wilshire Phoenix suggest that BTC price movements are strongly linked to movements in WEC Bitcoin futures.
Do WEC Bitcoin futures lead the price dance?
In a recently published report, investment firm Wilshire Phoenix outlines the research that led them to the most important factor (in their view) for the anticipation and discovery of Bitcoin prices.
It would be based on the futures contracts on Bitcoin of the Chicago Mercantile Exchange (CME). Indeed, for analysts :
„… the CME Bitcoin Lifestyle contracts contribute more to the price evolution than the cash markets [i.e. the cryptoexchanges] … the CME Bitcoin futures have gained importance, which is demonstrated not only by the volume of trade and open interest positions, but also by the influence on the formation of cash prices. »
And indeed, as shown in the graph below, the notional exchange volumes of bitcoins on CME futures are higher than those of 5 exchange platforms (Coinbase, Kraken, Bitstamp, Gemini and itBit).
Average trading volume of BTCs on 5 crypto exchanges (left) and on CME futures (right)
Yes, but what about other exchange platforms?
As Cointelegraph points out, Wilshire Phoenix analysts do not take into account the major crypto exchanges. Binance, Huobi, OKEx, Bitfinex or BitMEX are not taken into account in their search for the most important factor in the formation of Bitcoin’s prices.
Although these platforms are not regulated like those used in research – and are therefore less likely to attract institutional investors, it is quite possible to consider that they play a significant role in the evolution of BTC prices.
Similarly, the impact of the Grayscale Bitcoin Trust investment fund, which is very successful with institutional investors, may well influence prices.
Movements in the WEC Bitcoin futures contracts are certainly one of the factors that drive the price movements of the BTC. However, they should not be limited to so little. Bitcoin prices remain a complex machine, with a total valuation of around $240 billion today.