Are Advanced Trading Tools Causing the Bitcoin Price Drop? Exchanges, Experts Weigh In

Among the many theories behind Bitcoin’s recent price cold streak, one of the most prominent speculations is that of emerging trading tools causing downward pressure on the market.
More and more exchanges have been adding value to their services by introducing such trading tools as futures, derivatives, leverage etc. – similar to the instruments used in traditional finance. Many argue that these tools are geared towards high-volume markets and, therefore, can prove too powerful for a relatively small Bitcoin market with a capitalization of under US$6 billion compared to the daily average of US$4 trillion flowing through traditional financial markets.
‘Many sharp declines in financial markets were largely attributed to the leverage involved, especially for cryptocurrencies,’ stated Thomas Xie, CEO of LakeBTC via email to CoinTelegraph. ‘The entire Bitcoin capitalization is still very tiny, the number of Bitcoin in circulation is even smaller, and the market is quite illiquid compared to most of other traditional financial assets.’
But while some exchanges such as Shanghai-based LakeBTC have not yet rolled out such features, others like OKcoin with their recent Maker Taker offering, along with BitMEX and Bitfinex are in a race to offer the “most comprehensive financial products” such as futures and margin trading, respectively.

This post was published at Coin Telegraph on 2014-09-29.