The tulip craze happened in the Netherlands in the seventeenth century where the price of the flower skyrocketed. The result was a crash of that market in 1637. CME Group announced plans for bitcoin futures contracts earlier this week, a move that UBS analyst Paul Donovan has compared to the introduction of a similar product just before the tulip bubble burst in the 1600s.
The tulip craze in the Netherlands in the 17th century saw the price of the flower skyrocket. This resulted in a crash of that market in 1637. In 1636, cash-settled futures were introduced in the tulip market. A futures contract is one where a buyer and seller will agree a price for a commodity that will be delivered on a certain date. This previously meant that the physical product had to be delivered. But cash-settled futures contracts allow cash to be delivered upon expiration.
This method was used during the tulip bubble and a year later in 1637, the market crashed. The CME Group said earlier this week that it plans to launch bitcoin futures in the fourth quarter, pending regulatory review. Those futures will be based on cash settlement too.Read more here... Oh oh, here we go again! Some people are really fond of comparing the tulip bulb mania that occurred in 1600s to the present Bitcoin phenomenon which is currently making a very noticeable surge in value (albeit being just in its digital form). The recent announcement from CME Group for the introduction of Bitcoin futures fueled the rampage we are experiencing right now.
Noticeably, I am seeing that once the platform by CME can be successful, there would be numerous copycats not just in USA but also all over the world. Who does not want to have another opportunity to make some more money using a proven investment vehicle like futures?
Do you think that the future of Bitcoin has already arrived and that soon we are to be taken on its wing as it is going to the MOON?
