Before popular U.S. exchanges like Coinbase, Ehrlich pointed out that bitcoin was complicated and nearly impossible to buy unless you had a computer science or coding background. Coinbase, valued at $8 billion, at one point was signing up 50,000 new customers a day at the height of the crypto boom last year, CEO Brian Armstrong said at the Bloomberg Players Technology Summit in San Francisco this summer.
But it wasn’t all dinner-table hype that led to the epic price rise.
The rapid spike also coincided with the introduction of a bitcoin futures market. Peak prices lined up with the day the Chicago Mercantile Exchange introduced bitcoin futures trading on Dec. 17. The Chicago Board Options Exchange opened a futures market a week earlier.
Until futures existed, it was extremely difficult, if not impossible, to bet on the decline of bitcoin prices.
This week, bitcoin futures products hit their lowest level since they were introduced. Research from the San Francisco Federal Reserve suggests bitcoin futures were partly to blame, as investors finally got the option to bet against the cryptocurrency.
U.S. regulators have flagged other potentially nefarious reasons for bitcoin’s stratospheric rise last year.
The Justice Department is reportedly looking into whether traders used tether, a controversial cryptocurrency that founders say is backed one-to-one by a U.S. dollar, to prop up bitcoin during its record-breaking rally, according to Bloomberg News, which cited three people familiar with the matter.
Some academics are also skeptical. University of Texas finance professor John Griffin, who has a 10-year track record of spotting financial fraud, and graduate student Amin Shams published a study in June that said at least least half of the jump in bitcoin was due to coordinated price manipulation.
At key moments when bitcoin was declining, they said tether was used to buy bitcoin to help “stabilize and manipulate” the cryptocurrency’s price.
Despite the massive losses this year, Asman think his own family members remain curious and open to the conversation. But this year, the theme might be less about the “crazy euphoria” of last year and more about looking ahead to 2019.
“A lot of people are going to wonder what happened, and what comes next,” Asman said.