Former Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarclo says that the Trump administration coordinated to pop the Bitcoin bubble of late 2017.

They did this by introducing Bitcoin futures on the Chicago Mercantile Exchange (CME). Specifically, Giancarlo says:

“One of the untold stories of the past few years is that the CFTC, the Treasury, the SEC and the [National Economic Council] director at the time, Gary Cohn, believed that the launch of bitcoin futures would have the impact of popping the bitcoin bubble. And it worked.”

The theory was that institutional money would tame the rapidly rising price of Bitcoin on the spot markets, as Giancarlo says: “We believed that, should bitcoin futures go forward, it would allow institutional money to bring discipline to the value of the cash market. And that’s exactly what happened.”

Indeed, the Bitcoin bubble of 2017 peaked at USD 20,000 a day before the launch of Bitcoin futures on CME, after which point the price of Bitcoin began to crash, precipitating the bear market of 2018.

Apparently this decision was driven by the events of the 2008 Great Recession, when a massive economic bubble collapsed and caused widespread loss. Regulators believed that it was safer to pop the Bitcoin bubble than to let it inflate to its maximum size, since then when it pops the losses would be less. Of course, cryptocurrency users, traders, and investors who collectively lost hundreds of billions of USD when the 2017 Bitcoin bubble popped probably disagree with this ideology, since perhaps the bear market would have not been as severe if CME Bitcoin futures were never introduced.

BitcoinNews.com is committed to unbiased news and upholding journalistic codes of ethics. For more information please read our Editorial Policy here.