Futures, Derivatives And The Geeks

Welcome back to your weekly crypto roundup of highlights, news and opinions. This is our last update for 2019. We wish everyone a fantastic holiday period and new year. We would also like to thank each and everyone of you for your support so far. See you in the New Year.

 

This week’s hot topic - Futures, Derivatives and the Geeks (us included)

Over the last two weeks, Cboe and CME launched Bitcoin Futures, opening trading exactly 1 week apart. This marked a huge win for the Crypto community as it finally gave Wall St and large Institutions the ability to buy without the risk associated with buying off an exchange and holding crypto assets. The entire community was anticipating the momentum behind Billions of dollars flooding the market. The sentiment: Wall St was bearish, the price needed correction and futures would help guide it there.

The Bitcoin price slowly declined to $14,500 before Cboe launch. However, as futures went live, Gemini’s exchange price rocketed $1,200 in 6 minutes, Cboe reported 600 contracts purchased in that time, to equal a total of 671 in 10 minutes. It would have been more, but the overwhelming activity shut the Cboe website down. Sentiment was wrong, maybe because they believe in the future potential of Crypto, or maybe because only Long contract were allowed to be purchased.

Both heavily anticipated events eventually cooled down. Interestingly, CME didn’t follow suit, CME outright gave brokers the ability to long/short contracts, subsequently the price dropped by $800, settling at $18,900 just $400 short of the price before CME opened.

If you haven’t noticed, there is a war between Wall St and the Geeks. Tyler and Cameron Winklevoss said on CNBC “We’ve worked really hard to give Jamie Dimon an opportunity to short Bitcoin” the Bitcoin Billionaires are incredibly bullish on the Crypto opportunity and want Wall St to put money behind it.

 

Cboe Contracts: 1 BTC priced at the BPI (Bitcoin Price Index, the average auction price on Gemini) Term: 1, 2, and 3 months.

CME Contracts: 5 BTC priced on the average between 4 exchanges daily BTC price (Bitstamp, GDAX, itBit and Kraken)
 

Magnet’s take

The war is far from over, billion dollar industries are extremely competitive, they come with politics and drama as much as they tell a story. We agree with the Winklevi, at some point in time, there has got to be a levelling off. Digital Assets are here to stay. Blockchain is here to stay. Whether it’s Bitcoin or not, no one knows. We follow trends, technology, solutions and infrastructure. Magnet invests in the future application of blockchain, agnostic to any specific individual coin, currency, token, platform or app.  
 

Bites

21 Million - The total number of Bitcoins that will ever exist. Currently 16.7 have been mined and therefore exist to potentially be traded. A staggering estimated 3.4 millions coins have been lost never to be seen again. Even more staggering, the mysterious creator of Bitcoin Satoshi Nakamoto was said to have mined the first 36288 blocks with a reward of 50 BTC per block thats 1.8M BTC awarded. 1.1M of those coins have not moved since October 2012, the last time anyone heard from Satoshi.



Magnet Update

We have launched the first stage of our Website, other than a landing page, you can now get some more information around what we do. This will be a continuous work in progress, we will keep you updated!

magnetcapital.com.au

 

Adoption

  1. Bloomberg terminals have introduced Ethereum, Ripple and Litecoin. In addition to Bitcoin, Bloomberg will now provide real-time financial data coverage for these crypto assets.

  2. France’s Finance Minister, Bruno Le Maire, has called for the discussion of Bitcoin regulation at the upcoming G20 summit. Often highly debated but not discussed in global forums, government perspectives on crypto asset regulation currently lacks clarity.

  3. Boeing has submitted a patent suggesting that it is investigating the use of blockchain to help protect in-flight GPS receivers. Often experienced, GPS ‘spoofing’ is the practice where counterfeit signals are used to trick receivers. Blockchain can help circumnavigate this practice by providing an immutable ledger of GPS data.

  4. It is rumoured that central banks will begin holding crypto assets as early as next year.

  
 

The Market

  • Despite CME and Cboe releasing futures markets that have allowed investors to short Bitcoin, the price of Bitcoin has risen approximately 20% and remained relatively stable since.

  • During the rapid rise of Bitcoin from ~$7,000 in October to ~$20,000 today, other crypto assets were sold off in place of Bitcoin as previously mentioned. This week has seen a significant increase in demand for Bitcoin alternatives, increasing the prices of many by over 50% or even 100%.

Egor Sidelska