Deribit Now Allows Traders to Bet on Bitcoin’s Rally to $160k & Ethereum to $5k

Deribit Now Allows Traders to Bet on Bitcoin’s Rally to $160k & Ethereum to $5k

Bitcoin and Ether rally is just getting started, with Deribit options’ strikes continue to be higher and higher.

Cryptocurrency derivatives platform Deribit continues to make waves with its new strike rates.

If you think Bitcoin at $100,000 was the real deal, not for Deribit users. $100k was so last month’s thing, now that Bitcoin has surged at bove $28,000 this past holiday weekend, Deribit users are now betting at much higher prices.

Today, Deribit introduced call and put options at the $160,000 Bitcoin strike price expiring on Dec. 21, 2021.

“Remember that we list based on policy, not analysis, etc. Strikes up to delta 10,” noted the exchange which is “for algorithmic traders, institutions, and savvy retail traders.”

These new contracts came just on the back of the weekend’s $140,000 BTC, which was added a few hours after $120,000.

Purchasing these call contracts is a bet that the price of Bitcoin will rise above these levels either on or before their expiry date.

At the time of writing, BTC/USD has been trading at $26,728, seeing a small pullback, after the monster rally of last week, that broke multiple levels of new highs.

But it is not just Bitcoin the crypto market is bullish on. Now that BTC has taken a small step back, Ethereum has taken the reins from the flagship cryptocurrency and after a long time surged above $700 on Monday. After going to nearly $750 yesterday, we fell back under the $700k mark but today the market is on the move again.

And according to Deribit users, ETH is just getting started as the platform added the ETH contracts with a $5,000 strike which expires on Sept. 21 and Dec. 21.

Given that ETH is still about 50% away from its ATH, the digital asset has more room to grow. Not to mention, the Ethereum futures to be launched on CME in February next year will bring a herd of institutions.

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Author: AnTy

3iQ’s Ether Fund is Now Trading on Toronto Stock Exchange; The First ETH-Based ETF

On Thursday, the Canadian investment fund manager announced that 3iQ’s Ether Fund had completed its initial public offering (IPO) of 7,240,000 shares for $76.5 million. It has started trading on the Toronto Stock Exchange under the symbol QETH.U.

The trading started a couple of hours late due to a delay in closing the IPO prospectus. On resumption, the fund recorded a high of $11.48 and a low of $10.80 before ending the day at $11.02, with 345,331 shares traded across the day.

The Fund provides its holders’ exposure to the second-largest digital currency and an opportunity for “long-term capital appreciation.” Tyler Winklevoss, the co-founder and CEO of crypto exchange Gemini which will provide its custody services to the company, tweeted,

“Huge news for Ethereans. The Ether Fund by @3iq_corp will list on the Toronto Stock Exchange ($QETH).”

Ether’s price has been choppy for the past few weeks, going down to $535 today.

However, as we reported, institutional investors have been taking this dip as an opportunity to scoop more and more ETH through Grayscale’s ETHE product.

While nearly 3 million ETH are locked in ETHE, more than 1% of ETH’s circulating supply is deposited in ETH 2.0, and 6.1% of it is locked in DeFi protocols.

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Author: AnTy

Grayscale Amasses 552.5k Bitcoin and Almost 3 Million ETH with Latest Big Accumulations

Grayscale Investments continue to gobble up more and more Bitcoin, and now it has its eyes set on Ether as well.

All this buying has Grayscale Bitcoin Trust amassing 552.5k BTC so far, worth more than $10 billion. GBTC currently has almost 3% of Bitcoin’s circulating supply.

As per the company’s Dec. 3rd filing with the US Securities and Exchange Commission (SEC), they added another nearly 14,592 BTC worth over $280 million to its holdings.

GBTC is currently trading at a premium of around 15% to BTC price, cut down in half since last week. The premium started trending up in early October along with the jump in the price of Bitcoin but has been keeping under 30% throughout 2020 except for a handful of occasions.

This premium is a function of “exposure to bitcoin in a regulated vehicle without having to deal with the challenges of custody, eligibility to some tax-efficient schemes, strong distribution through regular brokerage accounts, lack of alternatives such as an ETF,” noted data provider Skew in its report.

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Source: Grayscale Investments BTC Holdings

However, it is not just Bitcoin that Grayscale’s institutional investors have their eyes on. Grayscale’s ETH stash is ready to hit 3 million, currently at 2.94 million ETH worth nearly $1.7 billion.

This Ether accumulation actually saw a big spike on Wednesday, which means this week institutional investors bought the dip on ETH.

Ether is currently trading at $560, up from yesterday’s low of $530, while Bitcoin is around $18,240, has managed to recover from yesterday’s drop to $17,650.

Grayscale Ethereum Trust (ETHE) is trading at a premium of a whopping 127%, down from 900% in June.

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Grayscale Investments ETH Holdings

Institutions are coming into the cryptocurrency market at a fast pace in 2020 as the market enters into another bull cycle.

Bitcoin is gaining attention as digital gold and inflation hedge this year, while Ethereum blockchain is becoming the most actively used with its token Ether solidifying itself as an asset class.

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Author: AnTy

Ethereum 2.0 Deposits Slow Down This Week; Only 10% of ETH Staking Goal Achieved So Far

Since the Ether staking activated, ETH has been deposited at a steady pace. Currently, 56,113 Ether, worth nearly $26.5 million, has made it to the deposit contract.

This is just over 10% of the required 524,288 ETH (16,384 validators) to launch the mainnet. The Phase 0 staking goal is much far away that could see the expected launch date of December 1st being pushed back.

As one ETH enthusiast shared their concern, “An average of 2,100 ETH per day has been deposited over the last three days. We need ~32,000 ETH per day from now till 11/24 to meet the 12/1 launch date. At the current rate, we will NOT launch till June 2021.”

The number of ETH 2.0 deposits have actually slowed down considerably this week.

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However, ETH holders will likely be staking more and more ETH towards the deadline. This is because the size of rewards depends on the total amount of ETH staked in total — the more the people staked, the lower the yield.

Besides the late mover having more information, staking ETH is a one-way street, and if something goes wrong with ETH 2.0, these ETH are gone forever. Moreover, staking via exchanges offers instant liquidity on BETH, and the exchange will be the one doing the work of running a virtual validator.

“This makes sense though – not only is there a yield opportunity cost from now until Dec 1 on ETH1, but if you deposit later, you’ll get a better idea of ETH2 staking yield,” said analyst Cetris Paribus.

Amidst this, Ethereum Foundation is funding several grants for ETH 2.0 staking.

According to CryptoQuant CEO Ki Young Ju’s Twitter poll, 45% of the 815 votes are “just not interested” in locking their ETH. While 15.5% says their ETH are locked on other projects, a good 26% says there is a lack of staking rewards with a deadline effect as per 13.5% of the votes.

Additionally, this past week, ETH price saw substantial gains, currently trading near $470, with ~80% of $ETH addresses experiencing profit. However, both the transaction and social volume of ETH have begun to decline, with positive funding rates making an appearance mean the price may take a breather here.

But the fact that crypto exchanges’ ETH balance is declining and active addresses are increasing only slightly; these deposits can gain momentum.

Also Read: Ethereum Undergoes ‘Unannounced Hard Fork’ After Infura Goes Down

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Author: AnTy

Here’s Why Ethereum Can Further Outperform Bitcoin and Other Large Cap Coins

The price of cryptocurrencies has started to rebound. Yesterday Ether led the market upwards, going to nearly $400 level thanks to Grayscale Ethereum product ETHE becoming an SEC reporting company that reduced its investors holding period in half to six months.

This news could bring with it “a raft of arbitrage opportunities for market participants trading across retail-focused venues vs. the more institutionally focused venues,” says Denis Vinokourov of Bequant.

Additionally, given Ethereum’s use as a hedge to DeFi exposure, “the development may result in a short squeeze, further exacerbating the likely outperformance against its large-cap counterparts,” he added.

Bitcoin also made its way above $11,700, outperformed by ETH, but today, the market is inching down.

However, unlike the strong price action, the fees are returning to normal. ETH fees continue to plummet with average transaction fees currently under $2 from August’s peak of $14.58, following the unprecedented DeFi-driven growth over the summer that topped out in August.

Interestingly, Bitcoin fees are keeping to its trend of going in the opposite direction of Ether, growing by 15.2% week-over-week and averaging about $1M per day. Average Bitcoin transaction fees started going down in Q3 and bottomed at $1.3 towards Sept.’s end only to make its way upwards to above $4 in October.

“Transaction fees currently account for 9.5% of the miner revenue, and have become a far more significant contributor to the miner revenue following the BTC halving in May,” noted Arcane Research. “The miner revenue has not been this influenced by transaction fees since the 2017 bull run.”

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Source: Bitinfocharts

Meanwhile, the hash rate of both the top networks is heading north, making new highs. Bitcoin’s hash rate reached a new all-time high this week with the 7-day average hash rate surpassing 140 EH/S, 36% higher since the beginning of this year.

Just like Bitcoin’s strong fundamentals, the Ethereum hash rate also hit a new peak at 254.36 TH/s last week, following the constant growth since mid-July thanks to the rise of DeFi.

“The large increase in fees meant more revenue for miners, which incentivized more miners to join the network and caused hash rate to grow,” noted Coin Metrics.

After rallying hard, September has been a challenging month for DeFi tokens, which crashed hard, potentially finding the bottom. However, the total value locked (TVL) in the ecosystem has jumped past $11 billion.

However, the alpha seeking capital exploiting the DeFi ecosystem could also make a temporary return to join the Ethereum rally. Even Bitcoin could help Ether run higher with Wrapped Bitcoin (WBTC), which continues to accelerate.

Meanwhile, Ethereum has successfully launched yet another dress-rehearsal testnet dubbed Zinken for the upcoming Ethereum 2.0 Phase 0. Unlike the previous failed attempt of Spadina, this was a smooth launch on Monday.

The good news for Ethereum kept on coming at the start of this week, another one in the form of Aztec announcing the launch of Aztec 2.0 — the Layer 2 scaling solution with privacy at its core. The zkRollup based network, live on Ropsten, has private sends by default for ERC-20 tokens on top of scalable private access to DeFi with 200x gas reduction compared to the previous version.

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Author: AnTy

DeFi’s Speculative Frenzy Subduing Ethereum; Users Approaching 500k

During the bloody red Monday, Ether lost about 10.6% of its value; currently, it is trading around $340.

These levels were last seen earlier this month, but another small lower and Ether will get back to July level.

“Weekly time frame still looking like a bearish retest of the previous range ($390s). Bitcoin looking better on the weekly, but also pulling back from daily resistance,” noted trader Cred.

With a lull in price came the opportunity to make cheaper transactions on the second-largest network. Not that the sky-high fees prevented users from doing that, as evident from the drastic congestion seen last week.

DEX Extravaganza

Currently, the average transaction fees on Ethereum is around $3.56, down from $11.6 on Sept. 17, the day popular DEX Uniswap airdropped its governance token UNI.

Uniswap is the project that accounts for the highest gas spent. In the past 30 days, Uniswap V2 was responsible for spending $12.7 million in gas.

It is also the largest decentralized exchange by trading volume that generates nearly $1.5 million in fees per day, less than Ethereum’s $5.2 million but more than Bitcoin’s just over $500k, as per TradeBlock.

The trading volume on DEXs overall has also been hitting a new all-time high. More than $17 billion in notional volume has already been transacted so far in September, double the August’s volume and an increase of 400% since July.

DEXs have seen explosive growth in recent months on the back of increased capital flows in DeFi tokens, which don’t need a formal listing process. All this speculative frenzy of activity results in driving up ETH gas fees.

With traders desperate to get ahead of their peers and willing to pay outrageous prices for a confirmation, the Ethereum fees proved to be inelastic, which has some projects even abandoning the network as it makes their project economically unviable.

Can even ETH 2.0 handle it?

The overwhelming demand for Ether has been going on for the past three months, which saw the daily transactions on the network hitting a new peak at 1.4 million, up from 1.34 million set at the height of last bull run, in early Jan. 2018, as per Etherscan.

This is why ETH continues to flow out of centralized exchanges and into smart contracts. Since August 15th, the balance of ETH has decreased by 11.6%, with 2.2 million ETH withdrawn from exchanges while the amount of Ether in smart contracts increased by 3.4 million.

DeFi currently has nearly 8 million ETH locked compared to 16.6 million on centralized exchanges, as per Glassnode.

The innovation in DeFi space is also drawing users in like crazy, currently just under 500k, up from 98k at the beginning of 2020 and a mere 8,325 on January 1st, 2019.

This raises the question of whether ETH 2.0 will really be able to handle this growth.

“(ETH 2.0) starts with 64 shards at first, so it should be able to handle at least 64x more usage (potentially even more if we get some L2 adoption as well),” said David Lach.

Although the first step towards ETH 2.0 has been taken, the path to launch is long and arduous, as such layer-2 applications present another solution with Ethereum co-founder Vitalik Buterin himself endorsing the likes of OMG, Loopring, and Zk-sync.

With high gas fees also burning the profits of exchanges, with Coinbase now passing this directly onto users, an increasing push towards these solutions has been seen. Tether is already implementing Zk-roll ups; many apps are also turning to side chains such as xDai.

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Author: AnTy

Switzerland’s Canton to Allow its Citizens to Pay Taxes in Bitcoin & Ether Starting 2021

Switzerland’s canton of Zug will start allowing people to pay taxes in Bitcoin and Ether from 2021, as per the official statement.

“Tax settlement by means of crypto currency will be available to both companies and private individuals up to an amount of 100,000 Swiss francs ($109,670).”

Home to crypto firms, hedge funds, and commodity traders, the region has about 127,000 people and will be collaborating with the Zug-based broker Bitcoin Suisse AG, which converts the digital currency into local currency, francs, and transfers the amount to the state.

Zug isn’t new to accepting digital currencies; back in 2016, bitcoin payments were accepted for certain government services. Finance Director Heinz Tännler said,

“As the home of the Crypto Valley, it is important to us to further promote and simplify the use of crypto currencies in everyday life. By being able to pay tax debts with Bitcoin or Ether, we are taking a big step in this direction.”

Known for the low corporate taxes, crypto firms in Switzerland have gained a lot of traction propelled by favorable regulations.

“Everybody cares about a $0.5 trillion-market,” said Niklas Nikolajsen, founder and Chairman of Bitcoin Suisse, who first started buying BTC when it was worth less than $1.

“There’s almost nothing controversial about trading Bitcoin anymore. It’s completely mainstream.”

Bitcoin Suisse, which made a profit of 2.4 million francs last year and revenue of 20.9 million francs, recently applied for Swiss and European banking licenses. With this license, the company would be able to focus on Germany primarily, while its primary client base is also in Switzerland and Scandinavia.

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Author: AnTy

Ethereum (ETH) to Repeat 2017? Supply Sink & Buy Pressure Coming

Ether outperformed Bitcoin during the ICO mania of 2017, as it was the most popular platform on which these projects were built on.

Now, during the DeFi mania, ETH is again surpassing Bitcoin, the largest digital asset with a fixed supply. In 2020 so far, ETH has recorded 238% positive returns compared to BTC’s just 56.05%.

According to on-chain analyst Willy Woo, Ethereum is actually “very close to BTC in terms of risk-reward.”

Bitcoin Risk Adjusted Returns vs Other Assets
Source: charts.woobull.com

Thanks to the DeFi craze, Ether’s supply has also been shrinking as a record 6.4 million ETH is already locked in the sector. Now, Ether’s supply is going to be even more contracted thanks to DeFi darling Yearn Finance.

The project has finally added yETH vault along with yWETH and other digital assets. Obviously, these debt-based vaults carry extremely high risk like any other DeFi project and also charges a 0.5% withdrawal fee, not to mention the record transaction fees on the second largest network.

In simple terms, lock in your ETH in a vault and take out more than you put in thanks to the 65% APY.

The community is extremely excited about this development, with some calling it “the world’s first autonomous on-chain hedge fund.”

“Could be a block hole for ETH, super bullish,” said another trader.

“YFI yETH vault will lead to a supply sink from ETH deposited to mint DAI, but also ETH buy pressure from yield farming earnings converted to ETH. Another timely benefit is that gas costs are pooled,” stated Alex Gedevani, who handles research at Delphi Digital.

With ETH leveraged in DeFi, staking coming in Phase 0 of ETH 2.0, and yETH vault here, the supply-side liquidity crisis is coming for Ethereum, which is expected to send the digital asset’s prices higher.

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Author: AnTy

Ethereum Is Making it Hard for Retail Investors to Enjoy the DeFi Craze

  • Ethereum fees have calmed somewhat since going haywire.

Average Ether transaction fees skyrocketed to $7.3 on August 13, as per Ycharts. The total daily transaction fees on the network topped at $6.87 million, eclipsing the previous all-time high of $4.55 million in January 2018. The next day, this record was broken to hit $8.61 million.

These astronomically high fees were the result of YAM mania. The distribution of YAM tokens through staking pools, the higher the stakes, the more the tokens earned, created a rush as reflected in the more than $15k worth of transaction fees generated by YAM staking pool smart contracts within hours of launch.

As we reported, a bug in rebase function disturbed the whole set up and required 35k YAM to fix the issue. Again this rush to move YAM caused fees to skyrocket.

ETH Hourly Fees, USD
Source: CoinMetrics

Such speculations, reminiscent of 2017’s ICO mania, lead to “unexpected risk and sudden surges in fees.”

While this means high demand for usage, high fees also cause network congestion and price out certain users. Coin Metrics noted,

“High fees make it less and less profitable for retail investors to put relatively small amounts into DeFi applications. DeFi is increasingly a game for whales, unless there are solutions to help drive fees down.”

In its latest report, Coin Metrics points out how it is becoming “harder for average, retail users to compete with large, whale investors who can afford to pay high transaction fees,” on Ethereum.

When mining a block, Ethereum miners select which transactions to include which are typically sorted by the highest fee as such “relatively low fees get deprioritized and included in later blocks once there’s space.”

Increasing the gas, a unit to measure Ethereum fees, increases the chances of a transaction getting included. And higher fees lead to higher revenue for miners.

As such, as average transaction fees in Ethereum increases, certain types of users and applications, especially those with microtransactions, get priced out, making it skewed towards whales at the expense of small, retail users.

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Author: AnTy

Analyst Predicts New ATH for Ether in Q2 2021; Heightened Volatility Also Bullish

Ether is having a field day, enjoying substantial gains this past week.

The digital asset jumped 20% to reach about $445, a level that was last seen in late July 2018.

Ether started gaining after the price broke out of a two-month range between $210 and $250 towards the end of July. At the time of writing, Ether has been trading around $445, up 226% YTD.

“ETH is in a consolidation phase after hitting a recent high of $445 over the weekend. However, the correction has not been big, indicating market participants still have strong buying power. ETH still has a chance to test its previous high,” states OKEx in its daily report.

According to trader Crypto Wolf, Ether will hit new highs, $1,570 reached in Jan. 2018, in Q2 of next year.

New Money is Flowing In

As we reported, this jump in price has been coinciding with the growing usage of the second largest network.

Even though Ether transaction fees broke all-time highs two days in a row at 17.8k ETH and 20.3k ETH last week, the daily transaction count is also nearing an ATH. The last peak was at 1.34 million that was set on January 4, 2018, when the average market price of Ether was $1,042, according to data source Santiment.

This 25-months high also has investors taking an interest in Ether futures and options, which hit a new peak last week.

The total value of outstanding contracts, open interest in Ether futures rose to a record high of $1.73 billion on Friday, breaking the previous high of $1.45 billion from August 5th, as per Skew. Open interest in the futures market has increased by 300% this year.

In the options market, which is skewed bullish, the OI has climbed to a record high as well at $454 million. This indicates money flowing into the digital asset with another positive aspect seen in the contango market.

DeFi Boom Powering Ethereum

In the meantime, the rising 1-month volatility for Ethereum has gone to 102% along with the 3-month volatility while the 6-month at 94%. This indicates that “the market is putting a lot of hope on Ethereum ‘succeeding’ in its efforts to transition from the current Proof of Work (PoW) to Proof of Stake (PoS),” said Denis Vinokourov, head of research at the London-based digital asset firm Bequant.

Only time will tell if these bulls will be right, the latest Ethereum testnet crashed last Friday and was unable to reach finality. A time-related bug was the problem at Prysm, which is used by the vast majority of validators.

For now, the market continues to grapple with out of control gas and transaction costs. All of which has been thanks to the popularity of decentralized finance (DeFi), which is growing at a fast pace.

On May 30th, the DeFi sector had $1 billion total value locked, which has grown more than 500% to reach a new peak of $6.31 billion today, as per Defi Pulse.

The amount of Ether locked in the sector has also grown massively in the past two months. From 2.5 million ETH two months back, there is now 4.5 million ETH locked in DeFi.

It is the DeFi boom, users rushing into yield-farming projects, that is powering the gas, activity, and gains in the Ethereum network.

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Author: AnTy