Institutional Investors Shift Interest to Ether But Bitcoin Fundamental Shows ‘Healthy Bull Market’

On CME, Ether futures volume and OI is up 50-60%, while for Bitcoin, it is declining. Still, several metrics show that people are not preparing to sell their BTC and have “longer-term conviction” in the trillion-dollar crypto asset.

Institutional investors seem to be more interested in Ether right now than Bitcoin.

Ether futures had a record volume day this week, trading $228 million in volume, as per Skew. It is a relatively new product as CME Group launched Ether future just a few months back on Feb. 8.

Despite these good numbers, Ether futures are only catching up to the underlying spot volume.

According to the March report of CryptoCompare, in terms of total USD trading volume, CME’s newly launched ETH futures reached $1.5 billion in March, up 51.3% since February. Meanwhile, BTC futures volume on CME has decreased by 0.5% to $59.4 billion.

About ten days ago, at the announcement to the upcoming CME micro Bitcoin futures, Tim McCourt shared that since the Ether futures launch, they have seen 767 contracts, equivalent to 38,400 Ether, trading on average each day compared to 13,800 contracts equivalent to about 69,000 BTC in 2021.

Much like volume, open interest is also on the surge, with ETH OI averaging $102 million, up 66.2%, in March on CME, and currently, at $187 million. As for Bitcoin, traders err on the side of caution, with OI dropping by 15% to $2.1 billion last month.

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Average open interest for March was down 14.1% from Feb. across all futures derivatives products at $25.9bn. Binance, however, recorded a 1.5% increase and the highest open interest on average at $7.5bn.

The OI shifted lower as the price of Bitcoin remains stuck under $60k while Ether’s is trading above $2k, hitting a new ATH at $2,050 last weekend.

Despite the lack of movement in price, bitcoin fundamentals paint a healthy and bullish picture, as noted by Yassine Elmandjra, an analyst at ARK investment and on-chain analyst David Puell in “Buyer and Seller Behavior: Analyzing Bitcoin’s Fundamentals.”

One of the metrics, Thermo Capitalization, which is the total USD value of coins paid to miners, is at $23 billion, nearly 98% below bitcoin’s market cap, indicating that “miners no longer dominate as natural sellers.”

Another metrics is “HODL” waves shows that today, roughly 55% of bitcoin’s supply hasn’t moved in more than a year, illustrating investors’ longer-term conviction in the crypto asset.

The largest crypto asset, Bitcoin achieved a trillion-dollar market cap this year for the first time, however, realized market cap, which values each BTC at the price of its last move, is at $350 billion.

“Whenever market cap drops below realized cap, the overall bitcoin market sells at a loss, denoting capitulation,” noted Elmandjra and Puell.

Another bullish metric is coindays destroyed, an increase of which implies that holders are moving coins out of long-term storage and taking profits.

The metrics measure the time-weighted turnover of bitcoin and is currently slightly above 5 billion, still 30% below its all-time high in early 2018 in spite of the price tripling its 2017 ATH, depicting “a healthy bull market.”

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Author: AnTy

CBOE Now Wants Back In, CEO says ‘Haven’t Given Up’ on Bitcoin Futures & We ‘Need’ to be Here

CBOE Now Wants Back In, CEO says ‘Haven’t Given Up’ on Bitcoin Futures & We ‘Need’ to be Here

There has been a “lot of demand from retail and institutions” that the crypto space has been seeing lately

CBOE Global Markets is now looking to get back into the crypto space.

Back in March of 2019, the Chicago-based exchange holding company delisted Bitcoin futures when the price of BTC was about $4,000. It was the first US exchange to list Bitcoin futures in late 2017 and was followed closely by CME Group, which gained wider acceptance.

Now that Bitcoin has risen to a new all-time high of $62k, Chief Executive Officer Ed Tilly says, “We’re still interested in the space, we haven’t given up on” bitcoin futures, reported Bloomberg.

“We’re keen on building out the entire platform. There’s a lot of demand from retail and institutions, and we need to be there,” he added.

In December 2020, CBOE partnered with CoinRoutes to launch a suite of tools, including crypto indexes, real-time ticks, and historical data. At the time, it was said to be launched by the end of the first quarter of this year.

They are now eyeing new efforts as the demand for the product increases and the market matures.

Earlier this month, as we reported, CBOE also filed with the SEC to list and trade shares of the VanEck SolidX Bitcoin Trust.

“We’re very keen to move along approval for the VanEck ETF,” said Tilly.

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Author: AnTy

CME, Binance, and Bybit Captures BitMEX’s 24% Drop in Bitcoin Futures Market Share

CME, Binance, and Bybit Captures BitMEX’s 24% Drop in Bitcoin Futures Market Share

Last week was a historical one for Bitcoin as the world’s largest digital asset smashed through $20k and hit a new all-time high above $24,000. Currently, in its price discovery mode, all the pullback BTC is seeing hasn’t taken us to even $21k.

This price action, the largest weekly percentage gain of 22% since April 2019, has pushed the volume on spot exchanges to over $10 billion for the first time in history.

Over $1 billion worth of short positions got liquidated in the futures market over just two days last week. Leveraged traders have also been upping their risk profiles while the premiums to spot continues to decline.

This week, another burst of volatility can be seen in the market as Bitcoin futures contracts for December expire on Friday. Interestingly, the

Bitcoin futures market had some significant changes this year. The popular derivatives platform BitMEX, which commanded 34% of the market share at the beginning of this year, is the biggest loser of 2020. Currently, BitMEX occupies just 10% of the Bitcoin futures market, as per Arcane Research.

This 24% loss in the market share has resulted from the U.S. Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) charging the exchange and its founders in October with illegally operating a crypto derivatives trading platform. These civil and criminal charges resulted in the exchange losing its edge in the market.

Open interest on BitMEX is currently around $720 million compared to more than $1 billion on OKEx, CME, Binance, and Huobi. BitMEX’s loss resulted in Binance, CME, and Bybit’s gain as all three of them strengthened their position in the market this year.

The biggest gainer is Binance, which recorded an increase of 12% in its market share. With a 9% jump, CME comes behind the leading spot exchange, but this regulated platform has more OI at $1.43 billion compared to Binance $1.38 billion. CME mainly sees increased traction thanks to all the institutional attention towards BTC.

Bybit’s OI is hovering just under the $1 billion mark; the platform now captures 11% of bitcoin futures market share, up from only 6% at the beginning of this year.

Among the losers, Huobi lost 4% of its market share while OKEx’s dropped 8%, although the latter has the highest OI at $1.53 billion, as per data provider Skew.

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Author: AnTy

ErisX Launches Cash-Settled Contracts to Help Limit Investors Exposure to Market Volatility

The cryptocurrency derivatives platform ErisX has now introduced cash-settled bounded futures to protect against market volatility and enable short positions in the crypto market.

Chief Executive Officer of ErisX Thomas Chippas said the firm wants to encourage traders interested in trading spot Bitcoin. By adding physically settled futures to the platform, traders will protect the futures clearinghouse and futures exchange.

Unlike physically settled contracts, the nature of cash-settled contracts means they do not need Bitcoin delivery. This enables investors to still profit from Bitcoin, even when they don’t have enough to invest heavily.

Chippas reiterated that the only way investors and traders will be drawn to physically traded futures is when exchanges start offering them on margin. He further revealed that ErisX has reached out to the U.S. Commodities Futures Trading Commission (CFTC) to enable the exchange to provide margined accounts for physically settled futures.

Meanwhile, the launch of cash-settled bounded futures, according to Chippas, will offer both lower and upper bonds on losses and gains, which protects investors from high volatility in the market.

Since 2017, exchanges have been offering cash-settled futures in the U.S. Cboe, and CME rolled out their products the same year, although the former stopped offering Bitcoin futures last year.

Traders can gain more crypto exposure through the platform.

ErisX gained approval from CFTC to offer additional trading services on its platform.

There is a minimum potential risk of trading cash-settled contracts, and it requires less collateral than other contracts.

Bounded Futures also protect holders against volatility in the market, as it enables short positions in the market. Traders can quickly cash out in the market when they discover that the trade is going against them.

The contracts are entered and settled in cash, enabling customers to gain more crypto exposure, even those who may have restricted access in the market.

He added that the bounded funds would offer traders the chance to profit even from a volatile market by allowing cost-efficient strategies. As a result, they manage their risks effectively and still reap good rewards from their investments.

“These contracts are one initiative among many that we have been working on to simplify access to the crypto markets,” Chippas said, pointing out that the goal of the exchange is to make trading simpler for traders.

Offering lesser trading risks

Another interesting feature is the bringing of all options on a single platform for traders. As it stands, ErisX offers traders the right access to crypto markets while maintaining performance and security. It’s currently the only US-based exchange that allows customers to trade regulated and spot futures on a single platform.

The exchange also has a reward or bonus policy where new clients are rewarded with a $50 token for their next transaction after completing signup and making their first transaction.

The exchange says it’s in the company’s goal and interest to continue offering maximum security and protection of traders’ funds even as they take advantage of the market volatility.

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Author: Ali Raza

Bitcoin-Friendly Ex-CFTC Chief Gary Gensler to Advise Biden on Wall Street

Former Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler will be joining Joe Biden’s presidential transition to examine financial regulators.

Gensler, a former Goldman Sachs partner, is known for implementing a new regulatory regime for swaps and has gained a reputation for standing up to Wall Street.

He is also known for his bitcoin-friendly views, which he called a “catalyst for change.” Gensler actually taught a course at MIT called “Blockchain and Money” on how Bitcoin and the technology underpinning it could be used in finance.

It has been under Donald Trump’s presidential term that the IRS added the infamousdo you own crypto” question, and the President told the Treasury to “go after Bitcoin.” Not to mention he himself isn’t a fan of Bitcoin and cryptocurrencies either.

Meanwhile, Gensler has said although many currencies face regulatory scrutiny, Bitcoin “should remain exempt” from that.

Crypto market participants feel positive about Joe Biden and that he could be good for the industry. Even cryptocurrency derivatives exchange FTX CEO Sam Bankman-Fried made the second biggest contribution to Biden.

The real winner of this election has clearly been Bitcoin as not only the price of the digital currency reached some important levels to climb to a 24-month high, but crypto-friendly faces could be seen in the government too.

Quant trader and entrepreneur Qiao Wang also noted that Trump and Treasury Secretary Steven Mnuchin have been “openly hostile towards BTC.”

Not only “a likely Republican senate to counter Dems’ aggressive regulation tendencies,” but Wang also believes, “Democrats are more likely to create inflation which is good for BTC.”

Recently we also saw Wyoming electing Bitcoiner Cynthia Lummis to the US Senate.

KeyBank NA executive Don Graves has also been tapped for the role, a longtime Biden adviser involved in reviewing bank regulators.

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Author: AnTy

ErisX Obtains CFTC License to Provide Futures & Swaps Clearing Beyond Digital Assets

The Chicago-based crypto exchange, ErisX, gains regulatory approval from the U.S Commodities and Futures Trade Commission (CFTC) to start a clearinghouse for all types of futures and swaps. The crypto-focused exchange will expand its clearing services for fully collateralized swaps from digital assets to all traditional assets following the OK by the CFTC.

Back in July 2019, the firm gained the traditional designated contract market (DCM) license from the CFTC, allowing users to trade futures on the platform. The latest license granted to the firm is the traditional derivatives clearing license (DCO), which allows the firm to provide a clearinghouse for all fully collateralized swaps. Previously, ErisX provided these services to digital asset futures contracts listed on its virtual currency exchange – ErisX exchange.

ErisX, backed by TD Ameritrade, offers users both spot and physically settled futures contracts on Bitcoin (BTC) – recently announcing the launch of physically-settled Ethereum futures. The launch of these ETH-settled futures in the U.S is a first of its kind under the regulation of the CFTC.

Before the launch of ETH futures contracts, ErisX Clearing LLC received its approval of the lucrative BitLicense application offered by the New York Department of Financial Services (NYDFS). The exchange joins an exclusive list of crypto firms holding the license, including Binance, Coinbase, BitPay, Bitstamp, and Robinhood.

ErisX platform aims at integrating digital asset products and technology into a reliable, compliant, and robust capital markets workflow.

On the subject of the latest DCO license offered to ErisX, Laurian Cristea, General Counsel at ErisX, celebrated the move allowing listing and clearing of third-party contracts on their platform.

“Our trading platform is a high throughput, deterministic, low latency matching engine hosted in a world-class data center,” Cristea further said.

“Similarly, our clearing system is a reliable, web-based clearing engine designed to meet institutional requirements, and with real-time segregation balances, no other DCO can boast.”

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Author: Lujan Odera

Hong Kong Regulator to Grant Fidelity-backed OSL Digital the First Crypto Exchange License

The Securities and Futures Commission (SFC) of Hong Kong will be issuing a license to cryptocurrency firm OSL Digital Securities, reported Reuters.

OSL, a unit of Fidelity-backed BC Group, became the first firm in November last year to apply for a digital license under the market regulator’s new rules allowing cryptocurrency exchanges to opt into regulation.

The company revealed in its exchange filing on Friday that the financial regulator has agreed in principle to grant the license.

The final approval, however, is subject to certain conditions, which “you’d expect from a conservative regulator in a financial hub,” said BC Group CEO Hugh Madden.

OSL and some of its competitors to welcome the regulation as it would enable the regulated institutions to reduce their risk by engaging with other regulated risks.

In the first half of 2020, BC Group made a net loss of 90.8 million yuan ($13.13 million). Besides its crypto business, which accounts for the company’s bulk of revenue, it also provides business parks and advertising services.

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Author: AnTy

Binance Futures to List BTC/USD ‘Inverse’ Perpetual Futures; Leveraged Up to 125x

Binance announces the launch of its Bitcoin perpetual coin margined futures contract expected on Tuesday, August 11, 2020, at 7 AM GMT. According to the published blog post, traders can leverage their positions on the BTC/USD coin margined contracts up to 125x, to increase their rewards.

Remember, a higher leverage position increases your risk by the same proportion; hence be careful while using leverage.

The statement obtained by BEG states the coin margined BTC/USD contracts will be listed on Binance Futures, the exchange’s derivatives wing. BTC/USD coin margined perpetual contracts are similar to standard crypto futures. Still, they do not have an expiration date, and the margin is set in BTC instead of the conventional fiat currency.

Binance Futures’ BTC/USD coin margined contracts are the second in line to use BTC as the base currency following the recent launch of quarterly BTC/USD coin margined products. The exchange has launched the COIN- and USDT- margined products in a bid to promote the use of BTC and altcoins as the currency of settlement.

Changpeng “CZ” Zhao, CEO of Binance, states the ‘inverse’ futures contracts “helps strengthen the digital asset’s industry standing” as they allow long term crypto hodlers to invest with a long term view on the crypto. On the launch of these margined futures products, Aaron Gong, VP of Binance Futures said,

“[Binance] We are the only exchange that offers users flexible control of their margin balance by either spreading it across all their open positions or setting individual limits for each position they own (cross or isolate margin modes), as well as the ability to switch their margin modes at any time.”

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Author: Lujan Odera

Crypto App, Abra, Forks Over $300k to SEC, CFTC for Offering Synthetic Exposure to US Stocks

Abra, the crypto-based financial app, has settled a total of $300k with the U.S Commodities Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) as per an announcement by both financial watchdogs on July 13. However, the firm did not deny or accept security laws violation charges brought forward by both agencies.

The SEC and CFTC had filed charges against Abra and its Philippine affiliate, Plutus, citing violations in their U.S market operations. According to the SEC, Abra offered unregistered security-based swaps to retail investors and failed to check the eligibility of participants:

“The order finds that Abra marketed its app to retail investors, yet Abra took no steps to determine whether users who downloaded the app were “eligible contract participants” as defined by the securities laws.” reads the SEC press release.

CFTC, on the other hand, charged Abra with facilitating illegal off-exchange swaps based on digital currencies:

“Entering into illegal off-exchange swaps in digital assets and foreign currency with U.S. and overseas customers and registration violations.”

It’s not the first time Abra has found itself at cross paths with the U.S regulators. Last year, the firm had, halted its operations following an SEC warning but resumed shortly after having ‘cut off’ U.S retail investors.

Records, however, show that Abra’s activities were still run from California and partly covered the U.S market despite the SEC threat. Daniel Michael, the SEC Enforcement Division’s Complex Financial Instruments Unit Chief, has since emphasized the underlying obligations in such a case:

“Businesses that structure and effect security-based swaps may not evade the federal securities laws merely by transacting primarily with non-U.S. retail investors and setting up a foreign entity to act as a counterparty while conducting crucial parts of their business in the United States.”

SEC and CFTC Combined Efforts

The two regulatory agencies have been working together as more digital assets seek to launch in the promising U.S retail market. Just recently, the CFTC chairman said that the listing of more crypto-based derivatives is pegged on SEC’s decisions on commodity classifications. That said, Abra’s case is the latest to reveal a combined effort by both agencies to protect U.S consumers. James McDonald, CFTC Director of Enforcement, acknowledged the progress in collaboration with the SEC so far:

“This case underscores, once again, that the Commission will continue working with our regulatory partners to ensure the integrity of our markets, including those involving digital assets.”

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Author: Edwin Munyui

Kraken’s Crypto Facilities Becomes UK’s First FCA Approved Futures Exchange

Crypto Facilities which is also known as Kraken Futures has announced that it has received approval to start derivatives trading services mostly to institutional investors.

On Monday, the firm announced that it had received a Multilateral Trading Facility (MTF) license from UK’s financial watchdog, Financial Conduct Authority (FCA). According to the firm, the license will enable institutional investors to easily trade on the futures platform. The license means that the firm will enhance its clientele to investors that could have been barred by the UK laws from using unapproved exchanges.

In a statement shared with Bitcoin Exchange Guide, Kraken’s co-founder and CEO, Jesse Powell, explained that the firm has been pursuing the licensing as the firm is determined to ensure cryptocurrency is accessible to everyone. He stated,

“This particular license means that a sophisticated class of investors, limited by their own requirements to interface with a regulated venue such as an MTF, will now have access to crypto derivatives in Europe for the first time. More participants means more liquidity and a better experience for everyone.”

The firm also stated that the license makes Crypto Facilities the inaugural and the only approved derivatives company providing exposure to leveraged cryptos within the European Union.

Powell explained that sophisticated clients now have an opportunity to access crypto derivatives within the European Union which is a big step in the region.

Although the UK plans to exit the EU before the end of the year, the talks are not yet over and it remains unclear how regulatory issues will be handled after the exit. Majority of companies are hoping that passporting will be revoked.

The FCA had early this year warned against stern penalties on crypto derivatives platform BitMEX arguing that the company was luring UK customers even without its approval.

The Francisco-based Kraken bought out Crypto Facilities in February last year for an undisclosed amount which analysts estimated to be more than $100 million. At the moment the firm provides upto 50x leverage on various futures products such as Bitcoin, XRP, Bitcoin Cash, Ether and Litecoin.

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Author: Joseph Kibe