Bitcoin Is Heating Up; Funding Rate on Perpetual Contracts Has Finally Popped

Bitcoin has gained more than 70% since October; today, some it broke above $19k after taking a rest since breaking the $18,000 level last week. But it’s to be seen if $20k is coming soon.

It has been just this year in March, during the global sell-off, that Bitcoin went down to $3,800, and this week, we made a new all-time high at nearly $19,420. We are just over 4% away from the all-time of $20,000.

Despite these huge gains, the market has been pointing out there has been no change whatsoever in the funding rate.

A funding rate is basically used to keep the price of the perpetual swap contract, futures contracts without an expiry date, in line with the underlying asset. Every 8 hours, you will either be paying or receiving funding if you have an open position.

In a positive funding rate, longs pay the shorts; in a negative funding rate, shorts are the ones paying the longs.

Crypto market traders have been pointing these past few weeks how there has been no change in the funding despite the rally.

Finally, bitcoin funding rates on major cryptocurrency exchanges have increased considerably over the past few days.

“Long positions are heavily paying shorts – potentially incentivizing more traders to start taking the other side,” noted Glassnode.

The funding started increasing towards the weekend when Bitcoin dropped to about $17,500 level. The digital asset has been primarily keeping between $18k and $19k, taking a breather before going higher.

The funding rate on Bybit is the highest, having reached 0.16% and 0.0113% on Binance, with the mean going to 0.093%.

It is possible; finally, the market will get to have a correction everyone is waiting for some time now. During the 2017 bull cycle, the market had several pullbacks of an average of 30%.

“BTC finally heating up. Every time funding popped like this in the last six months, a strong correction followed within 24H. Basis also popping,” said trader and economist Alex Kruger. However, he added:

“This time may be different though: retail mania kicking in. Google Trends aside, I have not seen such retail interest since Jan/2018.”

The trader is expecting a repeat of this past weekend in a few days.

“This is short term leverage piling on top of the systematic spot buying we’ve been seeing for BTC and ETH.

Leverage accrued after an extended rally makes longs vulnerable. The underlying spot bid is widespread, so thinking this time is different, and leverage has room to build up.”

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Author: AnTy

Strong Institutional Demand for Bitcoin, CME Becomes Second Largest BTC Futures Market

Bitcoin’s price made a big shift this week as the bulls gained control of the market and pushed it past $13,000.

A similar shift has been seen in the open interest recorded by the bitcoin trading platforms. The biggest change has obviously been in derivatives exchange BitMEX, which has been seeing a constant decline since earlier this month when CFTC brought down criminal charges against it.

From 55k BTC OI on Oct. 1st, it fell to 28k BTC yesterday, a decline of nearly 50%.

In USD terms, the OI has dropped from $781 million in late Sept. to under $600 million, but the recent jump in BTC price helped it get back above it but barely.

Interestingly, CME enjoyed a good uptick during the same period, showcasing strong institutional demand for bitcoin.

With $790 million in OI this month, the OI on CME recorded a growth of almost 130%, from $345 million on Oct. 2nd. And this uptrend helped the regulated trading platform become the second-largest futures market for bitcoin.

“The OI on the CME BTC futures has climbed aggressively lately. CME is currently the second-largest futures market for bitcoin, holding 15.7% of the total OI in the BTC futures market. This is still slightly below CME’s record share of the total market OI from August of 16.2%,” noted Vetle Lunde, an analyst at Arcane Research.

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Another crypto exchange seeing an incremental exchange in OI is FTX, which saw an increase of just over 103% from $166 million at the beginning of this month to $337 million.

Other exchanges Deribit (+79%), Binance (+72%), ByBit (+44.5%), Kraken (+41.4%), Bitfinex (+35%), OKEx (+25%), and Huobi (+18%), all recorded an uptick as well but of small percentage compared to CME.

Unlike others, Bakkt’s 50% wasn’t sustainable, and it continues to move up and down while keeping below $18 million.

Markets are healthy, not just OI, but solid activity has been recorded across spot, futures, and options as well. The big session has been the result of PayPal announcing support for cryptocurrencies.

Also Read: ‌PayPal Exploring Acquiring Crypto Companies, Already in Talks with Bitcoin Custodian BitGo

And with this, futures are no longer in backwardation.

“Bitmex, bybit BTC futures are now higher than spot ($10-25). An interesting shift of market sentiment. People are finally starting to become bullish. But that doesn’t mean this is the top. It can take weeks or months for the top to happen. Funding rate will be the key indicator,” noted trader Crypto Squeeze.

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Author: AnTy

The ‘Beast’ Yearn.Finance Launches a ‘Completely Decentralized Lending Protocol’

DeFi darling Yearn.Finance is praised and gained a cult-like following thanks to its innovative and decentralized approach.

Every other day, yEarn creator Andre Cronje announces something new that gets the community excited and YFI surging.

On another such day, amidst the renewed uptrend in DeFi tokens after last week’s overdue correction, YFI jumped 20% to $31,252 but still 18% down from its all-time high of $38,869, as per CoinGecko.

“YFI is a cash generation machine, while many coins from prior cycles are digital petrocks,” said trader and economist Alex Kruger, who recently called Yearn Finance “a beast.” He added,

“Andre is a lightning fast builder delivering useful products. Something spectacular to observe, and unique within crypto. And he has a team now.”

Latest Offering for the DeFi

Today, Yearn.Finance, which has over $800 million in TVL and is next in line to be the Unicorn, is one of the hottest protocols in the DeFi space, which optimizes the yield on pools. In recent times, they have tokenized debt and insurance and launched vaults that allow users to put crypto-assets in and earn yields.

On Thursday, Cronje announced StableCredit, “a new protocol for decentralized lending, stablecoins, and AMMs.”

To be made available in the coming weeks, the idea here is to completely decentralize the lending system with this protocol where users can provide any asset and create tokenized credit called StableCredit USD.

For instance, you provide x amount of USDC, and the protocol mints “x * USD value StableCredit USD” where the USD value of 1 USDC will be determined by USDC price oracle.

The USDC and StableCredit USD are provided into the 50:50 AMM; the automated market makers define the premium at which the user borrows or repay assets.

The StableCredit protocol then calculates the system utilization ratio, up to a maximum of 75%. The utilization ratio, which defines the amount of credit line the user can extend to borrow against, is created by AMMs.

In tokenized debt, anything over the credit line and you get liquidated.

Now, the utilization value of the supplied USDC is minted as StableCredit USD, which is “lending credit” that can be used to borrow other assets as well.

The community is, as expected, excited about the latest development. And although for now, as Cronje himself said, the DeFi space is experiencing a greed cycle with the governance “Ponzi” in the middle of it, developments like these will see that the protocols like Yearn.Finance, Aave, and Compound sustain in the long term when the greed ends.

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Author: AnTy

Anheuser-Busch InBev, ING Bank, & Rolls Royce Join Mousebelt’s Blockchain Education Alliance

Blockchain Education Alliance, an initiative by Mousebelt, has gained four new significant members according to an announcement by the blockchain accelerator on August 17. They include margin crypto trading platform Multi.io, Rolls Royce, Belgium brewing firm Anheuser-Busch InBev and Dutch-based ING bank.

The project whose fundamental goal is to accelerate blockchain education and research now has 26 members following this addition. Having launched in October 2019, pioneer members included ETC Labs, Nem, LTO Network, Harmony One, Wanchain, ICON, Tron, and the Stellar Development Foundation. It was not long before the initiative attracted the likes of Binance, Mastercard, KuCoin crypto exchange, and Constellation Labs onboard as well.

With such players already approving the Blockchain Education Alliance strategy, some of its milestones include a 72-hour live blockchain education event that was held in May. This virtual conference was dubbed ‘REIMAGINE 2020’ and featured networking events, panel and debates, and a continuous livestream of the keynotes.

Given the prevailing lockdowns at the height of the COVID-19 pandemic, REIMAGINE 2020 attracted students from various universities, giving them exposure to cutting edge tech like blockchain as well as an opportunity to meet with the industry veterans. Mousebelt’s head of Education, Ashlie Meredith, further pointed out that they are looking to nature skills given the looming uncertainty in the global economy,

“In a time when many students will not be returning to campus, increasing opportunities for educational experiences, jobs and internships is of utmost importance.”

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Author: Edwin Munyui

Bitcoin Futures Trading at a High Premium; Already Hitting $12,000 on CME

Bitcoin has yet again gained momentum, with people expecting for $12k to hit soon. According to analyst Mati Greenspan, for a sustainable rally, a small retracement before we blast through $12,000 would be good for the largest digital currency.

“But judging by the current temperature, I’m not even sure a cooldown period is possible,” he said in his daily Quantum Economics email.

However, bitcoin has already jumped the $12,000 resistance on CME Group. Yesterday while people were awaiting $12k, BTC futures went as high as $12,100 before dropping back under $12k level.

The positive thing is while the spot price is around $11,780, CME Bitcoin futures are trading at $11,955, at a premium of nearly 1.5%.

Source: TradingView

The futures premium has been soaring since last week amidst the bitcoin rally, a trend which is continuing this week as well while the digital asset continues to rise further.

When it comes to September contracts, CME bitcoin futures contracts are trading at even a larger premium than the retail exchanges. The September premium has increased from 2.05% to 2.76% over the last week, as per Arcane Research. Denis Vinokourov of Bequant noted,

“The futures term structure remained in deep contango, suggesting risk appetite is aplenty, and this demand for leverage has been particularly evident in the lending market, where traders were seeking to borrow fiat versus crypto holdings to maximise basis trading strategies.”

The premium rates at retail exchanges have also been rising during this period, indicating strong bullish sentiments. At the time of writing, BTC was trading at $11,800 on Bitfinex, $11,824 on Coinbase, and $11,831 on Bitstamp and Gemini.

Increasing institutional demand

As bitcoin started rallying last week, the futures market saw a sudden increase in its funding rates, a tool to reassure the price of the perpetual swap is kept close to the underlying asset. The funding turns positive when the perpetual contract is trading above the BTC spot price, which has long trades paying a fee while short trades received a rebate.

The funding rates soared this week, on Binance they peaked at 0.14% as “investors sought to get leveraged exposure to the upside,” only to fall back to near normal state at 0.021%. The crypto data provider states,

“This is a healthy sign in the market, as it indicates that the market is stabilizing, and the leveraged longs are on a decline.”

Besides all this, trading volume is also enjoying a surge. Bakkt had its moment when it hit a new all-time high of $132 million, 200% higher than the old record signaling a shift in institutional sentiment to bitcoin exposure after it broke $10,000.

The total open interest on Bakkt futures jumped to $24 million last week, a spike of 550% from the lows on July 16th. This week, it has further grown to $26 million.

CME’s OI has been having even more eventful days as it reaches $830 million, currently holding 16.8% of the total open interest in the BTC futures market, a record high dominance for CME — a clear indication of increasing institutional demand for bitcoin.

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Author: AnTy

DeFi FOMO is Strong But What’s to Come Once This Craze is Over?

The DeFi space has been picking up heat for some time now as the tokens gained a lot of interest after their prices skyrocketed.

In 2020 so far, some of the DeFi coins like Aave have jumped 3,185%, Kyber Network 898%, Bancor 498%, Loopring 493%, REN 445%, Synthetic 235%, 0x 112%, and Augur 101%.

In the past year, projects like Aave and Kyber Network have also gained 7,000% and 1,000% against BTC.

The market cap of Defi space has been flying, now close to reaching $9 billion. The total value locked in the sector is also hitting new highs, the latest one being $2.62 billion, as per Defi Pulse.

In the past few weeks, especially after Compound’s stellar performance following the listing of its governance tokens just days after launch on Coinbase, which is also backing the project, took the DeFi space by storm.

However, ConsesnSys’s latest report states, “the increased activity caused by the activity around COMP has come from those already inside the ecosystem.”

Also, “although COMP has caused massive waves in the DeFi community and greatly impacted ETH locked and DAU, it has not brought many new users into the ecosystem.”

Many also argue that Defi’s gains are just recycled money, flowing from large-cap cryptos to these latest hot DeFi tokens, and no new money is entering into the sector.

A Long Journey Ahead for DeFi

“Real talk. There’s so much Defi FOMO but few talk about the elephant in the room: scalability,” said crypto analyst Qiao Wang. According to him, “latency and throughput are the biggest hurdles to Defi adoption,” and it will be a long journey for Defi.

“Most people seem to think that we’ll see exponential growth in the next few months/years. More likely than not, I think we’ll see step-function growth. Grow -> hit latency/throughput ceiling -> infra breakthroughs -> grow again,” Wang said.

Recently, DeFi’s biggest lending protocol Compound was integrated with Curve, a crypto custodian that services institutional investors while Aave, which has “become a DeFi VC darling” with the sale of $3M worth of LEND tokens to crypto funds Three Arrows Capital and Framework Ventures. Aave is dominating the long-tail lending market, with its AUM heavily weighted towards mid-cap digital assets.

“Aave is taking the Binance strategy to scaling while Compound seems to be taking the Coinbase strategy,” said Spartan Black, of crypto hedge fund The Spartan Group.

What Once the Craze is Over

It’s not only the price of Defi tokens that has captured people’s interest. The interest rates offered are just as lucrative, some offering higher than 10% yield on some digital assets.

But Ethereum co-founder Vitalik Buterin said, “these interest rates do not reflect on anything that is remotely sustainable. It’s just a temporary promotion that was created by printing a bunch of compound tokens, and you can’t just keep printing compound tokens forever.”

According to him, once this craze is over, DeFi will no longer offer double digits interest rates but eventually come down on par with those offered in the traditional financial system.

While Buterin thinks synthetic assets would improve the space, Litecoin creator Charlie Lee isn’t “too excited” or optimistic about the future of DeFi.

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Author: AnTy

Bitcoin Cash Price (BCH) Turns Buy On Dips, $332 Holds Key

Recently, bitcoin cash price gained bullish momentum and climbed above $325.00 and $330.00. BCH to USD turned buy on dips and it is likely to accelerate higher above $350.00.

Key Takeaways: BCH/USD

  • Bitcoin cash price is showing a lot of positive signs above $332.00 against the US Dollar.
  • BCH/USD surged above the key $324.00 resistance and a bearish trend line on the 2-hours chart (data feed from Bitstamp).
  • Bitcoin is now trading above $9,050 and it could rise further above the $340.00 resistance area.

Bitcoin Cash Price Analysis

This week, there was a steady rise in bitcoin cash price above the $315.00 and $320.00 levels. BCH/USD even broke the $332.50 resistance area to enter into a positive zone.

Bitcoin Cash Price

Looking at the 2-hours chart, bitcoin cash price gained pace after it settled above $332.50 and the 50 simple moving average (2-hours, purple). More importantly, there was a break above a key bearish trend line at $324.00.

The price extended gains above the $344.00 and $350.00 levels. A high is formed near the $352.83 level and the price is currently correcting lower. It is trading below the 23.6% Fib retracement level of the upward move from $332.61 to $352.83.

An initial support on the downside is near the $343.20 level. Besides, the 50% Fib retracement level of the upward move from $332.61 to $352.83 is near the $342.72 level to act as a strong support.

If there are more downsides, bitcoin cash price could revisit the $332.00 support level. The 50 simple moving average (2-hours, purple) is also positioned near the $332.00 area to provide support.

Any further losses may perhaps push the price back into a bearish zone towards $315.00. Conversely, the price might start a steady increase above the $348.00 and $352.00 levels.

The first major resistance is near the $355.00 level, above which there are high chances of a rally above the $362.00 and $365.00 levels. In the mentioned case, the next stop for bitcoin cash bulls is near the $370.00 level.

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Author: Aayush J

Galaxy Digital Granted Rights to Underwrite Registered Public Securities Offerings

Galaxy Digital, the crypto investment bank created by Michael Novogratz, has recently gained approval from the Financial Industry Regulatory Authority (FINRA) to engage in a new kind of operation. Now, the digital bank will be able to underwrite registered public offerings of securities in the U. S.

This plan has not started today. Galaxy Digital was already planning to work on token offerings for a while now. Novogratz, the founder of the company, has worked on Goldman Sachs before, so he really understands the financial market very well. According to him, underwriting securities offerings can be a huge opportunity for the company to expand the reach of its services.

According to Novogratz, the crypto industry is still very young and so is the company. Because of this, he believes that the right way to go is to be sober and patient. This way, the business will naturally grow over time, which is exactly what it is doing right now.

The executive also affirmed that one of the reasons to get this new approval was because there are already some signs that this is a space in which growth is possible.

Speaking about growth, some companies in the industry are already interested in Initial Public Offerings (IPOs). Bitmain and Coinbase, for instance, are two large firms of the crypto space which were already reported to be interested in this kind of move.

With the growth of the industry, we’ll possibly see many other companies entering this market as well.

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Author: Hank Klinger

Shinhan to Team-up With Kakao’s GroundX and Hexlant to Enhance Blockchain Security System

Shinhan has gained a much-deserved reputation as one of the oldest and largest banking companies in operation within South Korea, has announced a brand new partnership with two emerging Fintech companies. The objective? to collaborate and build a brand new security solution with the use of blockchain technology.

For this plan to come into effect, the bank has signed a broad sweeping agreement with the blockchain subsidiary company behind the Global messaging app – Kakao – known as GroundX, as well as working with the blockchain developer Hexlant. This is according to a report from the local news outlet – The Korea Times, which reported on it this week.

This new deal will effectively see these three companies work together to develop and implement a private key management solution for use within Shinhan, GroundX, which will be providing the underlying blockchain platform, and lastly, Hexlant will be providing the infrastructure which will also include the creation of an ‘Anti-cracking program,’ according to the report. What makes the whole collaboration even more exciting is the prospect that testing may begin as soon as October this year.

“Blockchain technology has gained attention from the financial sector for its advantages, but financial firms have experienced difficulties in applying the technology to their system,”

this is according to an official speaking on behalf of the bank.

“Shinhan Bank will provide a convenient user-friendly interface under the deal with Ground X and Haxlant.”

GroundX has a pretty firm reputation in the field of blockchain technology already. Having previously launched its own dedicated blockchain for use across Kakao’s suite of services over the course of June. Referred to as Klaytn, the network has alluded to being more than 150 times faster and scalable compared to Ethereum (Even though it serves as a hybridized private blockchain solution with permissioned nodes which can actually be double-checked by public members of its community), along with having its own native cryptocurrency known as ‘Klay.’

Back in May, Shinhan managed to successfully launch its own blockchain platform in order to verify various items of proof required for complex procedures such as credit lending, qualification or certification documents, seeking cost as well as speed improvements overall.

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Author: James Fox

Billionaire Michael Novogratz’s Firm Galaxy Digital Gets Regulatary Nod To Launch Crypto IPOs

Billionaire-Michael-Novogratzs-Firm-Galaxy-Digital-Gets-Regulatary-Nod-To-Launch-Crypto-IPOs

Galaxy Digital has gained approval from the Financial Regulatory Authority (FINRA) to conduct initial public offerings (IPOs) for cryptocurrency companies.

The endorsement authorizes Galaxy Digital Advisors to act as an underwriter to certified public offerings of equity, debt or other corporate securities in the United States. This appends to its current capabilities to manage private placings of securities as an induction agent and to provide counsel on mergers and acquisitions.

Ian Taylor, Head of Advisory Services for Galaxy Digital says:

“This is an important step in the development of our advisory franchise. With this approval, we now have the ability to finance digital asset and blockchain technology companies through their entire life cycle – from founding, through private capital raisings, to their initial public offering and beyond.”

Galaxy Digital is a diversified, multi-service merchant bank dedicated to the digital assets and blockchain technology industry. Their team has extensive experience spanning investing, portfolio management, capital markets, operations, asset management, and blockchain technology.

On this announcement, Novogratz says:

“We are excited to add this capability to the suite of services we provide. No other firm combines our expertise in digital asset and blockchain technology companies with the ability to structure, distribute, and now underwrite, financings. This approval enables us to expand our ability to educate investors newly interested in this growing sector and further institutionalize the markets in which we operate.”

Novogratz is a major Bitcoin proponent who has recently predicted the price of Bitcoin to touch $20,000 by 2020. He also went on to claim that Bitcoin is finally reaching the end of the saturation point as a digital store of value.

ICO enterprise has decreased to a standstill. Still, every month schemes still get financed through ICOs. New instruments like IEOs (Initial Exchange Offerings) and STOs (Security Token Offerings) have shown that desire for lower friction financing persists despite regulatory challenges. Novogratz is certainly gunning to be the pioneer to fulfill this demand.

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Author: Sritanshu Sinha