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

Bitcoin Overtakes Disney & Netflix After Beating BoA to Become 23rd Largest Asset by Market Cap

Bitcoin is enjoying a bullish this week as the price sets a new 2020 high.

As the leading digital currency surpassed $13,000 for the first time since early June 2019, Bitcoin’s market cap also jumped to $230.5 billion.

Bitcoin’s market cap is on an uptrend ever since the March sell-off, which resulted in it going under $100 billion. But now, we are on a level not seen since mid-January 2018, as per Bitinfocharts.

At the peak of the 2017 bull run in December, Bitcoin recorded a market capitalization ATH of nearly $325 billion.

If Bitcoin’s market cap breaks this high, it will put the digital asset at 16th place, replacing Mastercard based on market cap, 7 spots above its current place while beating the likes of PayPal, JPMorgan Chase, and Home Depot.

Currently, Bitcoin is at 22nd place by market cap, overtaking Coca-Cola, Netflix, Intel, Disney, Salesforce, and Verizon, as per Asset Dash.

Just before this week, Bitcoin had entered the top 30th place flipping Bank of America but this week’s gains of 16.6% thanks to PayPal announcing support for the flagship cryptocurrency has it flying. Jake Chervinksy, General Counsel at Compound Finance said,

“Bitcoin’s value has increased extraordinarily since its price last peaked in 2017. We’ve spent 3 years building mature market infrastructure, resolving regulatory issues, & gaining legitimacy & adoption in mainstream circles. Price will reflect all of this work sooner or later.”

The digital asset still has a way to go. The top spot sits Apple with a whopping over $2 trillion market cap followed by three other trillion dollar brands Microsoft, Amazon, and Alphabet.

For Bitcoin to enter into the trillion-dollar category, the price of each BTC must spike to about $54,000. And to replace Apple to become the biggest asset, Bitcoin’s price needs to jump past $100k. But as Dan Tapiero, co-founder of 10T Holdings, notes,

“It’s still so early for bitcoin. Still at the birth of a new global asset class.”

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Author: AnTy

COVER Protocol to Update Tokenomics After Receiving Backlash from the Community

  • So, the new lease on life is not really working out well for SAFE.
  • The token price dropped nearly 170% in the past 24 hours to under $100, only to find its ground just above $150 today.
  • This severe drop in the token price has been the result of the latest update shared by the rebranded COVER protocol.

Over the weekend, Cover protocol, originally called SAFE, shared its tokenomics with the community that the maximum supply of COVER tokens will be 160,000. The token generation will start on Nov. 20.

While 1% will be vested to the treasury, 12% of the COVER supply will go to the team. But what the community is finding problematic is the “significantly diluted early supporters of the project.”

Out of the 87% COVER token supply allocated to its community members, only 12% goes to original SAFE token holders “who backed the project,” with 90 days vesting period.

70% of the new supply is to be earned through shield mining in a new yield farm that is to be launched in the following 12 months.

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“Early supporters of COVER ( SAFE holders, not farm and dumpers) are now diluted by 5.8x,” noted Jason Choi of crypto fund the Spartan Group. He added,

“Was hopeful that COVER Protocol could be a viable addition to DeFi insurance, but the team’s repeated reckless decisions suggests otherwise. Still Nexus Mutual’s market to lose.”

The COVER protocol aims to “allow anyone to buy coverage on anything.” It is basically insurance coverage on smart contract risk.

The crypto community had questions for all the prominent advisers of the project, including YFI’s Andre Cronje, FTX CEO Sam Bakman-Fried, @bluekirby — who was involved in the Eminence.Finance $15 Million rug pulling, NFT project Off Blue chaos, and YFI dump and has now disappeared after making millions — and others.

Around the mid of September, SAFE enjoyed a pump after its revival as the COVER protocol. More importantly, it was the names of these advisors that had the community excited about the project again following the initial setback of inexperienced developers and early dumping.

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To clear his name from the COVER debacle, Sam said he has “no idea” what’ is happening with the project and that he is “not involved in any of the decision making.”

In response to the heavy criticism, the COVER team shared its intention behind the new tokenomics was to “ensure users who participate in the product directly benefit the most” which they say will “benefit the product in the long-term.”

But they acknowledged that the proposed plan has neglected the existing supporters and “reached out to ALL our advisors” and is now working on a revised tokenomics plan that will be released shortly.

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Author: AnTy

Bitcoin in For Another Bull Cycle as BTC Supply Continues to Get Eaten Up Like Never Before

Over the weekend, the price of Bitcoin started rising and is currently trading above $11,650.

Interestingly, it has been three months, 93 days exactly, since Bitcoin was founded in 2009, that it has spent above the current price of $11.5k.

More importantly, it’s the first time that bitcoin has been above $10,000 with realized volatility extremely low, as per Skew.

While trading in the green, the ‘real’ amount of the BTC traded in the past 24 hours has fallen drastically to just over $700 million.

This lack of volume could be on one side due to the lack of price action in the market and the weekend. On the other hand, the BTC balance on exchanges is on a constant decline. An analyst noted,

“More and more Bitcoin getting out from exchanges and most probably being transferred to non-custodial wallets. This suggests slightly lower liquidity and lower selling pressure going forward.”

BTC Balance on Exchanges
Source: Glassnode

According to Chain.info, in the past 24 hours, the biggest outflow of BTC has been recorded on OKEx of 6,269.

Last week, the exchange suspended all digital currency withdrawals after one of its key holders who has been helping the authorities in an investigation was unreachable.

Additionally, as per Coin Dormancy, a measure of “old hands selling out,” which usually sold the tops have been acting differently in the current cycle. “They sold the bitcoin bottom at $3-$4k, they are selling right now,” observed on-chain analyst Willy Woo.

Coin-Dormancy
Source: Glassnode

Another Bull Cycle in the Making

While Bitcoin continues to move out of exchanges in favor of cold wallet storage, for the first time, public companies are gobbling up more and more BTC by making it part of their Treasury. Grayscale, yet again, for the third time in a row, had a record inflow in Bitcoin.

According to Grayscale’s Q3 report, they bought 77% of all the BTC mined in the quarter, up from 70% in Q2 and 27% in Q1. Dan Tapiero, co-founder of 10T Holdings said,

“SHORTAGES of Bitcoin possible. Barry’s Grayscale trust is eating up BTC like there is no tomorrow. If 77% of all newly mined turns into 110%, it’s lights out. Non-miner supply will get held off mkt in squeeze. Shorts will be dead. Price can go to any number.”

Overall, the market is bullish on digital assets, as Pantera Capital wrote in its last week’s investor letter; besides the network fundamentals, all the money printing the Federal Reserve and other central banks are doing works in bitcoin’s favor.

“We strongly believe we are in the early stages of a large bull market fueled by both a powerful global macro tide and growing fundamentals in the underlying technology.”

Major Bitcoin Price Cycles
Source: Pantera Capital

In its decade long life, Bitcoin has gone through three major prices already and seems to be primed for yet another one.

“My intuition from trading waves for 35 years is we’re in for another one,” wrote Dan Pantera, adding, “it’s still a massive hype cycle roller coaster.”

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Author: AnTy

The Price of Bitcoin Lags Behind The Growth of Crypto ATMs, Which Surpassed 11,100 Installs

While the price of cryptocurrencies is taking its sweet time to reach their all-time highs, Bitcoin is holding strong above the important psychological support level of $10,000, currently above $11,300; the same can’t be said of the fundamentals.

The crypto industry continues to grow fast, and the latest metric to reflect this is the crypto ATMs.

For the first time, the number of crypto ATM installations has exceeded 11,100, representing a surge of almost 75% since the beginning of this year, as per Crypto ATM Radar.

In 2020, already more than 4,700 new bitcoin ATMs have been added, more than double of last year’s growth as only about 2200 new crypto ATMs were installed in 2019. The growth of these ATMs has seen almost a parabolic uptrend in 2020.

Bitcoin ATM Installations Growth
Source: CoinATMRadar

The biggest net change in crypto ATM numbers was recorded in September as 973 ATMs were installed this month, which has been growing since May. As a matter of fact, throughout 2020, more than 250 ATMs were installed every month, unlike ever before.

Genesis Coin is the dominant contributor to this growth as it manufactured 35.9% of these ATMs, followed by General Bytes, with its share just under 30%. Other manufacturers account for less than 10% of the number of cryptocurrency machines installed by manufacturer share.

As always, most of these crypto ATMs, 86.6%, are based in North America, with the US representing 78.6%. Europe is another continent with 11.3% of this share, while others account for less than 1%.

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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

BitMEX Loses its Dominant Position; Competition Among Binance, ByBit, & Others Heating Up

Since starting the month, the price of bitcoin has weathered numerous storms.

From KuCoin’s $281 million hack, US President Donald Trump testing coronavirus positive, UK’s FCA banning crypto derivatives to FATF red-flagging hardware wallets, Europol prioritizing privacy wallets, and of course, BitMEX’ indictment, BTC held through it all.

The leading digital currency kept to $10,000 strongly, and went as high as $11,500 last week, recording a 5.24% increase.

However, the same couldn’t be said of the popular crypto derivatives platform BitMEX which saw its BTC balance decreasing by 30%.

As a matter of fact, BTC futures annualized rolling 3-month basis actually went negative on BitMEX while on FTX, it was +6.52%, +6.30% on Binance, and +5.65% on Deribit.

Although still having a 6% difference to other exchanges, it is now gradually moving upwards to 4%.

Bitcoin futures on the platform are also trading at a discount at $11,460 compared to $11,527 on Kraken, $11,582 on Deribit, $11,594 on FTX, and OKEx, and above $11,600 on both Huobi and Binance for the month of December.

Stealing BitMEX”s Share

Meanwhile, open interest on the exchange went down hard to 35k BTC on the weekend, from the high of 55k BTC, $615 million right before the crash in direct response to criminal charges brought on by the CFTC and DOJ.

OI on BitMEX does not show any signs of slowing down its decline, although currently, it sits at 36k BTC, about $413 million.

Meanwhile, other platforms are capturing this as this month; the total OI increased by 16.6%.

While percentage-wise, FTX saw the biggest jump of 51.2% ($85 million), OKEx was the one that recorded the largest spike in absolute terms at $110 million (13.5%), as per Skew.

Besides BitMEX every platform experienced a rise in their open interest: CME 43.4% ($150 million), Deribit 35% ($60 million), Kraken 26% ($11 million), Bakkt 23% ($3 million), Binance 22.3% ($93 million), Bybit 19.6% ($76 million), Huobi 8% ($41 million), and Bitfinex 4.8% ($3 million).

Binance has actually taken the leader position in the space in terms of open interest with Bybit close behind, surpassing the OI on BitMEX. Vetle Lunde, an analyst at Arcane Research, noted,

“BitMEX has lost its dominant position while the competition in the derivative markets has been sharpened as more exchanges have gained traction.”

Open Interest Distribution
Source: Arcane Research

Traders left BitMEX but didn’t leave the market; they have moved on to other exchanges to trade perpetual BTC contracts.

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Author: AnTy

Bitcoin in Re-Accumulation Phase, Volatility Hits Two-Year Low

Over the weekend, the price of Bitcoin started moving north, making its way from around $10,400 to above $10,700. Trading in the green currently, but the ‘real’ volume at just $824 million is not providing confidence.

While volume on spot exchanges is low, institutional interest in Bitcoin has been “flashing strong since the 27th of July, the day it went through $10k.”

Also, just a small percentage of greens have been enough to carry the rest of the crypto market up with it. In a rare bout of gains, XRP spiked over 8%.

This positive performance across the markets is the result of President Donald Trump’s recovery after contracting coronavirus.

BitMEX Narrative

The market is trying to recover from the BitMEX incident last week. As a result of criminal charges on the popular derivatives platform, more than 45,000 BTC have been pulled from the exchange.

Bitcoin balance on BitMEX has fallen to 120,000, a decline of 27%.

The day the news of criminal charges from CFTC came, the exchange saw the largest negative net flow to date, as 44,000 BTC were withdrawn. Almost 30% of them were transferred to Binance and Gemini in equal amounts.

Open interest, meanwhile on the exchange that crashed 24% remains at 43k BTC, around $456 million — levels not seen since May 2020.

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Besides BitMEX, another narrative at the top of the market’s agenda is the volatility the market participants will be subjected to in the coming weeks ahead of the US elections.

Getting Too Comfortable?

Bitcoin’s 180-day volatility has dropped to its lowest since November 2018, reaching a 23-month low, indicating the market has been mostly unfazed by the unsettling news of BitMEX. Denis Vinokourov of Bequant noted,

“Implied vol remains well contained and even the skew profile, for both Bitcoin and Ethereum, shows signs of stabilization. The market is very crowded, and it is difficult to see how this will change, especially as the entire liquidity provision is dependent on cheap liquidity (Bitcoin) and yield offerings by DeFi platforms (with Ethereum as the backbone).”

During these last couple of weeks, Bitcoin weathered the several negative news that otherwise would have crashed the digital asset’s price — first KuCoin hack losing $281 million customer funds then BitMEX, and the next day the news of Trump testing coronavirus positive. Trader and economist Alex Kruger said,

“It’s been impressive how little bitcoin has moved during this whole Trump ordeal, as well as during the Bitmex-CFTC news. Vol sellers getting too comfortable.”

This could also mean that bitcoin is in re-accumulation mode. Analyst Cole Garner notes,

“Binance with a 2800 BTC sellwall at $11k. Unstoppable force meets the immovable object. Welcome to re-accumulation.”

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Author: AnTy

A ‘Big’ Positive Step Towards the Bitcoin ETF Approval

In terms of the price of Bitcoin, criminal charges on the popular cryptocurrency derivatives exchange BitMEX may be bearish, but the same isn’t true for the overall market.

Just like it is bullish in the long term, this could help in getting the much-desired Bitcoin exchange-traded fund (ETF) an approval.

“Assume the CFTC & DOJ bring Bitmex down. The absence of Bitmex may then result in US exchanges and OTC desks becoming markets of “significant size,” sharply increasing the odds of the SEC approving an ETF,” said trader and economist Alex Kruger.

These past few weeks, several attempts at a Bitcoin ETF have been made to no avail as every single one of them has been rejected by the agency over the grounds of manipulation.

But the crypt community hasn’t let go of the hope for approval eventually. An ETF holds so much importance for the community because it is expected to bring a large number of inflows in the market, as such, pushing the prices higher. “A parallel demand curve shift.”

An ETF would be the “opportunity of a lifetime” that would allow retail to front-turn the institutions for once. Former macro hedge fund manager and a Bitcoin proponent, Raoul Pal expect “every” pension plans and family offices to allocate some of their money to it — billions of dollars pouring into it.

A Cue from CFTC

Seychelles incorporated exchange is known for its 100x leverage, and according to Bill Barhydt, co-founder, and CEO of Abra, it has been the key reason we don’t have a US Bitcoin ETF.

“Their market is easily manipulated by large traders. Not a valid reason for no ETF imo. Just a fact,” he said.

Although it may not be sufficient for an ETF approval, it is a big step towards that, for sure.

Adding to the expectation is the statement from Chairman Heath P. Tarbert, giving a hint of what’s to come, in which he said digital assets hold “great promise” not only for the derivatives markets but also the US economy.

“For the United States to be a global leader in this space, it is imperative that we root out illegal activity like that alleged in this case. New and innovative financial products can flourish only if there is market integrity. We can’t allow bad actors that break the law to gain an advantage over exchanges that are doing the right thing by complying with our rules,” Tarbert said.

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Author: AnTy

Grayscale Bought 17,100 BTC Last Week, Now Holds 2.4% of Bitcoin’s Supply

As the bitcoin price continues to remain under $13,000 for over a year now and around $10,000 for more than the past month, there is no better time to stack some sats.

With the leading digital currency still 45% away from its peak of $20,000, ‘buy the dip’ opportunities are being taken advantage of not just by small players but also big ones.

Grayscale Bitcoin Trust (GBTC) added 17,100 BTC to its coffers the past week, increasing its aggregate bitcoin position to 449,900 BTC. With this, Grayscale now holds 2.4% of the current bitcoin supply.

September has been a dull month, not just for the price of bitcoin but also for Grayscale. While BTC price is down -8% this month, Grayscale barely saw any change in its total bitcoin position up until Sept. 22nd, as per the data provided by Bybit.

This latest accumulation could be why bitcoin price didn’t dip further despite strong bearish market expectations.

“What’s interesting about Grayscale Bitcoin Trust is it’s Hotel California, those coins are free to come in, but they can never leave. It’s quite brilliant to perpetually drive more coins into the Trust, at the sacrifice of decentralisation,” said on-chain analyst Willy Woo.

“Investors can sell. Doesn’t mean coins in the Trust get released, just means the Trust becomes undervalued, attracting new investment. It’s a smart “one way valve” to ensure assets grow, including the fees over the long run,” he added.

More and more institutional players are taking an interest in bitcoin this year, especially after the central bank started printing money. Just last month, we saw MicroStrategy added bitcoin as an inflation hedge to its reserve. Then this month, it added more BTC, bringing the total to 37,800 BTC.

Interestingly, with this, MicroStrategy’s biggest investors that include major asset managers BlackRock and Vanguard and Norway’s $1 trillion oil fund — having a combined holding of about $100 million — also have indirect exposure to bitcoin.

As Micah Erstling, a trader at crypto market maker GSR, said, “Institutional curiosity and explorations continue to increase.”

Also Read: Bitcoin Scales Just Fine As A Store Of Value Says MicroStrategy CEO

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Author: AnTy