CME Gaps for Bitcoin Price Fill over 95% of the Time: Research

CME Gaps are popular topics that frequently get talked about in the crypto market, which usually has seen Bitcoin dumping.

These Gaps occur because unlike the Bitcoin market that works around the clock, no matter if it’s the weekend or a national holiday, the regulated market doesn’t. Bitcoin is never down. However, the regulated market, CME’s market doesn’t share the same 24/7 global trading hours of most other crypto exchanges.

During this period, no trades are conducted which causes “gaps” to form on CME Bitcoin price charts which rarely form on other exchanges.

What’s’ the best strategy to trade the CME Gap

Talking about this apparent anomaly, Market Science, a research service released a CME Gap Study to analyze its effects.

The firm found that there is no clear reason for what caused such a phenomenon to occur, though it’s likely it originated in equity and fixed income markets, “where vastly diminished overnight liquidity effectively closes them” as a result instruments in the market open at different prices than they close at.

In the Bitcoin market, gap filling is one of the most popular strategies around CME downtime. And since the launch of Bitcoin futures in Dec. 2017, these gaps filled 95% of the time. In 77% of these cases, Bitcoin made a retracement in the subsequent week.

“Virtually all the moves are actually retraced before next Friday market close,” it said.

But it doesn’t mean trading for that gap fill with leverage is the strategy to follow. Market Science says what one needs to do is to open a trade in the opposite direction of the weekend gap upon the CME market open and then close at the gap open level if touched. In case not touched, hold until either the next CME Friday market close or the next CME Sunday market open.

Fading the gaps have a negative edge

However, some gaps don’t fill for an entire year but these are unprofitable most of the time that gaps don’t fill. The losses, in this case, are pretty significant, “offsetting the high strike rate for gaps closing.”

Fading the gaps it said has a “significant” negative edge in the 1-2 days following the CME open. The better strategy here would be trade in the direction of the gap immediately following their formation.

However, this analysis didn’t take into account the magnitude of each gap. But even taking that into account, while it produces improved risk-adjusted returns slightly, it is still not worth trading.

On comparing the data from crypto derivatives data BitMEX to that of CME, the report found, “Average gap size actually decreased slightly since the CME launched its futures products.” This difference is “more significant” when accounting for volatility, 25% smaller in relative terms after the CME opened.

As for whether the impact CME future gaps have had on XTPUSD price action is significant, the research states that’s a no.

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Author: AnTy

Daniel Larimer, EOS Blockchain Creator, Speaks About How To Figout Out the CPU Issues

Daniel Larimer, the CTO of Block.one, has recently talked about how to solve the CPU issues that plague the EOS blockchain. He decided to do it now because of a massive CPU collapse that happened on the network two weeks ago.

At the time, the EOS network was heavily congested because of an airdrop and most users faced issues with transactions. After the trouble, the governance had no choice but to explain what actually happened. Larimer affirmed that the CPU market for the EOS, known as Resource Exchange (REX), faced some issues because of how it works.

These issues happened because REX basically ran out of tokens to distribute to people. This congested all transactions and caused the network to basically collapse for the time. This happens in situations in which the distribution of CPU rental is not very well balanced and there is a mismatch in demand. This combination of problems can easily result in volatility and in lacking EOS to rent in the marketplace.

Fortunately, Larimer proposed a way out of this situation. He claims that the way to do it is to make all CPU time leased from the system and then make the EOS leasing price grow exponentially as the percentage of CPU leased grows. This would balance the system, as prices would be more dynamic than they are at the moment.

This new approach would eliminate the current dynamic supply method and it would not incentivize people to withdraw EOS from the REX if they did not really need it, so hopefully, it would prevent this from ever happening again.

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Author: Gabriel Machado

Ex-China Central Bank Governor Talks About Upcoming Digital Yuan and Its Benefits

The current president of the Chinese Finance Association, Zhou Xiaochuan, has recently talked about the upcoming digital yuan. According to the economist, who has worked as the former head of the People’s Bank of China, the country’s central bank, China will continue on its path to create a digital yuan to be used for both retail and international transactions.

He has recently discussed the influence that global banks can have in creating digital currencies and believes that the most economically powerful nations should be cautious when approaching this new technology. Taking a pragmatic approach when deciding what to do with its sovereign currencies is a good idea, in his opinion, because they are very important.

Xiaochuan defends the idea that any bad decision can be really catastrophic to a country and it could lead to people losing all their trust in their national currency, which would start a financial crisis that would destroy the economy. He defends that national fiat currencies are a symbol of national sovereignty and they should be protected, so no rushed decisions can be taken.

According to the economist, implementing this new system has two main goals. One of them is to create a digital payment to support retail payments in the country. The other one is to expand on international settlements using this new digital currency.

Xiaochuan points out that digital currencies should be studies in-depth and that they can bring many opportunities to the industry if they are well regulated.

China will release its new digital yuan “soon” and the world will be a different place after that. We can only wait and see how the financial system will be affected by this change.

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Author: Hank Klinger

Is CFTC Tarbert Becoming Crypto Step-Dad? Saying Derivatives Need More Principles Not Rules

Heath Tarbet, the chairman of the U. S. Commodity Futures Trading Commission (CFTC), has recently talked about the regulation of the crypto market. According to Tarbet, who has recently assumed the position at the CFTC, the goal is not to snuff out innovation in the crypto world, but to help it grow in an organized way.

The best way to regulate this kind of asset is by observing a lot before jumping to conclusions and adopting targeted rules for the industry. Tarbert emphasized that regulation based on “principles” does not mean that the measures taken will be too light, only that more detailed rules should give space to more flexible ones.

One of the main points that Tarbert talked about was that if you create too many regulations, people will simply lose respect for the law and stop following it. According to the chairman of the CFTC, regulators need to understand this risk and to avoid taking a heavy hand when regulating this nascent industry.

Given how quick the blockchain market is changing, a principles-based approach should be more effective as a way to properly regulate it without damaging innovation too much, Tarbert believes. The previous chairman, Christopher Giancarlo, was also pro-crypto and believed that the industry should have a “do no harm” approach.

The chairman explained, however, that anyone who presents fraudulent behavior or poses risks for financial stability and other people will not be exempt from regulation.

Right now, the CFTC is considering how to take this approach moving forward, especially concerning crypto exchanges and similar businesses.

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Author: Gabriel Machado

AFME Calls For Regulator And Crypto Initiative Collaboration For EU To Become Global Leader

The Association for Financial Markets in Europe (AFME) has recently talked about crypto regulation in Europe. According to the institution, the European Union (EU) has the potential to become one of the leaders of the crypto market. However, this will only happen if the region is successful in regulating the sector effectively.

AFME has also given five recommendations for European leaders so they could achieve this goal. The main one is that they should establish a classification scheme for assets that can help in the introduction of crypto to the financial world.

This echoes the argument of Bankenverband, a banking association from Germany, which affirmed that it is the lack of clarity of how cryptos will be regulated that makes them undesirable for the market.

AFME’s managing director and head of technology, James Kemp, stated,

“There has been a rapid rise in the development of crypto-assets […] however, to realise those benefits, it is increasingly important that crypto-asset regulation is coordinated at the regional and global level to foster innovation, while promoting financial stability and ensuring a level playing field.”

James Kemp, the managing director of the AFME, claimed that the crypto assets have been on the rise lately, so it is important to understand their benefits and to coordinate innovation at the local level, promoting stability and ensuring that Europe has a leading position in the industry globally.

He also affirmed that the union should have clear expectations about crypto assets and that regulatory frameworks for the industry should be a top priority.

It is expected that the EU will come up with new legislation regarding cryptos in 2020, including money laundering rules and possibly take some steps forward in clarifying the regulation of these digital tokens. The main doubt is whether the EU will do it quick enough not to lose its place to Asia, which has been proving to be very strong in the market so far.

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Author: Gabriel Machado

Calibra Association’s Kevin Weil: Libra Won’t Spread As Fast As Facebook’s Social Media Network

Kevin Weil, the vice president of products at Facebook’s subsidiary Calibra, has recently talked about the expansion of the main project of the company. According to him, the Libra stablecoin may take years, if not decades, to “catch on”.

He talked about it at the Web Summit, which happened this week in Lisbon, Portugal. Weil said that this is a work that is “worth making”, but it will be very hard and slow to build a real user base for the new digital asset.

Weil also claimed that the Libra Association is still determined to be a successful organization, despite losing some important members recently. He was talking about companies such as PayPal, Visa, and Mastercard, which decided to leave the association during the government crackdown that happened with Libra a few weeks ago.

However, he believes that the members which are still a part of the foundation are very focused on its success. Weil also pointed out that now the Libra Association is more than what it was 18 months ago because of their involvement.

During his presentation, he also affirmed that people won’t be forced to use Calibra’s wallet. Each user will have the freedom to use whatever wallet they like and the CEO of Facebook, Mark Zuckerberg, promised that the social media company will not interfere directly with the digital currency.

Curiously, private Libra wallets are already available. ZenGo, a developer from Israel, for instance, has just launched a wallet compatible with the Libra network a few weeks ago. If this catches on, we’ll probably have a lot of Libra wallets, something that may end up appeasing regulators a bit, as it will take some of the power away from Facebook and the association.

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Author: Gabriel Machado

Winklevoss: Bitcoin Is More Than Digital Gold, BTC is a Source of Truth with Boundless Possibilities

Cameron Winklevoss, one of the famous Winklevoss’ twins, has recently talked about the potential of Bitcoin. According to him, BTC is far more than just digital gold. It is open-source software with almost limitless possibilities, in his opinion.

To him, being digital gold is just the beginning. The argument is that there is a lot more to go forward than just a simple analogy with gold because BTC is also scarce. Most people make this comparison at first, but there is a lot more than that.

With immutable decentralized transactions, anonymity, and security, Bitcoin was said to be “a shared single source of truth”. This is a term is used in the information systems area and it means something that can give a complete picture of the data. The technology that underlies BTC is the foundation of something huge and important, if we are to believe Cameron.

Another important aspect is that its integrity and scarcity are also important to protect Bitcoin from issues that gold faces today, such as forgery. This year, there were several reports of people scammed by forgeries of gold, around 1,000 kilograms of fake gold bars were found even with major banks such as JPMorgan Chase.

Bitcoin would never have the problem, as there is simply no way to forge it. This kind of security will be important in the coming days and it is one of the main reasons why people believe that Bitcoin is one of the biggest inventions in recent history.

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Author: Gabriel Machado

Binance CEO: Exchange Will Use Third-Parties To Provide Fiat To Crypto Trading

Changpeng Zhao, the CEO of Binance, has recently talked more about how the direct fiat to crypto trading on the platform will work. The original announcement stating that the platform would finally start accepting these trades was made this week, so the investors were eagerly waiting for more information on how that would actually be done.

According to him, third-party companies will provide the services, but the name of these companies was not disclosed to the media at the time of the announcement.

He also affirmed that the Russian rubbles will be the first fiat currency to be traded on the platform. Curiously, he used the opportunity to joke that Vladimir Putin, the President of Russia, was currently the most influential person to the blockchain space.

Zhao used the occasion to affirm that the company does not pass information to the authorities on normal occasions, but that this does not mean that criminals could be at easy using a Binance account, as the company would certainly help the authorities if there was any suspicion of criminal activities of any kind.

Another big update that was announced at the same time was that Binance will start issuing debit cards that will be tied to the accounts of the users. This way, they will be able to spend the crypto that they are trading if they wish to. At the moment, two companies were announced to provide these services, Koinal and Simplex.

Zhao finished the announcement by affirming that he considers his company to be the next Facebook or Amazon and saying that he was pretty hyped about the future.

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Author: Gabriel Machado

Litecoin Creator Charlie Lee Explains Why LTC Is Always Profitable for Exchanges

The creator of the Litecoin network, Charlie Lee, recently talked about his creation. He was interviewed by podcaster Dan Gambardelo, known as the founder of Crypto Capital Venture, and talked about the benefits of the cryptocurrency.

Gamberdelo asked his Twitter followers to come up with unique and original questions for him, so they did. One person asked a pretty interesting question: why Litecoin does not need to pay to be listed on any platform while most altcoins do?

Lee’s answer was, that it makes business sense, basically. Exchanges see Litecoin as a highly traded asset that can bring in a lot of revenue because people actually use it. The same cannot be said for many cryptocurrencies in the market.

The community also came up with several other questions. For instance, someone asked Lee if Binance charged him for listing the asset. He affirmed that they did not. When asked if he still mined LTC,  Lee confirmed that he had stopped to mine tokens himself around 2016 or 2017.

Someone also asked him if he ever talked to Satoshi. Charlie Lee affirmed that he did not have the chance to do it because Satoshi was already gone when he entered the crypto space.

Unfortunately, though, the situation is not looking good for Litecoin, despite what Charlie Lee states. The token is entering a bearish trend after losing some of its value recently and several LTC investors are already bracing for a long Winter ahead at this point. After the BTC sell-off, LTC went down together and it is now the 6th largest token by market cap.

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Author: Hank Klinger

SWIFT Rep Calls Crypto Useless Because Of Volatility But Facebook-led Libra Could Disrupt Payments

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has recently talked about cryptocurrencies. According to the organization, cryptocurrencies are useless because they are too unstable.

SWIFT representatives claimed that the value of Bitcoin and other cryptos goes down like a yoyo, which makes it untrustworthy. They believe that even if some crypto companies can make a more stable investment, it is because they offer a basket of currencies.

The members of the group also affirmed that they do not feel threatened by cryptos, but they are fairly aware of their issues. For instance, they recognize that SWIFT payments can take a lot of time.

However, despite being aware of all these issues with efficiency, the group does not feel threatened by SWIFT. Even solutions such as Ripple’s xRapid, which basically can do the same that SWIFT does now, is not recognized as a threat, at least publicly.

Curiously, the main rival that was actually recognized by SWIFT is Libra, the new stablecoin created by Facebook. The new crypto-like currency will be used on WhatsApp, Facebook Messenger and Instagram and it will reach the 2.7 billion user base of Facebook if the project is approved in the whole world.

Despite these concerns, however, SWIFT believes that the impact of the new Libra initiative can be limited. Facebook is facing a lot of scrutiny around its plans and the regulators do not seem very eager to approve its new token, so this might mean that the market may not be so affected if some countries decide not to accept the new token.

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Author: Gabriel Machado