Cryptocurrency derivatives exchange FTX will now allow its users to trade not just crypto but tokenized shares of big giants and some of the world’s most popular companies like Amazon, Apple, Netflix, Facebook, and Tesla.
These tokenized equity offerings are backed by the shares of actual stocks, custodied by CM-Equity, and can be redeemed for the underlying shares.
For now, trading is available on more than 12 equity and cryptocurrency pairs like BTC and stablecoins.
“CFDs aren’t illegal – and offering them for US-traded companies on the NYSE and NASDAQ is allowed – you just need to follow the regulations and not try and skirt the rules just because you are on a blockchain,” said Adam Cochran, a partner at Cinneamhain Ventures.
In response to this news, the price of FTT jumped to $3.91. But it is to be expected, as FTX CEO Sam Bankman Fried said, “Everything on FTX involves FTT.”
Contour, a blockchain-based trade finance platform, has gone live after a successful beta testing phase. The trade finance platform aims to optimize the traditional financial system by digitizing them and putting them on a blockchain. The trade finance platform is backed by 8 major banks, including HSBC, Citi, ING, Bangkok Bank, BNP Paribas, CTBC, Standard Chartered, and SEB.
The platform was launched back in 2017 as Voltron built on top of the R3s Corda Platform. The platform promise to ease up the slow bureaucratic process for several institutions and companies via a global blockchain network. HSBC tweeted about the official launch of the platform and said,
“We’re excited to announce the world’s first global, decentralized, digital trade finance platform using #Blockchain technology has gone live this week to coincide with #Sibos2020:”
However, it is also important to note that the network is a private blockchain that would be exclusively available for partner companies for data sharing. Thus, even though HSBC’s tweet calls the platform a decentralized network, it is not centralized in the traditional sense.
How Would Contour Optimize Traditional Trade Finance?
After its launch, the first goal for Contour would be to optimize the letter of credit (LC) process among parties, which, on average, takes 10 days to process currently. With Contour’s blockchain system, the time consumed for processing would be reduced by 1/10th, taking around 24 hours.
Contour would develop a rulebook and membership agreement system, which would allow for the reduction of processing time by 90%.
Carl Wegner, the CEO of the platform, explained how the rulebook would help in optimizing the process and said,
“The rulebook is really important. Rather than having to string together four or five different legal agreements between the buyer, seller, buyer’s banks, and seller’s banks, which was very onerous, we now have a rulebook which makes it very easy for everybody to sign up and know what their roles and responsibilities are.”
With the official launch of the platform, all the existing members would migrate to the main net. However, it is unclear how many other members are on the platform apart from the official partners.
The Securities and Exchange Commission (SEC) of Nigeria will start regulating trade in digital currencies to ensure investor protection and that transactions are transparent. The authorities said on Monday,
“The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices.”
The agency said it’ is required to regulate “when the character of the investments qualifies as securities transactions.”
In the past, the West African nation declined to recognize digital currencies as legal tender. In 2018, the Central Bank of Nigeria said that cryptocurrencies, including Bitcoin (BTC), Litecoin (LTC), XRP, Monero (XMR), and Onecoin, weren’t considered money.
The Abuja-based regulator said in a statement that it views digital currencies as exchangeable securities and that the issuers or sponsors of these virtual assets “shall be guided by the commission’s regulation.”
The country is now coming to acknowledge the growing presence of digital assets, and Ayodeji Ebo, managing director at Afrinvest securities in Lagos, said, “the earlier it is regulated, the less havoc on the economy.”
“It’s another way to provide alternative assets to investors,” he told Bloomberg.
Gemini crypto exchange has announced that New York users will now be able to trade Compound (COMP), Amp (AMPL), and Pax Gold (PAXG) against the USD. The Winklevoss brothers’ led crypto exchange noted that it worked in collaboration with the New York Department of Financial Services (NYDFS) to receive approval for listing these digital assets. According to the official announcement, active trading of the newly added pairs is scheduled for September 15.
This move is quite significant for the New York market, which had been left out of the DeFi space when it comes to listings on centralized crypto exchanges. Coinbase, for instance, has been quite active in listing ‘hot’ DeFi tokens, but yet to cover prospective users in New York. With COMP’s listing on Gemini, crypto investors and enthusiasts in the big apple will now be able to acquire positions in DeFi through the exchange.
COMP made waves in May when the decentralized protocol debuted this governance token to be used in running the platform. The protocol has since risen to become one of the leading DeFi lending and borrowing platforms; currently, its market cap stands 544 million while the price of one COMP token is $163 as per Coingecko metrics. Tyler Winklevoss, Gemini’s Co-founder, tweeted bullish sentiments as well,
“The #DeFi revolution is upon us. @Gemini is now accepting deposits for $AMP @amptoken, $PAXG @PaxosStandard, and $COMP @compoundfinance. Trading to begin on 9/15!”
Amp and PAXG, on the other hand, propose value in digital collateralization and gold tokenization, respectively. The former will expose Gemini’s clients to Flexa’s Network collateral token ‘AMP’ whose underlying is to act as a form of collateral, supporting the fundamentals of Flexa’s payments network. This innovation allows users to pay merchants’ in crypto while Flexa handles ‘under the hood’ to convert these payments to the merchants’ preferred fiat currency.
Gemini’s venture into the DeFi space has scaled its range of tradeable digital assets to 12; notable mentions that were already featured include BTC, LTC, ETH, and BCH. The exchange highlighted that its updated trading portfolio would be available via API connections and the platform’s Active Trader.
Binance U.K has joined CryptoUK, a self-regulatory trade association, as it prepares to launch its trading services in the United Kingdom. The exchange’s U.K subsidiary broke this news on Twitter, noting that they are joining the association as an executive member.
This milestone will see Binance U.K operate alongside the likes of Coinbase, Ripple, CryptoCompare, eToro, and CoinShares, who are also part of the CryptoUK executive committee.
Started back in 2018, the CryptoUK initiative came about as an avenue to accelerate crypto growth in the U.K through self-regulation. Some of the issues that the association advocates for include the development of best practices in crypto as well as sustainable growth. On this front, CryptoUK operates in liaison with stakeholders, not limited to financial regulators.
Currently, they are focused on giving feedback to Her Majesty’s Treasury, which recently inquired the public about crypto asset promotions. In addition, the association is set to play a contributing role in the U.K Cryptoasset Task Force stablecoin consultation, which is slated for late 2020. Ian Taylor, the chairman of CryptoUK, has since welcomed Binance U.K to advance the association’s course,
“Binance.UK will bring significant local and global expertise to our Executive Committee and initiatives. We look forward to working with them to help develop a supportive regulatory framework for cryptoasset businesses and customers in the U.K.”
This latest move by Binance U.K solidifies an entry position into the British market following the acquisition of EddieUK, which now operates as Binance Markets Limited. Notably, the firm was already regulated by U.K’s Financial Conduct Authority (FCA) hence a smooth transition that would have been otherwise cumbersome, given regulatory hurdles. Binance U.K head, Teana Baker-Taylor, acknowledged the additional value in joining a self-regulatory body,
“Self-regulating bodies play a key role in developing […] best practices, as well as building consumer confidence. Associations like CryptoUK help to facilitate meaningful discussion and education with policy makers, which enables the development of more informed policies that are more effective in supporting both the industry and consumers.”
“Long or short the DeFi market, all in one contract,” it further states as the exchange announces the DeFi Composite Perpetual Contract with a leverage of up to 50x. The futures will start trading from August 28th, 7:00 AM (UTC).
That’s right, Binance is offering you 50x leverage to trade the explosive DeFi tokens which have been already surging like crazy.
Binance isn’t the first one to offer a DeFi index trading, except for the 50x leverage, of course. FTX first announced the launch of a DeFi Index perpetual contract, and just this week also introduced Uniswap index futures that cover the top 100 Uniswap pools. FTX also launched a decentralized derivatives platform, Serum.
This week, the exchange also acquired Blockfolio in a $150 million deal to attract retail traders. While the community celebrated the acquisition, “FTX didn’t pay for a portfolio tracker they could build in 5 minutes, they paid $150M for your data and bag info.”
Thoughts on the FTX -> Blockfolio acquisition
They’ll use it to see what you own, datamine you, and trade against you
They paid for a big name mobile brand not a portfolio tracker
They aren’t leaving it as it, I assume trading is coming to Blockfolio in one manner or another
Binance’s DeFi index covers 10 DeFi projects that are currently popular in the market. This list comprises some of the hottest tokens that almost completely feed the DeFi appetite of a trader.
With names like Band Protocol (BAND), Compound (COMP), Kava.io (KAVA), Kyber Network (KNC), Aave (LEND), Chainlink (LINK), Maker (MKR), Synthetic Network Token (SNX), and 0x (ZRX), the index is attractive.
However, amidst this is Swipe (SXP), which has more weightage in this index than any other token except for Chainlink, Aave, and 0x.
The community didn’t appreciate that while this list lacks the DeFi darling YFI, it also covers Swipe, arguing it isn’t even a DeFi project. Swipe might not be a DeFi yet, but it is on its way to join the craze as it announced earlier this month that Swipe would be launching a decentralized finance lending/earn application on Binance Smart Chain.
Binance acquired Swipe last month; the latter one also added BNB making it spendable with fiat at over 50 million locations worldwide via the Swipe Visa Debit Card.
Binance has constantly been listing new DeFi tokens to capture this hot trend and now advertising its Binance Smart Chain with EVM compatibility, rich & growing ecosystem of assets, cheap transaction fees, high performance, funding, and cross-chain DeFi mechanisms to be the perfect blockchain to launch DeFi projects.
South Korean exchange, Coinbit, was accused of wash trading 99% of its trade volumes by authorities.
Coinbit netted over 100 billion Korean won (KRW) through wash trading.
There are large discrepancies in the exchange’s accounts.
One of Korea’s largest cryptocurrency exchange is under investigation after the Seoul Metropolitan Police found evidence of wash trading of over 99% of its volumes. According to local reports from Seoul Shinmun, the police have seized Coinbit exchange headquarters in Gangnam district and some property around the country as investigations continue. Trading has since been suspended.
Wash trading is a tactic used by cryptocurrency exchanges using ‘ghost’ accounts to inflate the volumes recorded on the exchange. According to the report over the past few months, the exchange has made over 100 billion KRW ($84 million) from wash trading its volumes.
Coinbit is the large largest cryptocurrency in Korea, with over 275,000 daily active users on the platform. The Seoul Metropolitan Police is charging the top management of the exchange, including the owner, Choi Mo, for fraud affecting every one of the traders on the exchange.
The investigations found out that 99% of the total trades on major crypto pairs such as Bitcoin (BTC), Tether (USDt), and Ethereum (ETH) were wash traded. Most of these trades arose from ghost accounts as no corresponding deposits and withdrawals were shown on the exchange’s books.
The management is also accused of tampering with the market holding the small-cap cryptocurrencies. The report states that the top directors realized market margins through whale buy and sell transactions of certain coins to move the market – much like a pump and dump scheme.
The cryptocurrency field has seen cases of wash trading plummet over 40% in the first half of the year, but enough is yet to be done to curb this harmful practice. In July, BEG reported Canadian exchange, Coinsquare was accused of wash trading its volumes by the Ontario Securities Commission (OSC).
Bitcoin is back at near $12,000 level as we trade around $11,700.
The largest cryptocurrency took a drop under $11,300 yesterday only to make its way back to $11,850, which has been attributed to Dave Portnoy of Barstool Sports, educating his 1.7 million Twitter followers about Bitcoin in which he is already in seven figures deep.
Trader DonAlt, however, is not “positioned for huge upside,” and emphasizes on “sub $11k for any significant bearishness.” He said,
“Support held & made the price bounce back to the last resistance again. Going to watch how this Portnoy action into that resistance plays out, bulls are looking for a close above in the next few days.”
For Bitcoin, maximum pain appears to be around $11,500 as the digital asset continues to hover around this level ever since BTC broke above $11,000 in the last week of July.
The good thing for bitcoin meanwhile is the BTC balance on cryptocurrency exchanges, which continues to slide down. Ever since the March sell-off, the price of the crypto asset has been going up while exchanges’ BTC balance has been “declining extensively,” a trend last seen in 2016.
This means while investors are holding instead of taking profits, they are ready to buy any dips with the rapidly rising stablecoin supply.
“Historically, this happened twice & it’s an indication that we’re still in the early phase of a bull market,” said trader Crypto squeeze. “The big players aren’t ready to unload at this price.”
Dollar’s Loss is Bitcoin’s Gain
While bitcoin has been uptrending, all this time, the US dollar has been declining. It was in March during the market-wide correction that the USD gained strength — DXY went from 95 to 102, last seen in late 2016.
However, since then, the significant trend has been towards the south. Just recently, the US dollar index hit over a two-year low. Currently, it is slightly better at around 93 amidst the impasse in Congress about the additional stimulus to cope with the coronavirus pandemic.
“The dollar being weaker is a sign of positive risk sentiment,” said Klarity’s Sahota. “The market is moving to places that would give them a better return.”
The better-than-expected US jobless claims data, claims for state unemployment benefits were 963,000 for the week ended August 8, isn’t helping the dollar either. But the dollar’s loss is undoubtedly bitcoin’s gain.
Not only the losing faith in fiat currency aids in the adoption of the digital asset, which is in limited supply and is censorship-resistant, but it also means BTC price moves up. Trader and economist Alex Kruger said,
“The dollar is green like a leaf. Leaves grow old, fall, and die. Bitcoin is weightless and immortal. Dollar falls, Bitcoin remains. That is why BTC/USD goes up. Simple logic.”
Despite soaring 50% at the end of July, the price of XRP continues to trade under $0.30 and down 93% from its all-time high.
This has been despite Ripple unveiling that it is buying XRP in the secondary market at market prices and may further continue to do so in the future, trying to quell the accusations of dumping the digital asset on investors.
Ripple currently sits on about 55% of XRP’s total supply worth about $16 billion after having to cash $1.2 billion of its holdings since early 2017. It is the third-largest cryptocurrency after Bitcoin and Ethereum by a market cap of nearly $12 billion.
“We are a capitalist, we own a lot of XRP,” said Ripple CEO Brad Garlinghouse. “So do I care about the overall XRP market? 100%.”
The company aims to “deliver a lot of utility through XRP”; however, it could take “years,” he said.
Still Finding Use Cases
According to a report by FT, the San Francisco-based fintech start-up launched in 2012 is still trying to find use cases for its blockchain technology underpinning XRP. In this attempt, it is aiming to become the Amazon of the crypto world.
When Garlinghouse took the CEO position five years ago, the company focused on payments but is now trying to produce tools for developers to build their own applications on their blockchain.
According to Garlinghouse, this latest effort will put Ripple in the same position as a broader blockchain platform as Amazon has become a platform for e-commerce.
“Amazon started as a bookseller and just sold books. We happen to have started with payments,” he said. “Two years from now, you’re going to find that Ripple is to payments as Amazon was to books.”
But Ripple hasn’t been hit with its first application and has also been facing lawsuits over claims they sold unregistered securities, and bears a big question mark on the (security) nature of its digital asset.
Cutting Back on Handouts
Ripple gained much attention for attaining over 300 banking and financial institutions as its partners include some big names. Santander is one of its “largest and most important customers,” but like many other partners doesn’t use XRP rather only some of Ripple’s software. This is because the digital asset wasn’t active in enough markets to support the bank’s needs.
Not only trying to be close to the bank gets them “a lot of hate in the crypto world,” this whole situation is like “Uber trying to disrupt the taxi industry by working with the taxis,” said Michael Arrington, TechCrunch founder.
This year, it was also found that Ripple has been using its crypto reserves to draw more users and partners. The company handed MoneyGram $31 million worth of XRP in “market development fees” to encourage them to use its cryptocurrency.
Ripple also distributed about $500 million, much of it in XRP, through its Xpring fund to see new applications using its blockchain technology. One such effort involved Coil that received $260 million, which generated little in returns.
Ripple has since cut back on Xpring handouts, and the company has now moved from “writing cheques to writing code,” said Ethan Beard, SVP at Ripple.
This week started around $10,350 and recorded an increase of 13.5% to now trade around $11,500 while keeping the ‘real’ volume stable around $2 billion.
However, there were much more exciting things than the price that happened in the bitcoin market this week.
For starters, JPMorgan strategies revealed that while older investors go for gold, younger ones prefer bitcoin. Also, over the past five months, both gold and bitcoin ETFs saw strong inflows as old and young both see the case for an “alternative” currency.
Institutional Investors are Back
It’s not just the retail investors that all up in bitcoin’s business, institutional investors have also entered the market. After a long time, Bakkt finally made progress and set new records twice in a row that eclipsed the previous ATH.
“The trading activity on Bakkt has exploded after bitcoin crossed $10,000 again. Both open interest and volume saw new all-time highs last week,” noted Norwegian cryptocurrency analysis firm Arcane Research.
In the first half of July, trading volume on the ICE-backed exchange remained around $30 million which has since surged to $80 million in August. Open Interest on Bakkt contracts saw even more explosive growth of 575% from mid-July level.
Similarly, volume on CME has spiked from around $100 million to now over $650 million. OI on CME bitcoin contracts meanwhile is slowly making its way to $1 billion, with 120% jump from last month, as per Skew.
San Francisco-based crypto exchange Coinbase, which has been recording trading volume between $30 to $100 million up until July 27 the day bitcoin broke the key levels of $10,000 and $10,500, has now made its way to $275 million.
Explosive Q2 Reports
Square all but gobbled all the BTC mined in Q2 as it reported a revenue of $875 million from bitcoin, up 600% year over year, accounting for a big chunk of the company’s $1.92 billion in revenue.
What’s interesting is that much of this revenue is the Square burning the BTC for its customers as only a “small margin” is charged from the users on each sale. The company recorded $17 million gross profit, less than 3% of total gross profit, from trading bitcoin last quarter.
Another bullish Q2 report came from Genesis Lending, which saw $2.3 billion loans in the origination, hitting new all-time highs.
“BTC loans increased as a result of the flattened futures curve enticing traders to long basis by borrowing BTC, selling it spot while buying short-dated futures,” noted Jack Purdy of Messari.
With crypto getting more institutionalized, prime brokers like Genesis have a “pivotal” role to play by providing a full suite of products just like in the traditional financial world.
Bitcoin is the Choice
Wolfe Research wrote a technical analysis of the largest digital asset titled “Bitcoin — More than just a bit,” where it talks about bitcoin chart set-up looking “pretty darn good.” Not only is it above upward-sloping moving averages, but it also has “positive momentum readings across all periodicities.”
As per the research, the first reasonable target for BTC is $13,850 from June 2019 and is expected to make a new all-time high in this cycle.
As we reported, $1.2 billion publicly-traded company MicroStrategy also disclosed in its Q2 2020 earnings call that it is diversifying its cash holdings to include bitcoin. This movie has been made in the company’s search for yield, as it expects yields on government bonds to turn negative all over the world thanks to all the money printing by the central banks.
The Fed Tailwind
The biggest driver of all the bullishness in the markets will continue to push them higher as already, another fiscal stimulus is on the way, which would be a trend changer because “nobody is expecting it despite the negative headlines,” said economist and trader Alex Kruger.
Moreover, the US Federal Reserve is also expected to make a harder commitment to ramp up the inflation soon, until it hits at least 2%. Markets are already betting on higher inflation as seen in the falling dollar, surging gold prices, and people looking at bitcoin as an alternative currency.
Recent movements in #bitcoin correlations show that investors are perceiving $BTC as an inflation hedge which is a highly positive development. It is no longer simply performing as a risk asset.