Derivative Market heats up by Jacob Pouncey | Saxo Bank Analyst | Crypto Current Contributor
This week the entire crypto market cap rose by 25%, bringing the market cap to USD 360 bn. Etheruem and Bitcoin rose by 22% and 37% respectively. This marks a meteoric rise in Bitcoin price since the start of the quarter, moving from USD 4k to over USD 12k on the last week of the quarter. The move as pushed Bitcoin to over 60% of the entire cryptocurrency market cap, further dashing the hope that alt coins may recover to their previous all-time highs against BTC.
Hedge Funds are still net short The recent commitment of traders report put out by the Commodities Futures Trading Commission (CFTC) highlights the fact that a majority of the market is exposed to the short side of Bitcoin prices despite the recent rise. This is mostly due to the fact that this is one of the most regulated and secure ways to short Bitcoin. Despite the open interest being net short, it does not mean leveraged funds believe the price crash. Instead, the funds could be using the shorts as a tool to hedge a much larger long position.
LedgerX approved by CFTC The CFTC approved LedgerX’s application to offer physically-settled Bitcoin futures to the retail market. It makes it one of the first exchanges in the US allowed to offer physically settled futures on Bitcoin. Its closest competition is the ICE’s Bakkt exchange, which is waiting on approval as a clearinghouse from the New York Department of Financial Services. Regardless, these services will open of regulated channels to both short and long Bitcoin, thereby helping price discovery.
AMUN launching basket AMUN which already has four derivative products trading on the Swiss stock exchange SIX will launch a fifth exchange-traded product. This product will track the Bitwise Select 10 Large-Cap Crypto Index which consists of the top 10 cryptocurrencies in a market cap weighted portfolio. The product gives investors access to the majority of the cryptocurrency market. Products like these will become increasingly common on regulated exchanges.
Bitmain IPO on horizon again Bitmain is back at it again, trying to IPO. The world’s leading producer of Bitcoin mining hardware was set to IPO on the Hong Kong stock exchange but let its application expire. However, it is rumored that the firm is looking to IPO on a US-based exchange. Last time the firm was looking to IPO was in the depth of the bear market, now their much anticipated IPO could have a more favorable outlook. The IPO will also bring to light the books and practices of the secretive firm.
