Market Report: 16th August 2018 — Subscribe to our newsletter.
Join us on Telegram.
CRYPTO NOTE
The daily view from our desk
“Yesterday, all my short squeezes seemed so far away, now it looks as though the bears are here to stay. Oh, I believe in yesterday”. Remember the mighty Lennon & McCartney? They forked two sons, check them out here — see the resemblance? It’s called DNA — not Kendrick’s single — but both sons share Daddy’s rock n’ roll genesis blocks. 👾
MEMORIES OF FUTURES PAST
An echo of a distant time where everything was green and submarine
Although it was possible to short bitcoin before December 2017, very few were inclined to use unregulated exchanges to do so. Interestingly enough bitcoin’s price started rising when CME — the Chicago Mercantile Exchange — announced, on November 1st, that it would introduce trading for bitcoin futures on December 18th.
On the day of the news release, bitcoin’s price was trading around £4.95k ($6.3k), which is the same level it’s been hovering over the past few hours. But, in November, bitcoin initiated its famous bull-run, breaking all the ceilings and wrecking everyone who dared to short it. By the end of the month, it broke the mythical £7.8k ($10k) barrier for the first time.
Then, CBOE — the Chicago Board Options Exchange — declared on December 1st that it would also commence trading on bitcoin futures ten days later. All the bulls went bananas and, after its launch, BTC jumped from £11k ($14k) to it’s all-time high — nearly £15.7k ($20k) in a week — creating the perfect short opportunity, in hindsight.
THEY SEE ME TAMIN’, THEY HATIN’
Markets are easier to embrace if one constantly adapts to their changes
The point of this recap is to remember that bitcoin futures were considered the “seminal financial event of this year, the current decade, and possibly our generation”. As price started dropping after the CME launch, more and more traders shifted BTC profits to alts, creating the January bull run that left many perplexed over the health of this space.
Curiously, CME’s Chairman had voiced that their plans were simply to “regulate, make bitcoin not wild, nor wilder” and to “tame it into a regular type instrument of trade with rules”. But it’s clear that the beast has been overly tamed as betting against cryptoassets has gone mainstream. Notice how yesterday’s micro short squeeze quickly flipped into a long squeeze that moved the price back to where it started. It’s a real market now, albeit one not easy for ‘hodlers’.
With bitcoin making a meagre 0.5% move over the past 24 hours, the top 100 alts also behaved in a rather dull way, with an average loss of 1.7%. Ethereum Classic was the star of the day, with a 14.7% increase as a popular American exchange will finally open up ETC trading against USD, EUR, and BTC, this Friday. One thing is clear now, crypto is becoming a real market, albeit one not easy for ‘hodlers’. Alex Krüger, a popular analyst, even notes that the last few days reminded us of why “crypto is a traders’ paradise”.
WHAT TO LOOK OUT FOR
Filter the noise and stay ahead of the pack
▪ There’s a new free website made by @coin_signals that integrates CoinMarketCap’s data with Trading View, so you can chart any altcoins with the tools you’re used to.
▪ Do you know any traditional investor who wants to be exposed to bitcoin but doesn’t want to touch futures and can’t wait for the ETF? A Swedish exchange has a solution.
▪ Despite the hype surrounding eventual Bitcoin ETFs, some developers in the space are against the financial instrument. Check Andreas Antonopoulos’ 8-minute Q&A explaining why.
WHAT TO READ TODAY
An insight a day could give you more profits to play
▪ Vitalik Buterin, Ethereum’s co-founder, stormed a beautiful and stormy 75-tweet long story of the research around Casper, the dApp’s platform protocol upgrade.
▪ Stellar’s XLM, is one of the most talked cryptoassets. Read CrushCrypto’s August deep dive, which analyses its strengths and weaknesses here.
▪ Token-Curated Registries are attracting a lot of attention, though few understand why. Fortunately, Qiao Wang just wrote a great overview of this simple, yet unproven, concept.
FOUNDATIONAL TRIVIA
Because the building blocks of crypto needn’t be irrelevant
CBOE is the home of many innovative financial instruments, including options, futures, equities, ETPs, Forex, and volatility products — including bitcoin. It is the largest options exchange in the U.S. and the largest stock exchange in Europe.