Binance Research: Bakkt to Blame For September’s Bearish Performance

The crypto industry lost significant momentum during September. Binance Research claims that one of the potential reasons for this may have been people ‘selling on the news’ of Bakkt launching.


Bakkt Launch Fell Flat

Most notably, on September 23, 2019, Bakkt Bitcoin futures contracts started trading. However, what was hoped to be a groundbreaking moment for the market turned out to be a massive anticlimax.

One of Bakkt’s promises is to bring institutional investors into the crypto market. For Bakkt CEO Kelly Loeffler, Bakkt launch represents “a milestone for the industry.” She also wrote,

As institutions enter this emerging asset class, they will continue to look to secure infrastructure and the regulatory certainty that it provides. Importantly, these futures contracts now serve as benchmarks established by a trusted price discovery process upon which investors can rely.

On the other hand, JPMorgan strategists argue that “the Bakkt flop is directly linked to the steep cryptocurrency market crash.” Likewise, the Binance Research report suggests that Bakkt is to blame for Bitcoin’s price drop. According to the report,

One possible reason, explaining Bitcoin’s price drop, could be the general indifference towards the much-hyped release of Bakkt, as BTC prices dropped over $1,000 a day or so after trading began… Short-term wise though, Bakkt’s disappointing start seems to have been a contributing factor to the recent price decline.

Nevertheless, the Binance Research team remains optimistic. It believes that better days are coming for the crypto industry. According to the researchers,

“October 2019 promises to be an exciting month with many questions waiting to be answered. Will gas fees on Ethereum keep increasing? Will the Telegram Open Network launch? Where will the Bitcoin dominance head to?”

Binance Continues to BUIDL

Binance Research recently released its September 2019 market overview report, which highlights the flatness that characterized the crypto industry for most of the month. And it points out to the fall of the crypto market that occurred on 24 September.

Indeed, in September, the total valuation never rose above $300 billion. Aat the time of writing, the crypto total market cap remains below $213 billion, as TradingView reports.

Nevertheless, the report underlines, the crypto industry kept pace with the development and creation of new derivatives platforms and other crypto financial products.

The report draws attention to the two derivatives platforms that the cryptocurrency exchange Binance launched during the month under review.

On September 2, Binance announced the acquisition of the Bitcoin futures and Crypto options trading platform, JEX. A few days later on September 13, the exchange launched Binance Futures.

Moreover, in September the CME Group reiterated that it would launch options on Bitcoin futures in early 2020.

How do you think Bakkt and other crypto-based products will help Bitcoin go mainstream? Let us know your comments below!

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Images via Shutterstock

Financial Giant Fidelity Backs Bitcoin Derivatives Yield Fund

Financial Giant Fidelity Backs Bitcoin Derivatives Yield Fund

Financial Giant Fidelity Backs Bitcoin Derivatives Yield Fund

The Los Angeles-based Wave Financial has announced the launch of a bitcoin derivatives-based yield fund and Fidelity will provide custody for the fund’s BTC reserves. Wave Financial’s crypto fund commencement is part of a growing trend toward launching BTC derivatives products. CME Group has also revealed the derivatives marketplace will provide options on its bitcoin futures during the first quarter of 2020.

Also read: Fidelity’s Cryptocurrency Arm Starts Offering Institutional Investor Services

Wave Financial Launches Bitcoin Derivatives Yield Fund

Option strategies are becoming a popular trend within the cryptocurrency industry and just recently Wave Financial started a new bitcoin derivatives-based yield fund. A derivative is basically a contract that derives its value from the price of things like commodities, currencies, stocks, and bonds. Since 2017, BTC market prices have been used for indexes and market sentiment data. With these instruments, financial institutions create swap agreements, forward contracts, options contracts, and futures.

Financial Giant Fidelity Backs Bitcoin Derivatives Yield Fund
Wave Financial revealed the launch of a bitcoin derivatives-based yield fund and Fidelity will hold the fund’s BTC.

Usually, options are established after futures markets become more mature and they allow traders to profit from the ebb and flow tethered to market sentiment. The Wave BTC Income & Growth Digital Fund is an incorporated fund stemming from the British Virgin Islands. The fund plans to let investors generate yield by selling call options on the BTC reserves held in the Fund. According to the firm, Fidelity Digital Assets is providing custody for the fund’s BTC reserves.

“For high net worth investors, appetite for innovative yield product with upside potential is strong,” explained Benjamin Tsai, President of Wave. “This product monetizes higher volatility of BTC to deliver yield, independent of the interest rate environment while keeping some upside exposure.”

Wave says the yield fund plans to distribute a dividend of 1.5% of net asset value (NAV) per month. From there the fund is aiming for an 18% target annual yield and any excess will be used to purchase more BTC. The excess, minus a performance fee, will help the overall NAV grow further, explains Wave. “The fund would generate this premium by selling call options with strikes higher than the current price, which also leaves room for investors to capture potential BTC upside,” the company added.

Financial Giant Fidelity Backs Bitcoin Derivatives Yield Fund
Wave’s select 20 cryptocurrency index.

CME Group and Binance Join the Derivatives and Options Party

The news follows the recent CME Group announcement that the options marketplace will offer options on bitcoin futures in early 2020. CME said it plans to add options strategies because of the “growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure.” Tracks will be regulated and settles will be actively traded in CME bitcoin futures. The company emphasized that the new products will offer BTC traders potential to save on margins through margin offsets and the products can “expand choices for managing risk and building strategies.” Moreover, at around the same time in Q1 2020, market participants may see BCH-based futures on a CFTC-regulated exchange.

Financial Giant Fidelity Backs Bitcoin Derivatives Yield Fund
CME Group says bitcoin options are coming in Q1 2020. At roughly the same time, bitcoin cash (BCH) futures will be launched on a CFTC-regulated exchange.

In addition to Waves and CME, the cryptocurrency exchange Binance plans to get into the crypto derivatives and options movement. During the first week of September, the firm revealed it acquired the trading platform JEX. The acquisition will allow the Malta-based exchange to participate in futures markets, options strategies, and a variety of token-based derivative products. Binance aims to manage the JEX token as well in order to boost the derivatives market’s foundation. The Wave BTC Income & Growth Digital Fund also plans to issue a fund-based token in order to trade on “alternative trading systems at a later date.”

“The mission of Wave is to provide investors with diversified exposure to crypto assets,” said David Siemer, CEO of Wave during the launch announcement. “This is an alternative way to hold BTC exposure.”

What do you think about the Wave bitcoin derivatives-based yield fund? What do you think about CME Group offering BTC options based on its future products? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Image credits: Shutterstock, CME Group, Wave Financial, and Wave’s 20 Index.


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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

John McAfee and Peter Brandt Predict Bitcoin Rally to $50,000 Despite Recent Losses

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John McAfee and Peter Brandt Predict Bitcoin Rally to $50,000 Despite Recent Losses

mcafee-and-brandt-predict-bitcoin-rally-to-50k-despite-recent-losses

IT security software provider and outspoken bitcoin enthusiast John McAfee said on Monday he still believed in a strong, medium-term rally for the top cryptocurrency, despite some severe recent losses.

Commenting on Twitter in response to a Tweet from commodity trader Peter Brandt, McAfee told investors to ignore the losses that have taken the price of bitcoin down from $10,000 to $8,000 in little more than a week. He said:

Stop wringing your hands! Watch GOT [Game of Thrones] reruns, or woo your spouse or finish off your drug stash. All is well.

Bull Move Predicted

McAfee – echoing the sentiment of Factor Trading founder Peter Brandt – said he was “firmly” with Brandt in his medium-term price prediction of $50,000 for bitcoin. McAfee added that he remained resolute in his belief bitcoin will reach a price target of $1 million by the end of 2020.

On Sunday, Brandt Tweeted that he believed the top cryptocurrency by market capitalisation would bottom at $5,500 by February 2020 before beginning a bull move to $50,000. At the start of September, Brandt said he believed bitcoin had entered a fourth parabolic phase – a rare chart pattern that tends to signal strong buying, making higher highs, but also lower lows.

 

Featured image by Gage Skidmore, Flickr, CC by 2.0

US Department of Homeland Security Awards $143K Grant to Blockchain Firm

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EOS Maker Block.One Settles With SEC Over Unregistered Securities Sale

EOS maker Block.One must pay $24 million in penalties for conducting an unregistered securities sale, the U.S. Securities and Exchange Commission (SEC) announced Monday evening.

The SEC said in a press release that Block.One “raised the equivalent of several billion dollars” over a one-year period in an unregistered initial coin offering (ICO). (A total of $4.1 billion was raised.) Block.One agreed to settle the charges, according to the SEC.

The fine amounts to 0.0058 percent of the initial raise.

Notably, the press release highlighted that Block.One’s token sale began shortly before the SEC released its DAO Report but “continued for nearly a year after the report’s publication.” The company did not secure an exemption from securities registration requirements and did not otherwise register the sale, the SEC said.

In a statement, SEC Division of Enforcement co-director Steven Peikin said the company “did not provide” investors with any of the information typically included in securities sales. He added:

“The SEC remains committed to bringing enforcement cases when investors are deprived of material information they need to make informed investment decisions.”

In June, Block.One announced the creation of a decentralized social network called Voice. Subsequent details on the launch of Voice, which also runs on the EOS network, have been sparse. As CoinDesk previously reported, the EOS blockchain has faced governance challenges in recent months.

Just last week, the commonwealth of Virginia gave Block.One a $600,000 grant to help build out its headquarters in Arlington, a suburb of Washington, D.C. The company has existing operations in Blacksburg, Va., as well as a major hub in Hong Kong.

According to the SEC press release, Block.One did not admit to or deny the regulator’s findings in deciding to settle.

CoinDesk has reached out to Block.One for comment and will update this article if necessary.

Brady Dale contributed reporting.

Brendan Blumer image via Block.One

Ethereum Surges Over 5% as Analysts Eye Movement to $220

Ethereum has extended its upwards momentum after briefly facing a bout of selling pressure yesterday that sent it reeling into the $160 region. Today, however, ETH has surged over 5% and is now nearing the $180 region.

This upwards momentum has come about as the aggregated crypto markets recovered from a sharp drop that occurred overnight, and analysts are now eyeing significantly further upside for ETH in the near-term.

Ethereum Surges Towards $180 as Buyers Flex Their Strength

At the time of writing, Ethereum is trading up nearly 6% at its current price of $178.70, which marks a significant recovery from its recent lows of roughly $165 that were set yesterday concurrently with the downturn incurred by the aggregated crypto markets.

Ethereum’s current upwards momentum is showing few signs of slowing down, and it has been able to outperform Bitcoin over the past 24-hours, which may signal that its near-term price action will remain separate from that of Bitcoin – assuming that BTC continues expressing stability around its current price levels.

The latest ETH surge did not come as a surprise to analysts, as HornHairs, a popular cryptocurrency analyst on Twitter, explained in a tweet from yesterday that he suspects that Ethereum will continue climbing higher in the near-term.

“$ETH #Ethereum: Bullish 1W SFP at a confluent level. If I was a gamblin’ man, I’d bet she goes up from here,” he said while pointing to the chart below that shows that ETH found strong support at its lower support boundary, which could mean that a surge to its upper boundary at $350 is imminent.

Could ETH Target $220 in the Near-Term?

Although Ethereum’s mid-term target may currently sit as high as $350, in the near-term analysts believe that it may soon visit its recent highs around $220, but this move may depend on stability or upwards momentum amongst Bitcoin and other major cryptos.

Moon Overlord, another popular crypto analyst on Twitter, shared his thoughts on Ethereum in a tweet from this past weekend, in which he points to a chart that shows a near-term upside target around $220.

It does appear that the trade idea he points to in his chart has already shown signs of being valid, which may mean that it is only a matter of time before Ethereum climbs back to its multi-week highs and lays the groundwork to target significantly higher highs.

Featured image from Shutterstock.

Crypto Markets Showing Signs of Recovery, Bitcoin Hovers About $8,200

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FairWin Reponds to Accusations of Ethereum Consuming ‘Ponzi Scheme’

FairWin Reponds to Accusations of Ethereum Consuming ‘Ponzi Scheme’

A few days ago, it was revealed that a gambling dApp, FairWin, had created a smart contract with a number of vulnerabilities. FairWin had given themselves the ability to drain a smart contract of all the ETH it contained. This vulnerability was spotted only after the project gained popularity, and had nearly $10 million worth of ETH locked. Fast forward to today, almost 90 percent of the contract’s funds were withdrawn by participants who were informed of the vulnerabilities, September 30, 2019.

Gas Usage Goes Berserk, Nobody Knows Why

Just a week ago, Ethereum miners increased the gas limit for the blockchain to allow gas prices to move down due to decongestion of the blockchain.

It was believed that this congestion on the blockchain was caused by Tether issuance, but in reality, it was FairWin – and they accounted for almost 60 percent of on-chain activity at one point.

To summarize the project, FairWin is a gambling dApp that doubles up as a high yield investment scheme.

You can earn by either investing an amount and making exorbitant dividends, or by referring other people to the platform. Considering the model, it is more than likely the dividends were paid from investments the project received, effectively rendering it a Ponzi scheme.

Security vulnerabilities were not limited to contract creators, but any malicious actor could essentially drain the contract. The poorly written code, misleading documentation, and fishy website are all consistent tick marks for most crypto Ponzi’s.

FairWin Responds, Denies the Existence of Vulnerability

As it stands, it honestly looks like there was no malicious intent, but rather just a team of sub-par developers who don’t fully understand smart contract deployment.

Clément Lesaege, CTO of Kleros, decided to dig a little deeper to uncover where the roots of this debacle were. He attempted to privately inform the team at FairWin, but received no reply to his multiple emails and Telegram messages.

After Lesaege posted his findings to Reddit, FairWin finally made a comment. According to Lesaege, FairWin wrote:

“Thank you for your suggestion. We have already found the vulnerability, but we don’t think it is a vulnerability. The contract is judged and the invitation code generated by the user for the first time will be used as the final invitation code. So the loophole is invalid. In addition, we have real-time monitoring on our side. Once it is entered, it will be invalid. The intruder, we will alert at the first time, and then exclude the intruder.”

The response from FairWin establishes – without a shadow of a doubt (especially within the Reddit community) – that the team has no idea what they are doing and is incapable of basic programming and execution.

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A Royal Bitcoin Request? Scammers Pray on Britain’s Brexit Fears

Bitcoin has been involved in some pretty brazen efforts to scam people out of money. However, the latest might just be the most ludicrous.

A fake letter, apparently from the desk of a member of the Queen of England’s staff, has been reported. In it, her royal highness appeals to the reader to donate Bitcoin to help save the UK economy from ruin in the wake of an unfavourable Brexit.

Bitcoin to Save Britain? Hmm…

According to a post on LinkedIn, letters have been circulating in the UK in which the Queen of England apparently appeals for financial help in the form of Bitcoin donations. Paul Ridden, the CEO of Skillweb, posted a photograph of the letter, jokingly commenting that he always knew that her royal highness would seek his help in dire times.

bitcoin

The letter, headed “Buckingham Palace” and apparently from the Private Secretary of Queen Elizabeth II, asks for donations of hundreds of thousands of pounds and advertises a frankly outrageous interest rate of 30 percent for a period of three months on money the reader can “borrow” to the cause. Oh, and they also have the possibility of becoming a member of the “Royal Warrant Assiciation [sic.]”.

The donation will join the 82 percent of the £19 billion (or billions, as the author preferred) already amassed to pay the European Union. The exact purpose of this money is not disclosed but it will:

“… keep the economy and inflation exactly as it is for a minimum period of 10 years”.

Finally, the letter concludes with a Bitcoin address and QR code. Who knew the 93 year old monarch was so tech-savvy, eh?

Obviously, there are several glaring red flags with this Bitcoin scam. The most undermining of these is the lousy spelling and grammar used throughout. Along with those already quoted, the author of the letter uses the unconventional phrase “the Brexit” rather than the preferred “Brexit”, “rise” instead of “raise”, and a questionable use of “until” when “before” would feel much more natural.

Of the Bitcoin scams we’ve reported on previously at NewsBTC, this really is one of the more ridiculous. It seems most inconceivable that any individual would blindly send £2 million worth of Bitcoin to an address in the hope of receiving 30 percent back for three months, based on a single letter. Even using an immaculately presented letter, free of all the glaring errors of the one actually sent, the effort is so brazen that it screams “scam”.

A lot of people in the United Kingdom are genuinely concerned about the outcome of Brexit and the UK’s departure from the European Union has been delayed on several occasions since a referendum indicated that marginally more of those bothering to vote wanted to leave the union for good in 2016. With another deadline now looming, it’s hardly surprising to see opportunistic criminals attempt to take advantage of the situation. However, we find it hard to imagine this effort at a Bitcoin scam ever being successful.

Needless to say, the BTC wallet address pictured in Paul Ridden’s post remains empty.

 

Related Reading: Ripple Sends $15.3 Million XRP to Trading Address, Is a Dump for the Crypto Incoming?

Featured Images from Shutterstock and Paul Ridden.

Early Arrival of Ethereum’s Istanbul Hard Fork Causes Testnet Split

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If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices.