Crypto Weekly (Oct. 23rd, 2019)
Weekly recap...
- Bakkt futures hit ATH, will launch options contracts on 12/9/19
- Is quantum computing a threat to BTC?
- Several hurdles expected to improve by year end; still risk-off for BTC
Center Story
1. Bakkt futures just needed a little time... options launch coming next
Bakkt futures daily trading volume has taken off. Was media too quick to judge? Wouldn't be first time.
Variations of "Bakkt futures volume has been disappointing" have been a common refrain since Bakkt's launch at the end of September. But, contract volume rocketed to 640 contracts (~$5mm) on Wednesday. Sustained volume growth will be a sign that price discovery mechanisms in crypto are improving.
One of the key benefits from Bakkt's contract design outlined by Bakkt's CEO, Kelly Loefller, is that prices do not rely on spot trade data:
It is widely reported that the vast majority of trading volume – greater than 90% – is impacted by manipulation, wash trades and other fraudulent activity. This means that for the first time, a benchmark futures price for bitcoin is being set without referencing the unregulated spot market.
Bakkt announced it will be launching the first regulation options contract for BTC futures on 12/9/19. Contract features below...
Capital efficien...Reports you may have missed
How the US Could Adopt BTC as a Strategic Reserve Asset, Look for ETH to Bottom Within Next Few Trading Days
POLITICAL PREDICTION MARKETS PROVIDE PARTIAL RATIONALE FOR PAUSE IN RALLY We see the recent pause in the July rally driven by two factors:General Degrossing Across All Asset Markets: The past couple of days have seen degrossing across all asset markets, including the crypto markets. This is less crypto-specific and more of a function of the market rotating out of strategies (like the long MAG 7) that worked in the first...
BTC AS A POSSIBLE STRATEGIC RESERVE Last week, we discussed the rising political tailwinds affecting crypto. Despite events earlier in the year that might have suggested a changed stance from the Democratic Party, the political divide over the issue has grown stronger. The GOP has become the party that is undoubtedly more favorable to the industry. The attempted assassination of former President Trump, juxtaposed against a Democratic Party seemingly in...
Gox Wallet Movements Still Present a Risk, But Macro & Politics Keeps Us Allocated Here (Core Strategy Rebalance)
DISCUSSING THE SUPPLY CONCERNS On balance, macro conditions have moved in our favor thus far in early Q3. We have received soft jobs numbers and softer ISM reports, and cooler inflation figures, which have sent rates and the DXY lower. Unfortunately, the mere reveal of imminent sales from the German BKA and the solidification of the Mt. Gox disbursement timeline were not enough to put a bottom in for bitcoin....
LESSONS FROM OPEC We have witnessed a significant market panic partially related to formerly locked BTC hitting the order books. The major sources of supply include:Mt. Gox – 141,686 BTCUS Government – 8,100 BTCGerman Government – 50,000 BTC At current prices, this would equate to over $12 billion in supply. This threat, combined with an inhospitable macro backdrop (rising DXY, higher rate expectations, hawkish Fed), has brought BTC down to...
