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CBOE to Launch Bitcoin Futures Sunday, Leapfrogging CME Group

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The CBOE Futures Exchange will begin offering bitcoin futures beginning 6:00 p.m. ET Sunday, a clear sign that the race for cryptocurrency dominance is heating up.

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Futures Announced

The announcement to enter the cryptocurrency market this weekend was made on Monday by CBOE chairman and CEO Ed Tilly.

“Given the unprecedented interest in bitcoin, it’s vital we provide clients the trading tools to help them express their views and hedge their exposure,” he said in a release.

The release also indicated that trading in CBOE bitcoin futures would be free through December. The futures contract will trade under the ticker symbol “XBT” and will be cash settled against the price quoted by Gemini Trust, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss.

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CBOE confirmed last month it would venture into the bitcoin space, but hadn’t indicated when the contract would go live. Before Monday, it was assumed that the Chicago-based exchange would launch its bitcoin futures contract would begin early next year.

Prior to the announcement, it was generally assumed that CME Group would be the first to launch its bitcoin futures platform. Earlier this week, the exchange received approval from the U.S. Commodities and Futures Trading Commission (CFTC) to list bitcoin futures.

Last week, Nasdaq also threw its name in the mix for bitcoin futures, according to reports from Bloomberg News. It is widely expected to become the third major U.S. exchange to enter the market. Although Nasdaq does not have the large institutional backing as CME or CBOE, it will offer a more comprehensive pricing model based on 50 data sources provided by VanEck. By comparison, CBOE has just one while CME has four.

Bitcoin Euphoria

Bitcoin has emerged as the biggest story of 2017, with prices soaring tenfold since Jan. 1. Once viewed as an obscure and esoteric digital currency, bitcoin is now considered a leading alternative asset.

BTC/USD surpassed $11,000 last week en route to fresh record highs. Prices continued to push toward record levels on Tuesday, bringing the total market cap closer to $200 billion.

At press time, bitcoin was valued at $11,659.

Bitcoin’s record-setting run has laid the groundwork for a bull market in cryptocurrency. The total market capitalization of the crypto asset class crossed $350 billion over the weekend. That represents a gain of more than 1,800% since the start of the year.

At last check 19 cryptocurrencies were valued at $1 billion or more, with OmiseGO (OMG), QTUM (QTUM) and Lisk (LSK) joining the exclusive club.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Bitcoin Proxy Shares Rise Following Launch of CBOE Futures Contract

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Bitcoin record

Equities with indirect exposure to bitcoin have been on a tear as of late, as the cryptocurrency euphoria spread beyond the digital asset class to include some notable players on Wall Street.

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Buying Spree Hits U.S. Stocks

Shares of Riot Blockchain (RIOT), Overstock.com (OSTK) and MGT Capital Investments (MGTI) surged at the start of the week as investors rejoiced in the official launch of bitcoin futures on the CBOE exchange. Riot Blockchain rose by as much as 33%, while MGT added more than 20%. Meanwhile, Overstock rose by as much as 34% between Friday and Tuesday’s intraday high before reversing some of those gains later in the day.

All three companies offer exposure to the world of cryptocurrency, with Riot investing heavily in blockchain, the technology that underpins bitcoin and other digital currencies.

MGT is a cyber security company headed by bitcoin bull John McAfee. The cyber sec pioneer is confident bitcoin will reach $1 million by 2020. McAfee’s latest bullish bet came just a few weeks ago via Twitter:

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“When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bircoin at $1 million by the end of 2020. I will still eat my dick if wrong.”

Others have speculated that McAfee was referred to the combined value of bitcoin and all its forks, given his growing support for the alternative bitcoin cash system.

Meanwhile, Overstock has made strong inroads in the blockchain community by creating tZero, the forthcoming Alternative Trading System (ATS) that is expected to raise between $200 million and $500 million via initial coin offering. Overstock’s current business model is no slouch, either, with its billion-dollar-plus annual revenue.

Stocks with exposure to bitcoin provide investors with a more reliable means capitalize on the blockchain revolution. The bitcoin market is largely unregulated, which makes certain segments of Wall Street nervous. The arrival of bitcoin futures, and perhaps ETFs in the near future, is expected to quell those fears.

Some analysts speculated that investors would lose interest in bitcoin proxy stocks once futures became available. So far, the complete opposite has occurred.

The combined value of all cryptocurrencies in circulation approached half a trillion dollars on Tuesday, as bitcoin’s rally extended to leading altcoins such as Ethereum and Litecoin. Both digital currencies reached all-time highs in the latest sign the crypto buying frenzy was jus getting started. Ethereum and Litecoin are the world’s second and fourth largest cryptocurrencies by market cap.

Bitcoin accounts for more than half the total market cap and roughly 50% of daily trade volumes. It was last seen hovering well north of $17,000, which is considerably below last week’s peak of around $19,500.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Companies are Lining Up to Launch Bitcoin ETF, According to SEC

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Two companies have stepped forward with applications to the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin exchange-traded fund (ETF), according to a recent report from CCN. The renewed push toward ETFs comes as more institutional investors look to enter the burgeoning cryptocurrency market.

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Bitcoin ETF

According to the SEC’s public filing system, regulators received new applications for the REX Bitcoin Strategy ETF and Rex Short Bitcoin Strategy ETF, as well as the VanEck Vectors Bitcoin Strategy ETF.

REX, which is based in Connecticut, filed its application on Dec. 8. The New York-based VanEck filed its application on Dec. 11 in a sign that more market players were looking to capitalize on a booming market.

VanEck had previously filed to create a bitcoin ETF before the SEC struck down a similar proposal. That being said, VanEck will reportedly provide the pricing data for an upcoming bitcoin futures contract to be made available via the Nasdaq exchange. Unlike the CBOE and CME futures contract, the Nasdaq version will pull pricing information from 50 sources provided by VanEck.

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A bitcoin ETF would make the digital currency widely available to millions of investors through common retirement accounts, such as IRAs and 401(k)s.

The highly coveted but elusive bitcoin ETF has been tried before by Tyler and Cameron Winklevoss, who failed to earn SEC approval earlier this year. Regulators disapproved the ETF on several grounds, including lack of regulation and a general inability to enter necessary surveillance-sharing agreements.

The SEC’s ruling on the Winklevoss ETF puts considerable doubt over whether the new products will ever get approved. Analysts say that ETFs could spark an even bigger rally for an asset class that has already added hundreds of billions of dollars to its value this year alone.

Bitcoin Trade Volumes

Bitcoin’s market cap surged past $290 billion on Monday as institutional money flowed into the asset class following the launch of the CBOE futures contract. Trade volumes over the past 24 hours reached $12.6 billion, according to CoinMarketCap.

Bitcoin-dollar transactions on Bitfinex accounted for 11.6% of the daily transaction. South Kore’as Bithumb accounted for nearly 11% of the daily turnover. Coinbase’s GDAX also saw 6.5% of the daily turnover, data showed.

At press time, BTC/USD was trading north of $17,100. Prices skyrocketed past $19,000 last week.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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“Buy Bitcoin” Is Lighting Up Google as Cryptocurrency Outshines Gold

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The Google search engine has been turning up a lot of bitcoin as of late, a sign of growing interest in the cryptocurrency. In fact, searches for how to buy bitcoin have far outpaced similar searches about gold, according to a recent report.

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Bitcoin Search Results

According to The Telegraph, the search term “buy bitcoin” first outstripped “buy gold” on Google in May. Its popularity has since grown manifold. In fact, “buy bitcoin” is now three times more popular than the search term “buy gold” during the 2008-09 financial crisis.

The financial crisis triggered the most protracted recession since the 1930s, making gold the rational choice for risk-averse investors. Gold prices would later surge to record highs, eventually maxing out above $1,900 a troy ounce in 2011.

Bitcoin is often referred to as digital gold for its perceived haven-like status. Although many would disagree with that assertion, bitcoin and gold share some important similarities. Both are finite resources and reflect a general distrust in governments and traditional financial institutions. Apparently, bitcoin has also been used to shield against growing economic, financial and geopolitical risks, although we don’t have enough data to draw definitive conclusions about its risk-hedging capability.

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Bitcoin set another milestone on Thursday by smashing through $14,000. The world’s foremost digital currency has added a jaw-dropping 42% over the past five days, which is equivalent to more than $4,000.

Google search trends tell us that interest in the digital currency skyrocketed once more after prices rose above $10,000 for the first time. As bitcoin crossed the five-digit mark, Google search interest for the coin rose from 26 to 100. According to Google, these numbers represent “search interest relative to the highest point on the chart for the given region and time.” As you might expect, 100 is considered peak popularity for a search term.

Demand Rising

Google search results are a proxy for underlying demand in the cryptocurrency market. Higher search density suggest greater buyer interest and trading volumes for bitcoin. A simple look at the latest trade volume data corroborates this point.

Bitcoin’s 24-hour trading volumes surpassed $13.2 billion on Thursday, according to CoinMarketCap. That’s more than double the previous day’s volumes. Considering that BTC/USD has more than doubled since October, it’s reasonable to assume that higher search results have been associated with increased trading activity.

South Korea’s Bithumb is turning over the most bitcoin trades at the moment. The exchange is responsible for 10% of daily transactions, which is equivalent to roughly $1.3 billion. Bitfinex is a close second at around 9.4% of the total market.

With volume like this, it’s little wonder why bitcoin controls nearly 60% of the cryptocurrency market. Its growth has also triggered a buying frenzy in other cryptocurrencies, commonly referred to as altcoins.

Growing demand for cryptocurrency is also reflected in another key metric – the number of account registrations. For that, we look not further than Coinbase, which is America’s largest cryptocurrency exchange. The platform recently reported 13.3 million accounts, including 100,000 new signups over Thanksgiving weekend.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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