Crypto Derivatives Might Drive a New Cycle of Mass Adoption

Crypto Derivatives Might Drive a New Cycle of Mass Adoption

Like every maturing industry, the cryptocurrency market is experiencing extensive developments on many fronts. The potential continues growing every year — from the emergence of initial coin offerings, the first blockchain-based projects and speculation on Bitcoin’s (BTC) price to decentralized finance and central bank digital currencies.

Crypto has never run out of hot topics. Now, in 2020, the crypto asset field is no longer regarded as just another “dot-com bubble.” The subject is gaining more traction over the globe, and as COVID-19’s emergence has streamlined digital assets and crypto’s popularity, mainstream acceptance is just a few steps away. The derivatives market play may be too complicated for mainstream users, but it’s one of the currently popular directions that must not be neglected.

Alongside increasing interest from the general public and institutions, the trade volumes on global cryptocurrency platforms have been continually growing over the past few years, and so too has the range of trading products that further support crypto’s confident march onward.

Derivatives are an essential part of every market development cycle, with one of the key drivers of the crypto trading field being the derivatives trading segment. In today’s world, where Bitcoin is well recognized by major institutional investors and every third global company buys crypto, monthly trade volumes have reached hundreds of billions of dollars.

The primary crypto derivatives products include futures, options and swaps, mostly offered against the number one asset — Bitcoin. Crypto derivatives trading is popular among the crypto community, as it represents an option to manage risks efficiently and utilize leverage options to maximize profits at the same time.

With the COVID-19 pandemic ravaging the world and financial systems recovering from the shock, the crypto derivatives market started growing significantly, reaching an all-time high volume of $600 billion in March. Then, according to recent reports issued by CryptoCompare, crypto-backed derivatives trading of both perpetual swap and futures contracts reached another all-time high volume of $602 billion in May.

So, what’s the reason for such a massive surge in crypto derivatives trading during the last few months? Nothing unusual — it’s quite a natural phenomenon. Let’s compare the bond market and the stock market. In the stock market, one can potentially get higher returns at a greater risk compared with the bond market. The current economic crisis has meant it is more challenging to find relevant trends that would allow us to get better returns, as most trends clearly correlate with changes due to COVID-19. While the cryptocurrency market is still quite a Wild West and is extremely volatile, despite a growing maturity, many people simply search for a way to increase their activity with derivative instruments with a goal of higher profitability. As time passes, economies will start to recover, but then the balance may change again, and the demand for derivatives on cryptocurrencies may decrease. The volume will still remain large, but the growth rate will slow down.

The advent of the crypto market product came unexpectedly, so Know Your Customer and Anti-Money Laundering infrastructure and methodologies in most countries were not ready to “digest” the new paradigm according to which these new assets work. Putting it simply, the principles of transferring values from one owner to another in cryptocurrencies fundamentally differ from the ones underlying fiat money.

Secondly, the specifics associated with the issuance and governance of assets such as Bitcoin and other crypto tokens created difficulties with the identification and established responsibility between their issuers — which in some cases are absent — and tokenholders. Depending on the financial system’s stability, the nature of cryptocurrency creates financial and other risks and issues for each type of regulation. The vacuum in solving these issues is filled in different ways.

Speaking of the nature of cryptocurrency derivatives, the main types presented on the market today are contract for difference, or CFD; exchange for difference, or EFD; and Bitcoin futures. In the first two cases, it is a function of the value of the crypto asset but defined in financial instruments for which the regulatory framework already exists everywhere. It often contributes specifically to their development because when using derivatives by participants in the financial market, the logic of the existing KYC/AML procedures are not violated and the emission of crypto assets is not realized.

Therefore, the logic of regulatory processes remains in spite of the very close financial targets of derivatives use by market participants.

At the same time, unscrupulous market participants often take advantage of their clients’ low awareness, issuing derivative instruments for the underlying asset on which they are built. For example, this is what Revolut does: The British neobank’s customers cannot use cryptocurrency purchased through the platform outside of it. What people buy is not a cryptocurrency but rather a CFD on the cryptocurrency without the right to own these assets. It turns out that regulation does not protect clients since Revolut does not inform customers about the true nature of the offered services.

Generally, derivatives nowadays are a rather speculative instrument, with the only goal of producing a capital gain or loss requiring very little capital.

Classic examples of shifting old approaches into the new system will not happen, and despite the increasingly popular and record-breaking auction of derivatives, this is not what contributes to the adoption of cryptocurrency for its widespread use. All that we witness today is an intermediate stage, with these current companies and projects simply adapting themselves to the existing demand.

The technology will become mainstream with the emergence of products that possess specific qualities: being globally accepted, easy-to-use and with open source acting as a platform for any operations — from exchanging money to buying tickets and protecting information and privacy.

The infamous and highly anticipated TON initiative, which was abandoned by the Telegram team last month, could become such a project and shine a light into crypto ecosystems. However, having lost a legal battle with the United States Securities and Exchange Commission, this initiative has been transferred into users’ hands. Libra is becoming a potential contender, with Facebook most likely to start by allowing Libra users to pay for advertising services and buy goods on its marketplace. It may take more than a year to see the first results of mass adoption if Facebook finally succeeds in launching it.

It seems that cryptocurrency derivatives literally “slipped” through the regulatory meat grinder that many native cryptocurrencies and tokens had to go through. We know that derivatives are pretty popular in the U.S., Europe and the United Kingdom, as well as offshore zones. All of these jurisdictions do a great job of regulating these instruments.

As we dive further into the crypto world’s reality, more apps and products built around blockchain and cryptocurrencies are establishing ever more complex services and ecosystems. While still in regulatory uncertainty, blockchain-based ecosystems and global initiatives will help to unite people and establish a bridge to unbanked countries. With even institutions now investing in cryptocurrencies in a big way, a new kind of economy built upon the crypto foundation layer is becoming reality, and we are all helping to make it happen.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Alex Axelrod is the founder and CEO of Aximetria and Pay Reverse. He is also a serial entrepreneur with over a decade of experience in leading world-class technological roles within a large, number-one national mobile operator and leading financial organizations. Prior to these roles, he was the director of big data at the research and development center of JSFC AFK Systems.

Source: bitcoin.marketing


This Confluence Of Bearish Factors Shows Ripple (XRP) Could Dive Again

This Confluence Of Bearish Factors Shows Ripple (XRP) Could Dive Again

Ripple (XRP)

Ripple started an upside correction after trading as low as $0.1690 against the US Dollar. XRP price is currently facing a strong resistance at $0.1800 and it could resume its decline.

  • Ripple corrected higher above the $0.1720 and $0.1750 resistance levels against the US dollar.
  • The price is currently struggling to clear the $0.1800 resistance region and the 100 hourly SMA.
  • There is a connecting bearish trend line forming with resistance near $0.1780 on the hourly chart of the XRP/USD pair (data source from Kraken).
  • The pair must settle above the $0.1800 resistance to start a steady recovery in the near term.

This past week, ripple price extended its decline below the $0.1900 support. XRP broke many key supports near $0.1880 to move further into a bearish zone.

More importantly, there was a close below the $0.1800 level and the 100 hourly simple moving average. It traded to a new monthly low at $0.1690 and recently started an upside correction. The bulls pushed the price above the $0.1720 and $0.1750 resistance levels.

The price even spiked above the 50% Fib retracement level of the downward move from the $0.1866 high to $0.1690 low. However, the previous support near the $0.1800 level is now acting as a strong resistance for the bulls.

Ripple Price

Ripple price trades below $0.1800. Source: TradingView.com

There is also a connecting bearish trend line forming with resistance near $0.1780 on the hourly chart of the XRP/USD pair. Above the trend line, the 61.8% Fib retracement level of the downward move from the $0.1866 high to $0.1690 low is near $0.1800 and the 100 hourly simple moving average.

The bulls need to clear the $0.1800 resistance level and the 100 hourly SMA to start a steady increase. If they succeed, the price could recover towards the $0.1880 and $0.1900 resistance levels.

Conversely, ripple price might start a fresh drop from the $0.1800 resistance level. An initial support is near the $0.1760 and $0.1750 levels.

If the price settles below the $0.1750 support, it could continue to move down and resume its decline. The next crucial support is at $0.1700, followed by $0.1680.

Technical Indicators

Hourly MACD – The MACD for XRP/USD is slowly moving back into the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is declining and it is currently below the 50 level.

Major Support Levels – $0.1750, $0.1700 and $0.1680.

Major Resistance Levels – $0.1780, $0.1800 and $0.1880.

Take advantage of the trading opportunities with Plus500

Risk disclaimer: 76.4% of retail CFD accounts lose money.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a DECADE as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

Source: www.newsbtc.com

Author: Aayush Jindal


Nonfungible Tokens Could Change the Way We Own Things

Nonfungible Tokens Could Change the Way We Own Things

Blockchain technology is widely associated with the exchange of interchangeable digital assets, from payment systems like Zcash (ZEC) and Libra to platforms like Ethereum and Substrate, using what are known as fungible tokens. An item that is fungible is interchangeable with another identical item. Your dollar bill and my dollar bill, your Bitcoin (BTC) and my Bitcoin, are all worth the same amount.

However, nonfungible tokens are not worth the same as any other token or currency, even one that may seem similar. While this characteristic may appear impractical — especially considering the trading utility of tokens — it is a very desirable feature if the goal is to protect the value of an asset. For this reason, nonfungible tokens have been revolutionizing the ownership of tokenized art and intellectual property.

To fully understand the difference between fungible and nonfungible tokens and the role each type of token plays in the blockchain ecosystem, you must first understand fungibility and nonfungibility.

Fungible tokens are by far the most popular tokens currently on blockchains — think Bitcoin or Litecoin (LTC). While these tokens often have to adjust for fluctuations in price, they are most often able to be exchanged for other fungible tokens at the same price they were purchased at. Not only does this make fungible tokens more convenient for trading but it also enables the high levels of liquidity enjoyed across the cryptocurrency markets.

Nonfungible tokens are a different beast. Though they can be bought and sold using fungible tokens, they are their own asset class. Identifying information is embedded in their smart contracts, which is what makes each nonfungible token completely unique. This uniqueness makes nonfungible tokens unsuitable for most stereotypical crypto trading purposes but ideal for recording and storing the ownership of digital items like collectibles, games and even art. 

While NFTs are digital assets, there have been interesting moves to tie them to physical, real-world objects. Unisocks, for example, allows you to purchase a $SOCKS token (fungible) that you can then redeem for a pair of real socks and an NFT representing ownership of that pair of socks. Saint Fame has a similar setup with its $FAME and $ICK tokens, which you can redeem for a physical shirt and mask, respectively. And, 12 real-world prints of the CryptoPunks characters were made and put in a Zurich art gallery, with sealed envelopes on the back containing a paper wallet.

If those all seem niche, consider that traditional auction houses like Sotheby’s and Christie’s, who control up to 80% of the secondary art market, have begun investigating blockchain-based solutions. Sotheby’s has said it plans to leverage blockchain technology for preserving ownership of artwork, though it’s less bullish on cryptocurrency, saying it has no plans to accept it. In 2018, Christie’s used blockchain registrar Artory — founded by a former Sotheby’s employee — to enable and record the sale of a private art collection, which sold for $323 million. 

The interesting thing is blockchain-based art could eliminate the need for these corporations. Given that the origin and history of ownership can be verified publicly on-chain, only someone holding the private keys can actually transfer the art. Moreover, like many of these projects, a real-world and digital solution will have to coexist for some time.

Related: Art and Blockchain: Revolution in Art Collecting

What NFTs have most successfully accomplished is proving the range of things that can be tokenized. A picture, a sound, a fraction of a video, or even a game piece can all be turned into a tokenized asset, opening the doors for intellectual property to be revolutionized in the burgeoning digital age.

Existing models around art creation, ownership and resale rarely benefit the artist. Imagine you create and sell a painting for $900, only to have the buyer resell it 15 years later for $85,000, with none of that profit going to you — the creator. 

This is exactly what happened to painter and graphic artist Robert Rauschenberg. He was from the United States where no federal resale royalty rights exist, but even in the few states and countries where they do, the sale still has to meet certain criteria for you to be eligible. Imagine, instead, you tokenize your art and attach a smart contract that enforces a certain percentage of every sale be sent to the original address. This allows for infinitely paying royalties with no restrictions on your country of residence, size of the sale, or how old you are when it’s sold. This setup could be a game-changer for artists who often only see returns on the original sale. 

The crypto space is known for speculators, people looking to get rich quick versus being invested in contributing to building a lasting ecosystem. That can’t be said of many projects in the NFT space, which are specifically built with a long-term vision in mind. OpenLaw has helped to create an end-to-end real estate transaction using NFTs to represent ownership of property, something that could get rid of the expensive, and lengthy, title verification process in places like the U.S. 

0xcert’s Evidenspace product allows for the issuance (and verification) of NFT-based academic credentials — a hopeful solution for forged credentials. This is a big deal since research has shown more than half the people who claim to have Ph.D.s are likely lying. And GenoBank’s current goal is to allow people to fully own their DNA (you often lose these rights when you send your data to companies like 23andMe that can, and do, sell your data to drugmakers), meaning you could sell or donate it as you wished for product development and scientific research. 

As NFTs have been gaining popularity in the crypto and broader tech industries, they have started to attract investors and spawned projects in other spaces like retail, sports and even politics. In the past year alone, Nike filed a patent for tokenizing shoes on Ethereum; Formula 1 held an auction for Formula 1 car-branded NFTs; and Brooklyn Nets NBA player Spencer Diwiddie attempted to tokenize his contract to allow fans to participate in his success, though the NBA prevented him from doing so. The ongoing coronavirus pandemic has continued the discussion around whether blockchain technology could be used for secure, virtual voting in the U.S., a move that could lead to NFTs making their way into the political sphere.

With the world becoming more and more digital, NFTs present a very viable solution for tokenizing ownership and property. These tokens allow for real-world assets to be properly digitized and stored while simultaneously keeping them secure, ultimately revolutionizing the compensation, storage, legality and the security of property.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Trinity Montoya is a protocol engineer at Bison Trails — a leading blockchain infrastructure provider. A software engineer for seven years, she’s worked exclusively at early-stage startups in New York City and Boston. A New York City native, she’s currently in Colorado with her monster dog, Zapp.

Source: bitcoin.marketing


Silver (XAGUSD) Price; When Will Silver Breakout the Trading Range?

Silver (XAGUSD) Price; When Will Silver Breakout the Trading Range?

In case the bulls can push the price above the resistance level of $18.1 with the daily candle close above it, the nearest resistance level can be found at $18.8. Further increase in price may expose it to $19.5 price level. In case the bears prevail and break out at the support level of $17.3, it may lead to a further decrease in price to $16.6 and $15.7.

On the long-term outlook, XAGUSD (Silver) is on the ranging mode. Silver has been maintaining its movement within the range of $18.1 and $17.3 price levels for more than two weeks. At the time of writing, the bulls and the bears are demonstrating equilibrium in their momentum. The effort made by the bulls to push the Sliver price out of the consolidation zone failed.

The two EMAS remains horizontally placed and close to each other with the Silver price continue hovering over the 9 periods EMA and the 21 periods EMA; this indicates that consolidation is in progress in the Silver market. In case the bulls can push the price above the resistance level of $18.1 with the daily candle close above it, the nearest resistance level can be found at $18.8. Further increase in price may expose it to $19.5 price level. In case the bears prevail and break out at the support level of $17.3, it may lead to a further decrease in price to $16.6 and $15.7. The Relative Strength Index period 14 is at 60 levels with the signal line showing no direction which indicates that consolidation is in progress.

XAGUSD is ranging on the medium chart. The sideways movement continues in the Silver market on the 4-hour chart. Breakout is imminent, radical fundamental events may be needed to take Silver price away from the ranging zone. Silver price remains trading within the horizontal channel. Consolidation may continue until the price break out of the channel.

The two EMAs are interlocked to each other and the price is hovering over the 9 periods EMA and 21 periods EMA. However, the Relative Strength Index period 14 is below 60 levels with the signal lines pointing down which indicate sell signal.

Source: www.cryptovibes.com


12 Lessons From Winning and Losing $12 Million in Crypto

12 Lessons From Winning and Losing $12 Million in Crypto

Over the last few years, I gained over $12 million dollars investing in cryptocurrencies. I did not take a single profit until they maxed out at a hundredfold at the very peak of the market in December 2017. The timing was perfect, I nailed it. However, I only took a small percentage of those gains to then reinvest in a blockchain startup.

Then, the market crashed on me. I didn’t sell or de-risk my positions. If anything, I participated in pre-ICOs, adding more risk — and losses — to the table. This is what I’ve learned from riding the crypto market all the way up and down:

  • Continue Reading on Coin Telegraph

    Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

    Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

    Source: theclassyinvestor.com

    Author: by


    Crypto Derivatives Might Drive a New Cycle of Mass Adoption

    Crypto Derivatives Might Drive a New Cycle of Mass Adoption

    Like every maturing industry, the cryptocurrency market is experiencing extensive developments on many fronts. The potential continues growing every year — from the emergence of initial coin offerings, the first blockchain-based projects and speculation on Bitcoin’s (BTC) price to decentralized finance and central bank digital currencies.

    Crypto has never run out of hot topics. Now, in 2020, the crypto asset field is no longer regarded as just another “dot-com bubble.” The subject is gaining more traction over the globe, and as COVID-19’s emergence has streamlined digital assets and crypto’s popularity, mainstream acceptance is just a few steps away. The derivatives market play may be too complicated for mainstream users, but it’s one of the currently popular directions that must not be neglected.

    Alongside increasing interest from the general public and institutions, the trade volumes on global cryptocurrency platforms have been continually growing over the past few years, and so too has the range of trading products that further support crypto’s confident march onward.

    Derivatives are an essential part of every market development cycle, with one of the key drivers of the crypto trading field being the derivatives trading segment. In today’s world, where Bitcoin is well recognized by major institutional investors and every third global company buys crypto, monthly trade volumes have reached hundreds of billions of dollars.

    The primary crypto derivatives products include futures, options and swaps, mostly offered against the number one asset — Bitcoin. Crypto derivatives trading is popular among the crypto community, as it represents an option to manage risks efficiently and utilize leverage options to maximize profits at the same time.

    With the COVID-19 pandemic ravaging the world and financial systems recovering from the shock, the crypto derivatives market started growing significantly, reaching an all-time high volume of $600 billion in March. Then, according to recent reports issued by CryptoCompare, crypto-backed derivatives trading of both perpetual swap and futures contracts reached another all-time high volume of $602 billion in May.

    So, what’s the reason for such a massive surge in crypto derivatives trading during the last few months? Nothing unusual — it’s quite a natural phenomenon. Let’s compare the bond market and the stock market. In the stock market, one can potentially get higher returns at a greater risk compared with the bond market. The current economic crisis has meant it is more challenging to find relevant trends that would allow us to get better returns, as most trends clearly correlate with changes due to COVID-19. While the cryptocurrency market is still quite a Wild West and is extremely volatile, despite a growing maturity, many people simply search for a way to increase their activity with derivative instruments with a goal of higher profitability. As time passes, economies will start to recover, but then the balance may change again, and the demand for derivatives on cryptocurrencies may decrease. The volume will still remain large, but the growth rate will slow down.

    The advent of the crypto market product came unexpectedly, so Know Your Customer and Anti-Money Laundering infrastructure and methodologies in most countries were not ready to “digest” the new paradigm according to which these new assets work. Putting it simply, the principles of transferring values from one owner to another in cryptocurrencies fundamentally differ from the ones underlying fiat money.

    Secondly, the specifics associated with the issuance and governance of assets such as Bitcoin and other crypto tokens created difficulties with the identification and established responsibility between their issuers — which in some cases are absent — and tokenholders. Depending on the financial system’s stability, the nature of cryptocurrency creates financial and other risks and issues for each type of regulation. The vacuum in solving these issues is filled in different ways.

    Speaking of the nature of cryptocurrency derivatives, the main types presented on the market today are contract for difference, or CFD; exchange for difference, or EFD; and Bitcoin futures. In the first two cases, it is a function of the value of the crypto asset but defined in financial instruments for which the regulatory framework already exists everywhere. It often contributes specifically to their development because when using derivatives by participants in the financial market, the logic of the existing KYC/AML procedures are not violated and the emission of crypto assets is not realized.

    Therefore, the logic of regulatory processes remains in spite of the very close financial targets of derivatives use by market participants.

    At the same time, unscrupulous market participants often take advantage of their clients’ low awareness, issuing derivative instruments for the underlying asset on which they are built. For example, this is what Revolut does: The British neobank’s customers cannot use cryptocurrency purchased through the platform outside of it. What people buy is not a cryptocurrency but rather a CFD on the cryptocurrency without the right to own these assets. It turns out that regulation does not protect clients since Revolut does not inform customers about the true nature of the offered services.

    Generally, derivatives nowadays are a rather speculative instrument, with the only goal of producing a capital gain or loss requiring very little capital.

    Classic examples of shifting old approaches into the new system will not happen, and despite the increasingly popular and record-breaking auction of derivatives, this is not what contributes to the adoption of cryptocurrency for its widespread use. All that we witness today is an intermediate stage, with these current companies and projects simply adapting themselves to the existing demand.

    The technology will become mainstream with the emergence of products that possess specific qualities: being globally accepted, easy-to-use and with open source acting as a platform for any operations — from exchanging money to buying tickets and protecting information and privacy.

    The infamous and highly anticipated TON initiative, which was abandoned by the Telegram team last month, could become such a project and shine a light into crypto ecosystems. However, having lost a legal battle with the United States Securities and Exchange Commission, this initiative has been transferred into users’ hands. Libra is becoming a potential contender, with Facebook most likely to start by allowing Libra users to pay for advertising services and buy goods on its marketplace. It may take more than a year to see the first results of mass adoption if Facebook finally succeeds in launching it.

    It seems that cryptocurrency derivatives literally “slipped” through the regulatory meat grinder that many native cryptocurrencies and tokens had to go through. We know that derivatives are pretty popular in the U.S., Europe and the United Kingdom, as well as offshore zones. All of these jurisdictions do a great job of regulating these instruments.

    As we dive further into the crypto world’s reality, more apps and products built around blockchain and cryptocurrencies are establishing ever more complex services and ecosystems. While still in regulatory uncertainty, blockchain-based ecosystems and global initiatives will help to unite people and establish a bridge to unbanked countries. With even institutions now investing in cryptocurrencies in a big way, a new kind of economy built upon the crypto foundation layer is becoming reality, and we are all helping to make it happen.

    The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

    Alex Axelrod is the founder and CEO of Aximetria and Pay Reverse. He is also a serial entrepreneur with over a decade of experience in leading world-class technological roles within a large, number-one national mobile operator and leading financial organizations. Prior to these roles, he was the director of big data at the research and development center of JSFC AFK Systems.

    Source: www.cryptobitnews.co.uk


    Crypto Derivatives Might Drive a New Cycle of Mass Adoption


    Leave a Reply

    Your email address will not be published. Required fields are marked *