CME Bitcoin Futures Sees Institutional Interest and Demand from Asia

CME Bitcoin Futures Sees Institutional Interest and Demand from Asia

Global markets business CME Group said that institutional interest toward the firm’s Bitcoin futures is thriving and 2019’s third-quarter data showed a record number of open interest. Moreover, despite the lackluster start, the Intercontinental Exchange’s (ICE) Bakkt platform has seen an increase in interest with the company’s physically-settled bitcoin futures product.

Also read: Honestnode Founder Discusses the First Stablecoin Built on Bitcoin Cash

CME Group’s Bitcoin Futures Continue to Prosper

Since going live with its bitcoin futures in December 2017, CME Group’s BTC derivatives has allowed individuals and organizations the ability to hedge exposure to the digital currency. Throughout 2018 and 2019, CME has seen a significant rise in open interest in its bitcoin futures. This summer CME saw unprecedented numbers compared to the volumes recorded a few months prior.

“CME Bitcoin futures reached a record $1.7B in notional value traded on June 26, surpassing the previous record by more than 30% — The surge in volume also set a new open interest record of 6,069 contracts as institutional interest continues to build,” CME Group stated. The Chicago-based exchange detailed on October 11 that open contracts during the third quarter grew significantly in comparison to Q3 2018. The number of outstanding positions almost doubled and the company explained that the rise stems from institutions.

“Institutional interest in CME Bitcoin futures (BTC) continued to build in Q3 with a record number of large open interest holders (25+ BTC),” the trading platform imparted last week.

CME Bitcoin Futures Sees Institutional Interest and Demand from Asia

The news follows CME’s announcement that due to “growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure” the exchange would begin offering options on Bitcoin futures (BTC) in early 2020. The day before it’s third-quarter update, CME Group’s global head of equity index and alternative investment products, Tim McCourt, explained there is a huge interest in bitcoin futures in Asia. For instance, cryptocurrency miners based in Asia appreciate derivatives products because they can hedge their costs. Even though the company is preparing for BTC options, McCourt disclosed that CME is not planning to provide physically-settled products like Bakkt. In an interview, McCourt stated:

While futures give you a one-for-one exposure, whereby the movement of the underlying bitcoin translates directly to a specific dollar value per contract, an option gives you varying strike-price levels and can give you either downside protection, or upside exposure at a fraction of the underlying [assets’] price.

Bakkt’s Bitcoin Futures Volume Spikes and Ethereum and Bitcoin Cash Derivative Products Are Coming Soon

When Bakkt launched its physically-settled bitcoin futures the first week was quite dismal and only started to pick up steam after it executed its first block trade between Galaxy Digital and XBTO. Despite the weak start, Bakkt’s BTC trading volumes rose sharply on October 10, from 25 contracts to 224 contracts seeing a 796% rise. The Bakkt Volume Bot shows that futures volumes touched 53 on October 15 and went up 49% with 79 contracts the day after.

CME Bitcoin Futures Sees Institutional Interest and Demand from Asia

Bakkt CEO Kelly Loeffler believes the future of these derivatives products is just getting started and recently wrote about the subject in a blog post called “The Dawn of an Asset Class.” “Seamless coordination between ICE Futures U.S., ICE Clear US, and the Bakkt Warehouse is an important feature of Bakkt’s Bitcoin Futures,” Loeffler wrote for FIA’s global futures magazine. “Much like cotton and coffee futures contracts that can go to physical delivery, many of the same processes apply to the Bakkt Bitcoin Futures,” Loeffler added:

The Bakkt Warehouse stands between the customer and the clearing member to securely manage bitcoin movements based on deep domain knowledge, along with significant investments in infrastructure and operations. This design allows clearing members to manage margin balances in USD or U.S. Treasuries, rather than bitcoin.

CME Bitcoin Futures Sees Institutional Interest and Demand from Asia
Intercontinental Exchange chairman and CEO, Jeff Sprecher (right), with his wife and Bakkt CEO Kelly Loeffler (left).

The market has shown demand for futures products tied to BTC, but there’s a strong desire for other cryptocurrency derivatives products as well. At Yahoo Finance’s All Markets Summit in New York City on October 10, Heath Tarbert told the press that he believes Ethereum-based futures will be coming. “It is my view as Chairman of the CFTC that Ether is a commodity, and therefore it will be regulated under the CEA. And my guess is that you will see in the near future Ether-related futures contracts and other derivatives potentially traded.” Further, David Shin, the head of the exchange business at Bitcoin.com recently revealed that the public could see a bitcoin cash (BCH) futures products in Q1 2020.

What do you think about the rising interest in Bitcoin and other cryptocurrency products? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Pixabay, CME Group, Bakkt Volume Bot, Twitter, and Bakkt.

Do you want to keep an eye on moving cryptocurrency prices? Visit our Bitcoin Markets tool to get real-time price updates, and head over to our Blockchain Explorer tool to view all previous BCH and BTC transactions.

The post CME Bitcoin Futures Sees Institutional Interest and Demand from Asia appeared first on Bitcoin News.

Original Article

Global Crisis Looms as IMF Report Cites Its Own Policy as Dangerous

Global Crisis Looms as IMF Report Cites Its Own Policy as Dangerous

In a new report by the International Monetary Fund (IMF) entitled “Global Financial Stability Report: Lower for Longer,” the group gives an overview of the current debt-ridden and precarious state of affairs in global economics. Not lost on some economists, however, is the irony that these modern realities are the direct result of policies historically supported by the IMF itself.

Also Read: IMF Has Another Trick Up Its Sleeve When Fiat Fails – Its Own Coin SDR

Flip-Flopping

The six-chapter, 109-page report breaks down the ominous state of global finance and “identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier market economies.” The assessments are not inaccurate, but fail to turn the lens back on the source, and the very causal factors contributing to these realities.

Global Crisis Looms as IMF Report Cites Its Own Policy as Dangerous
Source: IMF

Citing continued easing and precipitously falling bond yields, the IMF calls for more conservative approaches to the management of economic problems, stating:

To reduce the risk that additional easing may have the unintended consequence of leading to a further buildup of financial system vulnerabilities, macroprudential policies should be tightened, as warranted.

The IMF is suddenly very interested in prudence, and the management of systemic risk, encouraging the use of prescribed tools for mitigating dismal effects of prolonged negative interest, QE and easy credit, and the resultant movement of investors into riskier, more illiquid assets. The report maintains that “Low interest rates have reduced debt service costs and may have contributed to an increase in sovereign debt. This has made some governments more susceptible to a sudden and sharp tightening in financial conditions.”

Global Crisis Looms as IMF Report Cites Its Own Policy as Dangerous
Source: IMF

Just three years ago, however, in a 2016 blog post, the group was praising these very same practices, noting that “Although the experience with negative nominal interest rates is limited, we tentatively conclude that overall, they help deliver additional monetary stimulus. Wholesale interest rates have fallen as have some bank lending rates, which should help support demand and price stability.” The post further warns of the very same risks the new report cites, such as institutional entry into risky assets, but still concludes that such policies are helpful overall.

Global Crisis Looms as IMF Report Cites Its Own Policy as Dangerous

Greater Risk Now Condemned

IMF, 2016: “Banks benefit overall from [negative interest] policies that support price stability and growth…” even though “There may also be excessive risk-taking. As banks’ margins are squeezed, they may start lending to riskier borrowers to maintain their profit levels.”

IMF, 2019: “The monetary policy cycle may have reached a turning point in major advanced economies … Persistently low and declining yields on fixed-income instruments have continued to drive institutional investors … to boost returns by using leverage and investing in riskier and less liquid assets.” The report concludes that “Policymakers can help mitigate the buildup of vulnerabilities through appropriate incentives, minimum solvency or liquidity standards, and enhanced disclosures.”

In other words, they warned everyone of their risky, economically unsound plan, encouraged its implementation and adoption, and now are encouraging everyone to pull back quickly.

Global Economic Outlook Unstable

The executive summary of the report states:

Accommodative monetary policy is supporting the economy in the near term, but easy financial conditions are encouraging financial risk-taking and are fueling a further buildup of vulnerabilities in some sectors and countries.

The “some” here may be the understatement of the year. As news.Bitcoin.com has reported extensively, the current global situation is deteriorating rapidly with reckless capital injections, rampant negative interest rate policy implementation, negative yielding debt and once mega-powerful economies beginning to fail. In this sense, the IMF’s report is a mere statement of the obvious for many who are paying attention to the situation. Combined with the continued crackdown on free trade of proposed sound money alternatives like bitcoin, and it’s hard not to wax at least a little bit paranoid. Who knows, perhaps tomorrow the International Monetary fund will be pushing further for the creation of central bank digital currencies (CBDC) as the palliative for all the economic pain they’ve promoted and effected over the years.

What are your thoughts on the IMF’s new report? Let us know in the comments section below.

Image credits: Shutterstock, fair use.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

The post Global Crisis Looms as IMF Report Cites Its Own Policy as Dangerous appeared first on Bitcoin News.

Original Article

SEC Wants Second Look at Bitwise Bitcoin ETF Proposal

SEC Wants Second Look at Bitwise Bitcoin ETF Proposal

The U.S. Securities and Exchange Commission (SEC) is reviewing its order issued last week pertaining to a rejected proposal for a bitcoin exchange-traded fund (ETF). The proposal was filed by NYSE Arca for the Bitwise Bitcoin ETF Trust. Meanwhile, the SEC is also evaluating a proposed rule change for a different type of bitcoin ETF.

Also read: SEC Rejects Another High-Profile Bitcoin ETF Proposal

ETF Order Stayed

The SEC has sent a letter dated Oct. 15 to Intercontinental Exchange (ICE), the parent company of the NYSE, concerning its recent order disapproving NYSE Arca’s proposal to list and trade shares of the Bitwise Bitcoin ETF Trust. This proposal was rejected on Oct. 9. “This letter is to notify you that, pursuant to Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action,” the letter explains, adding:

In accordance with Rule 431(e), the October 9, 2019 order is stayed until the Commission orders otherwise.

SEC Wants Second Look at Bitwise Bitcoin ETF Proposal

The letter continues, “The Office of the Secretary will notify you of any pertinent action taken by the Commission.”

Prior to the Oct. 9 rejection, ICE and Bitwise had been actively discussing their bitcoin ETF proposal with the SEC. The Commission emphasized that its disapproval “does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.” This is also not the first time the SEC has taken this action. In August last year, the Commission did the same with three orders for nine bitcoin ETFs.

T-Bill Bitcoin ETF in the Running

Besides reviewing the order disapproving the proposal for the Bitwise Bitcoin ETF Trust, the SEC is currently evaluating another proposed rule change filed by NYSE Arca. The exchange is seeking to list and trade shares of the United States Bitcoin and Treasury Investment Trust.

SEC Wants Second Look at Bitwise Bitcoin ETF Proposal

The proposal was first filed with the agency on June 12 and published in the Federal Register on July 1. The exchange filed Amendment No. 1 to the proposed rule change on Oct. 4, after which the SEC proceeded to solicit comments from the public. As of Oct. 10, the agency says it has received nine comments on the proposal.

According to the amendment, “the trust will have no assets other than (a) bitcoin and (b) short-term U.S. Treasury securities with a maturity of less than one year (‘T-Bills’).” Further, the trust will hold U.S. dollars for short periods of time in connection with the maturity of the T-bills, the sale and purchase of the underlying assets, redemptions, if any, and expenses of the trust.

Do you think the SEC will approve any bitcoin ETF proposal anytime soon? Let us know in the comments section below.

Images courtesy of Shutterstock.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

The post SEC Wants Second Look at Bitwise Bitcoin ETF Proposal appeared first on Bitcoin News.

Original Article