Britain’s GCHQ Spy Agency Is Closely Monitoring Bitcoin

Britain’s GCHQ Spy Agency Is Monitoring the Threat Posed by Bitcoin

GCHQ, the British equivalent of the NSA, is closely monitoring bitcoin at the behest of its government. The code-cracking agency, famous for deciphering German communications via its Enigma machine in World War II, now has a new threat to track. Like many other government agencies around the world, it has taken a keen interest in bitcoin.

Also read: UK Ministry of Treasury Plans to Regulate Bitcoin

The UK’s GCHQ is Watching BTC

Britain’s GCHQ Spy Agency Is Monitoring the Threat Posed by Bitcoin
GCHQ’s HQ

Government Communications Headquarters, better known as GCHQ, was founded in 1919 and, in its own words, has been “keeping Britain safe ever since”. In 2015, it emerged in the leaked Snowden documents that this remit included collecting information from “every visible user on the internet”, hacking into smartphones using a tool named “Smurf suite”, and eavesdropping on the communications of British politicians.

It’s safe to say that bitcoin isn’t new to GCHQ. The agency has taken a renewed interest in the virtual currency though in recent months following bitcoin’s stellar ascent which has taken many people by surprise. Chris Ensor, the deputy director for GCHQ’s National Cyber Security Centre division, told The Telegraph that British government departments have ordered it to investigate security risks posed by bitcoin. He said:

We are interested in anything that could affect the country, so Bitcoin is a major thing now.

The agency is reportedly exploring bitcoin from various angles, including how it works, the possible benefits of harnessing its blockchain technology, and the possible threat it poses to the country’s monetary system. Like everyone who’s new to bitcoin, many British politicians are intrigued by the currency, but are also wary.

Britain’s GCHQ Spy Agency Is Monitoring the Threat Posed by Bitcoin
Street art close to GCHQ’s Cheltenham headquarters

“Government departments are saying to us ‘We want to use some of this technology so is it safe?’ or simply ‘How does it work?’” said Chris Ensor. Departments that GCHQ is assisting include the Treasury, the UK’s equivalent of the U.S. Federal Reserve. As recently reported by news.Bitcoin.com, the Treasury has plans to regulate bitcoin, amidst the usual concerns about tax evasion and money laundering.

Bitcoin has long been synonymous with spy agencies, with some people claiming that the digital currency was in fact a creation of the NSA or CIA. There is little evidence to support this, and other conspiracy theorists have pointed to the fact that Satoshi Nakamoto’s last communication occurred shortly after bitcoin developer Gavin Andresen was invited to address the CIA in 2011. Any technology that poses a threat to the established global order is bound to be examined closely by the three and four-letter agencies. Right now, bitcoin is a prime target for scrutiny.

Do you think government spy agencies pose a threat to bitcoin, or are they simply intrigued by its uses? Let us know in the comments section below.


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Thinking of Shorting Bitcoin Futures? GBTC Bears Nurse Big Losses

Thinking of Shorting Bitcoin Futures? GBTC Bears Nurse Big Losses

With Cboe launching its futures markets and CME set to begin its bitcoin derivatives products next week, many people are speculating on individuals and organizations short selling the cryptocurrency. However, there already is a publicly traded bitcoin investment vehicle called the Bitcoin Trust (GBTC) that can be short sold as well. Although, those trying to short GBTC this year have been getting burned as GBTC short sales are down 217 percent.

Also Read: Lightning Network’s New Infrastructure and Interoperability

Traders Who Tried to Short Sell GBTC This Year Are Nursing Significant Losses

Thinking of Shorting Bitcoin Futures? GBTC Bears Nurse Big Losses
GBTC shares can be short sold but traders attempting to do so have been ‘losing their shirts’ this year according to financial analysts.

Futures markets are coming to bitcoin as the most prominent exchanges in the world are set to offer bitcoin-based derivatives products to mainstream investors. However, many bitcoiners are scared that ‘Wall Street types’ and other entities will ‘short’ bitcoin’s price value to oblivion. Short selling is when an investor or a group of people are motivated by the belief that bitcoin’s market price will go down in the future. Short traders then place a bet against bitcoin’s price in hopes it will drop. There are many reasons why investors would short sell bitcoin as the process can be lucrative if a person can predict large price dips. 2017 hasn’t been very favorable for those trying to short GBTC as the managing director at S3 Partners LLC, Ihor Dusaniwsky, explains many traders are getting burned.

For instance, a $1M short position created in September would net a loss of roughly $622,000 Dusaniwsky explains to the financial publication Market Watch.          

“It has been brutal for bitcoin shorts. We estimate shorts are down about $46 million in year-to-date mark-to-market losses, or down 217%,” Dusaniwsky tells the financial news outlet.

Thinking of Shorting Bitcoin Futures? GBTC Bears Nurse Big Losses

 

Some Well-Known Short Sellers See an Opportunity With Bitcoin Markets

Even though short sellers have been nursing substantial losses this year, some traders are still taking their chances. According to the founder of Citron Research, Andrew Left, who is well known for placing extremely lucrative shorts against pharmaceutical company stocks, has revealed that he’s been short selling Bitcoin Trust shares. Left details to Market Watch that his shorts on bitcoin this year have been “very successful” and he plans to short GBTC again on the current BTC price run-up. Left emphasized why he believes it’s a good time to short GBTC stating;

I think the current spike in bitcoin is more due to manipulation and not the free market.  

Paying a Premium to Ride the Bitcoin Roller Coaster

Another reason people believe shorting GBTC is risky is because the fees for entry are predominantly high. “New shorts are being charged 18.5% because the overall float is relatively small,” Dusaniwsky explains, and he believes the fees will rise by 50 percent annually.

“While the futures contract will allow easier and safer bitcoin short selling, it will also allow for easier and safer bitcoin long buying,” Dusaniwsky concludes.  

Both sides will be paying a premium in order to ride the bitcoin roller coaster once the Cboe futures start trading.

What do you think about traders getting burned trying to short sell GBTC this year? Let us know in the comments below.


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This Week in Bitcoin: Mania, Meltdown, and Futures Fever

This Week in Bitcoin: Mania, Meltdown, and Futures Fever

Well, that was emotional. What exactly? Oh, you know: every single second of the past seven days in bitcoin. If you didn’t have palms sweaty, knees weak, and arms heavy, you clearly don’t have enough invested in bitcoin. Even for those who are only emotionally invested in the virtual currency’s future, the last few days have been intense. Welcome to the latest edition of This Week in Bitcoin.

Also read: Here’s What You Should Know About Cboe’s Bitcoin Futures Launch

No Sleep Till Futures

This Week in Bitcoin: Mania, Meltdown, and Futures FeverTime is both constant and subjective. Technically this week passed at its usual pace, but with all eyes on today’s futures trading launch, there were spells when everything seemed to drag – not to mention lag, for anyone trying to access a bitcoin exchange at the height of the trading frenzy. Bitcoin has a tendency to go nuts mid-week. This has its upsides though, such as allowing us to file some sensible stories at the start of the week before everyone gets distracted by talk of 1,000-year bull runs.

Did we say sensible stories? Actually, scrap that, as there’s nothing remotely sensible about forking bitcoin on Christmas Day to birth a coin named Bitcoin God. While many were amused, others called blasphemy in the comments section. Later in the week, we published a guide to claiming the glut of forked coins that are incoming, for those who are so inclined. Like Bitcoin God, there’s nothing remotely sensible about Crypto Kitties, but that didn’t stop readers from gleefully lapping up news of ethereum’s blockchain congestion like kitten milk. We said:

Bitcoin and ethereum are still at the early adopter stage, when problems caused by virtual kitty birthing induce more laughs than groans. For blockchains to be relied on by major enterprises, however, solutions will need to be found that can overcome the threat posed by digital cats.

On a more sombering note, word broke of a Michigan man who was jailed for a year for “unlicensed money transmitting” – that’s right, selling bitcoins on Localbitcoins.com. You had a lot to say about that one. On Wednesday, as bitcoin was readying for the most dizzying vertical seen since 2013, while Mt Gox was in its death throes, we issued a warning about fake cryptocurrency apps. The Android v iPhone debate will never be settled, but what’s indisputable is that Apple’s app submission policy is far more rigorous than Google’s. The Play store is a minefield. Tread carefully.

Pick a Number, Any Number, and Double It

This Week in Bitcoin: Mania, Meltdown, and Futures FeverIt’s hard to say what price bitcoin reached midweek as it really depends on what exchange you were using, and indeed whether you could even access your usual exchange. Bitcoin hit $20,000 on Coinbase before the site – whose app topped the iOS charts at the height of the mania – then went down. Gdax also struggled, and there were weird goings on at Bitfinex. (What’s new?) We did our best to round up the best of the drama, including news of 200,000 unconfirmed transactions that caused the network to grind to a halt. No one was laughing at ethereum now – but no one was buying it either. Bitcoin’s giddy ascent had every single altcoin REKT and Coinbase pleading for calm.

While bitcoin traders were glued to the charts, we brought news of developments from all corners of the globe including South Korea banning futures trading and a gold mining company whose shares jumped 1,300% after switching to bitcoin. Elsewhere, in China we revealed how no less than 107 scamcoins are being investigated for, well, being scamcoins. We said:

A Chinese woman surnamed Yang invested all of her savings in “Five Elements Coin” without her husband’s knowledge. Not only that, she successfully convinced ten of her relatives to buy it…her husband divorced her when he realized that she already spent all of their savings.

To console those rueing not having bought bitcoin sooner, we issued some words of consolation, noting:

We’re privileged to live in a time where it’s possible to acquire wealth through little more than pushing a few buttons and waiting a while. If bitcoin continues on the trajectory that many have predicted, missing out on the first $10-$15k will be like grumbling because you bought bitcoin when it was a dollar instead of a cent.

Nicehash Drop the H-Bomb

A weekly roundup of bitcoin news wouldn’t be complete without a monster hack, and it duly arrived on Thursday. Mining pool Nicehash dropped the H-bomb by revealing that they’d been hacked of $60 million worth of bitcoins – a figure which rose rapidly in line with bitcoin’s stratospheric ascent. While bitcoin was making Nicehash miners poorer, it was making Bulgaria richer. The country can theoretically pay off 20% of its national debt, now that the $500 million of bitcoins it seized at the start of the year are worth $3.2 billion. There’s just one problem: officials say they don’t have the bitcoins. Hmm.

This Week in Bitcoin: Mania, Meltdown, and Futures Fever

To ease into the weekend, we published a couple of easy reads: 30 People Who Were Really Wrong About Bitcoin and 10 of the Biggest Lies Told About Bitcoin. Meanwhile, Eric Wall bravely tried to short the great bitcoin bull run and we pondered the merits of real estate v bitcoin as an investment strategy.

Known Unknowns and Unknown Unknowns

This Week in Bitcoin: Mania, Meltdown, and Futures FeverWe finished the week with an update on Lightning Network developments. Stories like this attract less clicks than the more salacious stuff, but the value of these developments to the bitcoin ecosystem are infinitely more profound. We’ll finish this week’s roundup where we started: with bitcoin futures, which are about to kick off. Here’s everything you need to know. It’s possible that futures trading could be a damp squib. Then again, it’s possible that it could usher in levels of volatility that will make bitcoin’s movement to date look like a ripple on a pond.

If the force of all those traders hitting F5 to refresh the bitcoin ticker doesn’t trigger a wormhole, sucking us into an alternate universe in which Dogecoin is king, we’ll see you next week for more highlights from the utterly exhilarating world of bitcoin.

Do you think futures will tame bitcoin or increase its volatility? Let us know in the comments section below.


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Bitfinex Withdrawal Difficulties May Have Contributed to Litecoin Spike

Bitfinex Withdrawal Difficulties May Have Contributed to Litecoin Spike

Some cryptocurrency traders are attributing the recent Litecoin spike to the withdrawal issues that have plagued Bitfinex in recent days. The theory proposes that customers of the exchange posting about Litecoin withdrawals processing successfully may have inspired a rush of Bitfinex’s customers to convert their holdings into LTC – as suggested by posts on Reddit.

Also Read: Bitfinex Experiences Withdrawal Difficulties

On the 8th of December, Litecoin Made an Aggressively Break Above the $100 USD Area

The breakout saw Litecoin post gains of over 60% in just two days – shooting up from an opening price of approximately $93.60 USD to set a new all-time high of nearly $160 USD, before closing at approximately $148.75 USD. The LTC markets have since retraced to test the $140 USD area, with many traders speculating on whether or not Litecoin’s bullish momentum can be sustainable.

Bitfinex Withdrawal Difficulties May Have Contributed to Litecoin Spike

Some traders believe that the LTC’s exuberant price action can be attributed to Bitfinex’s current difficulties processing withdrawals. Over the course of the last week, Bitfinex’s subreddit has increasingly become awash with posts from concerned customers complaining that withdrawal requests in a number of cryptocurrencies have not been completed after several days of waiting. Yesterday, a number of Redditors attested to having had Litecoin withdrawal requests processed quickly, potentially leading to a run of Bitfinex customers converting their holdings into Litecoin out of the hope that doing so would allow them to withdraw their funds.

A Thread Titled “If You Want Withdraw Convert All in Litecoin” Has Generated Considerable Attention on Reddit

Bitfinex Withdrawal Difficulties May Have Contributed to Litecoin SpikeThe post states “I was two days trying to withdraw btc and iota and eth without lucky, then I read some user write convert all in ltc. So I did it and withdraw ~30ltc in 10 minutes!!.” The comments section of the thread indicates that many of Bitfinex’s clients reading the post quickly moved to convert their holdings into Litecoin, with one Redditor stating “Agree… Did this too.. All moved […] within an hour.” Another trader states “yes, this worked for me. Thanks for the great advice!! Withdraw in less than 5min.”

Bitfinex has claimed that the delays in withdrawal are a consequence of a sustained malicious attack that has involved the exchange getting spammed by a large volume of extremely small withdrawals and deposits. The exchange has since issued a post suggesting that it will not be processing cryptocurrency withdrawals less than $250 USD until a “request mechanism [is] put in place [in] 1-2 weeks.”

Do you think that Bitfinex’s withdrawal difficulties may have contributed to the recent Litecoin boom? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Bitfinex


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Australian Bitcoin Exchanges Must Now Register at Financial Intelligence Agency

Australian Bitcoin Exchanges Must Now Register at Financial Intelligence Agency

Whether or not bitcoin users think it is a good idea, governments around the world are determined to try and regulate how citizens trade their cryptocurrency. Due to this, Australian bitcoin exchanges’ clients should now expect their service providers to focus more on compliance with bureaucracy.   

Also read: South Korean Financial Regulators Ban Bitcoin Futures Trading

Australian Bitcoin Exchanges Must Now Register at Financial Intelligence AgencyAustralian lawmakers have ratified new legislation pertaining to the operation of bitcoin exchanges in the land down under. The “Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017” is meant to update Australia’s regulatory financial framework for the cryptocurrency age.

First introduced back in August by the Senate, the bill gives the Australian Transaction Reports and Analysis Centre (Austrac) the power to officially regulate bitcoin trading venues. From now on, all the exchanges in the country must be registered with the government’s financial intelligence agency to operate legally.

Offering cryptocurrency exchange services without being registered with Austrac is now considered a criminal offense. Failure to comply with the new law carries a minimum penalty of two years in prison and AUD 105,000. The maximum penalty for not registering with the agency can reach seven years in prison and AUD 420,000 for individuals as well as an AUD 2.1 million fine for a company.

Ramification of Austrac Registration

Australian Bitcoin Exchanges Must Now Register at Financial Intelligence AgencyBy having to register with the Australian government’s financial intelligence agency bitcoin exchanges will have to follow regulations similar to banks and other fiat cash businesses.

While one might argue that this move gives bitcoin exchanges the same standing as established financial institutions and thus elevates the status of cryptocurrency trading in Australia, it doesn’t seem to offer any new protection or security for clients. At the same time this can force businesses to shift their focus from offering the best service to making sure they follow the government’s dictates.

Exchanges now need to show they are actively pursuing plans to find and resolve any money laundering and terrorism financing risks. According to the AML/KYC practices in Australia, service operators must verify the identities of their customers. They need to report all suspicious activity, international transactions, and transactions that exceed AUD 10,000, to Austrac. They are also required to keep some records of transactions and customer identification for a seven years period.

Are the new regulations good or bad for Australian bitcoin users? Tell us what you think in the comments section below.


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Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

 

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Andreas M. Antonopoulos Shares Insights on Bitcoin CME Futures

Andreas M. Antonopoulos Shares Insights on Bitcoin CME Futures

There has been much speculation on the effect CME and CBOE bitcoin futures will have on bitcoin. Some fear bitcoin futures will give institutional investors the ability to short bitcoin at volumes the community has never seen before and will cause a massive price crash. Others think that the massive inflow of institutional money will push bitcoin prices to heights beyond the community’s imagination. In response, Andreas has come forward with a presentation on how bitcoin prices are determined on CME futures.

Also read: CFTC Regulator: Bitcoin Futures are a “Unique Animal” Capable of Price Manipulation

The Andreas Connection

Andreas Antonopoulos is a Greek-British, bitcoin thought leader who has been an early advocate of bitcoin since 2012. Around 9 months ago, Andreas took a position on the oversight board of the Chicago Mercantile Excange & Chicago Board of Trade (The CME Group Inc.) for bitcoin reference rates. The CME Group is an American financial market company operating an options and futures exchange that is listing bitcoin futures on December 18th. Andreas’s role in the oversight committee is to oversee which bitcoin exchanges are used to pull pricing data that will be used to determine the current bitcoin price on the CME futures.

The Process Bitcoin Goes Through to List on CME Futures

Andreas explains that prior to listing bitcoin on CME futures, two kinds of bitcoin reference rates (price) need to be formed: The bitcoin Reference Real Time Index, which is a spot price that updates every 30 seconds and is published on traditional platforms like Bloomberg and Reuters. The other is a Point Price or moving average price that is measured every day at 2pm Central time. The point price is considered the price of bitcoin for the day.

Both bitcoin Reference Real Time Index and the bitcoin Point Price are used to underpin the legal contracts that are part of the futures exchange, or to resolve disputes between two parties who disagree on the price of bitcoin at the time the agreement was made.

Inner Workings of bitcoin CME Futures

Andreas explained the two different criteria CME uses to determine whether a bitcoin exchange is eligible as a source for bitcoin pricing data. First, the bitcoin exchange has to publish a price consistently or it will nor be a reliable source of data. The bitcoin exchange also needs to have trading fees and cannot be a zero trading fee platform. This is important because platforms with no trading fees are susceptible to trading bots that can create fake volume.

Also, CME futures are a cash settled market, that means nobody holds actual bitcoin. For the CME to operate bitcoin futures, every short position has to have a corresponding long position. Both positions have to be capitalized in US dollars against the CME. The CME customers need to have collateral deposited and audited on a daily basis. This entitles CME customers to take long and short positions that do not go over collateral.

Lastly, the CME also has circuit breakers that halt trading if bitcoin prices drop or rise by more than 7%.

Who Will Short bitcoin

Traders or investment bankers will short bitcoin at great risk and so this is an unlikely scenario. Instead the most active short participants will be bitcoin miners. This is because miners have the ability to short bitcoin with the least amount of risk. Miners hold the underlying asset (bitcoin) and can make good on short bets without loss.

Andreas M. Antonopoulos Shares Insights on Bitcoin CME Futures
Miners can hedge their positions by taking a calculated bitcoin short position

A miner operating a bitcoin mining business has to pay electricity prices month to month without knowing what the price of bitcoin will be. If the price collapses suddenly, miners may have to close shop because of a lack of cash flow. Andreas foresees miners taking 10% of their bitcoin to put in a short position. If bitcoin collapses in price that month, it gives miners the ability to recover losses from price drops to pay for their running costs.

Even if bitcoin prices increase tremendously, miners who short will lose on their 10% short position but gain on their 90%. Thus, miners stand to gain the most from calculated short positions and are the most likely to participate in shorting bitcoin futures to hedge their risk.

Conclusion

Currently, bitcoin is volatile because traders cannot take a short position against it. The introduction of CME futures will bring massive increases in volume and the liquidity will lead to an overall reduction of volatility for the price of bitcoin.

How do you think CME futures will affect bitcoin? Do you think Andreas is right? Are you glad there will be less volatility in bitcoin? Let us know in the comments below.


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PR: Insurance About to Make a Big Jump into Crypto World: Insurepal ICO Starts on January 16

Insurepal ICO

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

InsurePal is challenging the $7 trillion global insurance market of today with a distributed, self-adjusting insurance platform. Harnessing the power of blockchain, they introduce a completely new model of risk selection, guided by the science of social proof. In other words, their network uses peer-to-peer endorsements to improve segmentation, lower premium costs and offer incentives to their users.

Insurance is one of the sectors that are not usually a part of blockchain discussion. One of the reasons is the industry is so tightly regulated that not many businesses can compete, as they have to undergo severe legal and financial procedures to prove their models` sustainability. The other is its organizational structure, as it is an industry controlled by big corporations with a rigid structure, meaning the entry point is extremely high. And the later, but certainly not the least, is the challenge of how to effectively apply blockchain in insurance. It is not easy to come up with a disruptive new insurance structure that can work as an agile self-adjusting platform, store information the ledger, offer cheaper insurance and attract masses, all at the same time.

However, InsurePal is set to do everything mentioned above. The distributed insurance platform has reinvented the science of social proof to work similarly as a third-party deductible in banking. This means that the policyholder will be able to lower the price of his premium with the help of his trusted contacts. In other words, his endorsers also accept financial responsibility in case the policyholder makes at false-claim. The simplest application of social proof would be in motor insurance, as explained in their whitepaper: John`s best friend Mary knows his driving habits and therefore endorses him. For that, she gets an immediate bonus, whilst John ends up with a cheaper premium. If nothing goes wrong, that is pretty much it. However, if John files an at-fault claim, Mary is the one held liable.

Therefore, social proof is peer pressure put to good use: it motivates beneficiary behavioral patterns and changes groups, and even society for better without aggressively invading privacy. And, blockchain`s immutable record is an impeccable way to store the social proof into the ledger. As such, it can serve as an important sign of one`s diligence and can be used to gain benefits across various insurances and even across different industries.

One of the InsurePal`s most exciting use cases is definitely the insurance of blockchain business transactions. The team is convinced this type of insurance will bring in the missing trust among all the stakeholders and serve as an additional boost to the rising decentralized economy. Certainly, the platform also promises many interesting features to incentivize both, the engaged crypto users and those who have not yet meet with the world of crypto.

InsurePal team is 30 members big, comprised of experienced and renown insurance professionals and blockchain, IT and communications experts with a track record of successful projects; a PoC published on GitHub and, what is rare but very promising, an innovative solution that was filed for patent protection in US and worldwide. For more information, please visit their webpage or read their whitepaper and mark January 16 as the starting day of their crowdsale.

Contact Email Address
melita.gulja@netis.si
Supporting Link
https://insurepal.io/

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not 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 the press release.

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Markets Update: Bitcoin Bounces to $15,000 Amid Run-Up to Cboe Futures Launch

https://news.bitcoin.com/heres-what-you-should-know-about-cboes-bitcoin-futures-launch/

The bitcoin markets are experiencing significant price volatility leading up to the launch of Cboe’s futures markets, as many traders place their bets on how the markets will react to the highly anticipated event.

Also Read: Here’s What You Should Know About Cboe’s Bitcoin Futures Launch

With the Launch of Cboe’s Bitcoin Futures Markets Hours Away, Bitcoin’s Price is Making Significant Moves

After establishing a new all-time high on the 8th of December, the bitcoin markets retraced heavily before rallying up to the $15,000 USD area.

Markets Update: Bitcoin Bounces to $15,000 Amid Run-Up to CBOE Futures Launch

The considerable volatility experienced by the markets has led to a dramatic spread in prices across exchanges. On Bitstamp, the BTC markets produced a high of $16,667 on the 8th of December, before bouncing off the $12,800 area this morning. On Bitfinex, a new record high of $17,171 was reached before the markets established support at $13,000. Coinbase produced the greatest price disparity, setting a new all-time high of $19,340 before finding a floor at the $13,500 area. All major markets produced a two-day retrace of more than 20%, with BTC presently trading at the $15,000 area after gaining approximately $2,000 in several hours.

Expectations as to the Influence That Futures Markets Will Have on Bitcoin’s Price and Market Dynamics Vary

Markets Update: Bitcoin Bounces to $15,000 Amid Run-Up to CBOE Futures LaunchSome analysts have described the launch of futures markets backed by major regulated financial institutions such as Cboe and CME as providing greater legitimacy to the BTC markets, in addition to exposing bitcoin to greater liquidity.

Other traders have expressed skepticism that veteran Wall Street traders will be reluctant to pump BTC with the markets having already produced gains of over 1,500% this year, predicting that the launch of futures markets will see many investors open short positions.

Some traders are predicting that the futures markets will struggle to exert a significant influence on bitcoin price discovery, citing that Cboe’s XBT contract is being “priced off a single auction at 4.pm.” CME’s contract, on the other hand, will be priced according to the company’s Bitcoin Reference Rate – which derives from Bitstamp, Gdax, itBit, and Kraken.

Both companies’ contracts will be cash settled and thus will exert no direct pressure on the supply and demand dynamics of the bitcoin markets. Another factor likely to limit the influence of the futures markets on bitcoin price discovery is that CME and Cboe’s markets will adhere to standardized opening hours – potentially limiting the influence that said markets may be able to have on the 24/7 bitcoin markets.

Many Altcoin Markets Experienced Considerable Volatility After Setting New All-Time Highs This Week

Litecoin has established a new-all time high of approximately $155, after two days of extremely bullish action following LTC’s break above the $100 USD area. As of this writing, the price of LTC is approximately $140.

Stellar has also had a high performing week, breaking above its preceding all-time high of roughly $0.075 by more than 300% to establish a new record of approximately $0.25 on the 6th of December. Stellar has since undergone a significant retracement before consolidating above $0.10 – with prices currently trading for approximately $0.12.

Ethereum has consolidated within a 20% range over the course of the preceding week, with the markets appearing to have established support above the previous all-time high of $400. Following the breakout last month, ETH has failed to consolidate above $500. ETH is currently trading for $440.

Monero established a new all-time high of approximately $280 on the 5th of December, following a strong rally above the $230 resistance area of XMR’s preceding record high. Since establishing a local top, Monero has consolidated above the $225 area – with current prices trading at approximately $250.

Augur set a new all-time high on 3rd of December, spiking up to test $60 for the first time. The spike was short-lived, however, with prices quickly retracing by almost 60% to below $20 within six days. REP is currently trading for approximately just shy of $30.

Following Bitcoin Cash’s dramatic spike that established a new all-time high of approximately $2,800 early in November, BCH has consolidated with a more than 30% range – bouncing between support at approximately $1,100 and the $1,700 resistance area. At the time of writing, Bitcoin Cash is trading for roughly $1320.

How do you think the markets will respond to the launch of Cboe’s futures contracts? Share your thoughts in the comments section below!


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Here’s What You Should Know About Cboe’s Bitcoin Futures Launch

Here’s What You Should Know About Cboe’s Bitcoin Futures Launch

The largest U.S. options provider, the Chicago Board Options Exchange (Cboe), is set to launch its bitcoin-based futures products today at 6 pm EDT. Currently, investors and speculators are interested in what will happen when the derivatives products launch, because at the moment there are no open standards for this type of cryptocurrency-based investment vehicle.

Also read: Chicago Options Exchange Getting the Bitcoin Bug: “We Believe” says President

Big Time Options Markets Are About to Shoot the Dice With Bitcoin

Here’s What You Should Know About Cboe’s Bitcoin Futures LaunchCboe is planning to launch its bitcoin derivatives product. It’ll be sold under the ticker XBT. Many people are wondering how this will impact current spot markets and the bitcoin economy as a whole. So far the price has spiked quite a bit, and many speculators believe the favorable price is due to the upcoming futures markets. No one can really predict right now how these derivatives markets will affect spot markets, but we can tell you what to expect this week.

What You Should Know About Cboe’s Futures  

Futures will be available for trading starting at 6 pm EDT on Sunday, December 10. Investors will be able to trade from 9:30 am to 4:15 pm EDT, and trading is also available during extended hours. There are no bitcoins involved with contracts as all of the trading is cash-settled in USD at settlement times. However, contract sizes are equal to ‘one bitcoin’ based on the USD price of BTC on the Gemini exchange. Futures investors can purchase a minimum of $10 per contract which are tethered to specific time periods.

“The contract multiplier will be 1 so if a contract is trading at parity with bitcoin its worth will be based on current pricing — The minimum tick for a directional, non-spread trade is 10 points or $10, and a spread trade will have a much smaller tick of 0.01 bitcoin or $0.01,” revealed Cboe’s CFA Russell Rhoads this past November.

Here’s What You Should Know About Cboe’s Bitcoin Futures Launch

In Order to Purchase Bitcoin-Based Futures, You Need to Contact a Brokerage Firm

Here’s What You Should Know About Cboe’s Bitcoin Futures Launch
Bitcoin markets are unlike any stock or commodity markets and may shock mainstream investors and Wall Street types.

Cboe’s bitcoin futures listings will be set in three serial months between January through March, with an expiry during the two business days before the third Friday of the closing month. Cboe may also list trading for weekly contracts and quarterly contracts as well. The cut-off time for all orders, quotes, cancellations and order modifications for XBT futures will end at 3:14 pm EDT.

Currently, there are no price limits, but there can be timeouts during trading sessions. This means during extremely volatile times Cboe’s bitcoin future markets can be halted. According to Cboe’s rules, individuals cannot own or have control of more than 5,000 contracts, net long or net short, in XBT. Also, investors cannot hold more than 1,000 contracts net long or short with existing XBT contracts set to expire.     

Individuals interested in investing in Cboe’s bitcoin futures products will be charged a basic retail rate of $1 per contract, but for the rest of December, the firm is waiving fees. People and organizations will have to contact their brokerage firm to purchase XBT contracts. However, at the moment many financial institutions are not quite ready to take on the task of selling these futures. Institutional clients can purchase XBT from more prominent brokerage firms like Goldman Sachs and JP Morgan. However, these companies will only offer bitcoin futures to a particular group of customers at the moment.

Will Futures be Positive, Negative, or Tame the Bitcoin Beast?

As we mentioned above, nobody knows what these futures markets will do to pre-existing spot market prices. People assume it will be positive, and many believe it will be negative, and others believe it will be just enough to ‘tame’ bitcoin’s volatile price.

How do you think Cboe’s futures markets will affect the spot prices of bitcoin? Do you see this as a positive step for the decentralized currency or a negative one? Let us know in the comments below.


Images via Pixabay, and Cboe. 


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