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Data shows Bitcoin price drops days after BTC futures open interest hits $1B

There was a time when BitMEX derivatives exchange reigned sovereign over other exchanges, and the company effectively held a 50% market share until July 2019. For this reason, traders kept a close eye on every indicator connected to BitMEX, including its funding rate, open interest, and basis.Open interest measures the total number of contracts held by market participants. As the figure rises higher, so does the potential size of liquidations. On Aug. 2, a $1,400 crash happened as $1 billion in futures contracts were forcefully closed due to insufficient margins. Although there is no magic number, traders tend to get shaky as open interest nears $1 billion, causing a phenomenon some traders refer to as the BitMEX ghost. This became evident during the second half of 2019, when massive Bitcoin price crashes occurred on seven different instances when open interest tops $1 billion. The perceived risk associated with high open interest depends on how liquid the underlying asset is. During the third quarter of 2019, Bitcoin's regular volume on spot exchanges averaged $2.4 billion per day. Thus, a single contract totaling 42% of the Bitcoin volume seemed sizeable enough.Bitcoin price vs. BitMEX perpetual open interest, USD. Source: TradingViewAs the chart above depicts, there is little doubt that open interest near $1 billion coincided with relevant price crashes from July through September. Read the full article

Paul Tudor Jones Bitcoin fractal hints at possible explosive BTC rally

Based on the fractal, Bitcoin is in an early phase of a prolonged rally that could allow BTC to experience exponential growth in the longer term.Bitcoin versus gold price fractal. Source: BloombergBitcoin may be on the same trajectory as goldThere are two main reasons why Bitcoin could follow the macro trend gold saw from the 1970s. First, BTC has a fixed supply that cannot expand, which makes it an attractive hedge against inflation. Second, BTC has the same qualities of a safe-haven asset that gold has.In August 2020, the Winklevoss twins, billionaire Bitcoin investors behind the major U.S. cryptocurrency exchange Gemini, laid out a bull case for why BTC price could rally to $500,000.In the thesis, they identified the qualities of Bitcoin that make it a viable safe-haven asset. The Winklevoss specifically emphasized that BTC is not subject to any potential supply shocks, unlike gold. They wrote:“Supply. Bitcoin is not just a scarce commodity, it’s the only known commodity in the universe that has a deterministic and fixed supply. As a result, bitcoin is not subject to any of the potential positive supply shocks that gold (or any commodity for that matter) may face in the future.”Due to this characteristic of Bitcoin, investors continuously make the argument that BTC makes a better safe-haven asset than gold. This comparison between BTC and gold is what leads many to believe that Bitcoin is on a trajectory for long-term exponential growth.Su Read the full article

Pizza Hut to accept Bitcoin for pies in Venezuela

A famous U.S.-based pizza chain has begun accepting cryptocurrency payments in all its stores in Venezuela.According to a Nov. 27 tweet from crypto services firm CryptoBuyer, Pizza Hut stores in the South American nation now accept crypto as a form of payment for food and drinks. The move follows the crypto firm partnering with Mega Soft to drive adoption in Venezuela by facilitating crypto payments at more than 20,000 shops and businesses.“Pizza Hut nowadays cannot be detached from these technological advances and all those incorporating new approaches for daily necessities," said Richard ElKhouri, General Director for Venezuelan operations of the pizza chain, in an interview with local news outlet ElAxioma. “It is important that we accommodate young people, modern adults, and people technologically knowledgeable.”Using CryptoBuyer, customers can purchase pizza at the restaurant chain with Bitcoin (BTC), Litecoin (LTC), Dash (DASH), Binance Coin (BNB), Binance USD (BUSD), Ether (ETH), Tether (USDT), Dai (DAI), and its native token XPT. Pizza Hut has locations in the capital, Caracas, as well in the cities of Maracay, Maracaibo and Barquisimeto.Based in Panama, Cryptobuyer is a cryptocurrency merchant gateway startup that also runs Bitcoin ATMs across Central and South America. The firm has already opened popular companies for crypto payments, including U.S.-based Read the full article

Biden considering Gary Gensler for Deputy Treasury Secretary

With 55 days until his inauguration as President of the United States, Joe Biden is reportedly considering the former chairman of the Commodity Futures Trading Commission for a permanent position in his administration. According to a Nov. 25 report from CNBC, the president-elect is floating Gary Gensler for a position as Deputy Treasury Secretary starting in 2021. The report states that “people familiar with the matter” have mentioned Gensler as a likely candidate for the role. He would be working under former Federal Reserve Chair Janet Yellen, whom Biden is reportedly planning to nominate as Secretary of the Treasury.Yellen and Gensler have expressed significantly different views on digital assets and blockchain technology during their careers. Gensler is currently a senior advisor at the MIT Media Lab’s Digital Currency Initiative, which conducts research on blockchain and digital currency with a goal of facilitating development and adoption of the technology. However, Yellen has been critical of crypto in the past, calling Bitcoin "anything but useful" in the months following the 2017 bull run. Gensler served as chairman for the Commodity Futures Trading Commission, or CFTC, under President Barack Obama from 2009 until 2014, and is currently acting as a financial advisor on the Biden-Harris transition team. He was known as a stringent regulator during his time as CFTC head, overseeing reforms to the $400 trillion financial derivatives market.Advisors Read the full article

Bitcoin exodus: OKEx users move crypto off exchange as withdrawals resume

After a five-week-long suspension of all user withdrawals, cryptocurrency exchange OKEx resumed normal services at 8:00 am UTC on Nov. 26.Having announced the re-opening last week, OKEx then indicated it would be launching a compensation and rewards program to express its gratitude to customers for holding out during the disruption. These programs include commission rebate cards denominated in Tether (USDT), a one-time compensation payment based on users’ asset and transaction histories, and a doubling of the asset weight calculation for holders of the exchange’s native token, OKB.Despite these efforts, today’s data shows that the programs have not been enough to forestall users from withdrawing their funds, having apparently lost confidence in the exchange.While withdrawals have not been open for long, some telling initial data is emerging on social media transaction trackers. Mason Jang, the chief operating officer of Crypto Quant, tweeted:#OKEx stats - OKex BTC Reserve: 101,686 => 98,821 BTC- 2,822 BTC outflows has been occurred- 446 BTC moved to #Binance- 54 Accounts withdrew their $BTC Source: https://t.co/tAPwJdhpw4 pic.twitter.com/dkWOsQh8ZZ— Mason Jang (@mason_jang) November 26, 2020More data from CryptoQuant shows that “the first OKEx outflow after the withdrawal opening hit 2,822 BTC by the block time frame,” which is “the year-high in the block time frame”:10-day Bitcoin exchange outflow total for OKEx. Read the full article

Compound liquidator makes $4M as oracles post inflated Dai price

The crypto market suffered a powerful crash on Thursday morning UTC, which sent prices of major currencies like Bitcoin (BTC) and Ether (ETH) tumbling in excess of 10%.When traders rush for the exits, the price of stablecoins generally increase as the demand for stability rises. In today’s crash, however, the effect became particularly pronounced on Dai (DAI), which briefly traded for $1.3 between 7 and 8 AM UTC.Dai/USD price on Coinbase, courtesy of TradingViewMost notably, DAI traded at this inflated valuation only on Coinbase and Uniswap, while other exchanges including Kraken and Bitfinex seem to have maintained a relatively stable price.Dai/USD price on Bitfinex, courtesy of TradingViewCoinbase and Uniswap are the two exchanges used by Compound’s Open Price Feed oracle. The former acts as the baseline, while the latter is used as a sanity check and anchor. Nonetheless, it appears that Uniswap failed in its function and also posted a much higher price than normal.Compound’s liquidation this morning amounted to $89 million, of which about $52 million came from DAI, according to data from DuneAnalytics.One liquidation in particular is notable for its extremely large size of 46 million DAI repaid.As DeFi researcher Sam Priestley explained, this liquidation was performed on a leveraged COMP farmer, who used USD Coin (USDC) and DAI collateral to power recursive borrowing in the same currencies. Read the full article

Japanese firm Layer X Labs develops blockchain-based e-voting protocol

Japanese firm Layer X has announced the development of an electronic voting system based on a blockchain protocol as part of a wider “smart city” initiative being pursued by Tsukuba City.The Tokyo-based company said that the new system will meet the technical needs of electronic voting, including the prevention of double voting, accurate storage of voting content, voter confidentiality, and management of operation records.In addition, it will enable voters to check their own voting results, providing the cryptographic ability to verify that the recording and aggregation processes for the votes on the blockchain network was performed correctly.Layer X explained that, through its new system, it seeks to push for a shift towards electronic voting in local governments. It also indicated that it is working to strengthen efforts aimed at solving technical problems related to the digital transformation (DX) of various administrative services.Layer X also announced that it will join the Tsukuba City, Ibaraki Prefecture smart council, which aims to transform Tsukuba into a "smart city" and move it into the digital age.The Coronavirus pandemic has prompted many countries and local states to develop blockchain-based online voting options. Russia has already experimented with blockchain-based electronic voting and has also published the source code for the platform on GitHub.Likewise, Read the full article

As US election dust settles, crypto traders and analysts eye new administration

While some in the community continue to question the outcome of the US Presidential election, mainstream media outlets and the Associated Press have definitively called the race for former Vice President and current President-Elect Joe Biden. But with uncertainty out of the way, traders and analysts are now looking to determine what a Biden administration will mean for cryptocurrencies — and they appear to have come to a loose consensus that a President who says nothing about crypto is preferable to a president who actively disparages it. Qiao Wang, the lead at decentralized finance accelerator DeFi Alliance, cheered Trump’s loss, noting that the President had tweeted negatively about Bitcoin and Libra in the past: The fact that Trump and Mnuchin are hostile towards BTC makes a Trump a far inferior candidate. Full stop. However the senate part is debatable. You could argue that democrats are more likely to create inflation which is good for BTC.— Qiao Wang (@QwQiao) November 8, 2020Meanwhile, investor Mike Novogratz concurred that a Democratic administration would be good for crypto, saying that an ongoing stimulus program would bolster Bitcoin’s anti-inflationary narrative:Wore my lucky hat for Biden. Go $BTC. Go Biden. https://t.co/AwVxCsUAJm— Read the full article

Big mining move: Bitcoin’s hash power increases 42% in two days

The hash power of the Bitcoin (BTC) network has jumped by roughly 30% over the past 24 hours, which if sustained, suggestsg a major difficulty adjustment may soon be incoming.According to Coinwarz, Bitcoin's hash rate currently sits at 157.5 exahashes per second (EX/s) after briefly pushing above 160 EH/s. As of this writing, BTC hash power has increased by 42% in two days.Bitcoin hash rate 1-month chart: CoinwarzThe spike follows a sharp decline in hash power in late October, which many analysts attributed to the end of the rainy season in the Chinese mining hub of Sichuan. The province’s abundant and cheap hydroelectric power is estimated to attract around 80% of Chinese miners during the wet season. In December, CoinShares estimated that Sichuan accounted for 54% of global mining activity.Quantum Economics analyst Jason Deane speculated that the sudden increase in Bitcoin hash power could be a sign that many Chinese miners have completed their migration from Sichuan and restored operations in other local mining hubs such as Xinjian and Inner Mongolia.Whoa! big jump in #bitcoin hash rate over last 10 hours (+29.7% trough to peak) Large number of machines just came online somewhere, relocated Sichuan region miners possibly? pic.twitter.com/UKahgQ37Tm— Jason Deane (@JasonADeane) November 9, 2020The sudden spike in mining activity suggests the network is likely to produce another significant difficulty adjustment. A Read the full article

Report: Crypto crimes declined in 2020, but DeFi hacks are on the rise

Cryptocurrency-related crimes have slowed down in 2020, but some sectors within the crypto industry have become a new hotbed for criminal activity, a new report says.Citing major crypto analytics firm CipherTrace, Reuters reported on Nov. 10 that total losses from crypto thefts, hacks and fraud dropped from $4.4 billion in 2019 to $1.8 billion over the first 10 months of 2020.CipherTrace CEO Dave Jevans said that the general decline of criminal activity in the crypto industry is a result of increased security measures:“What we have seen is that exchanges and other cryptocurrency players have implemented more security procedures They have taken the guidance and implemented the procedures to secure their funds better. So you’re going to see less mass-scale hacks.”Despite a major decline in crypto crimes this year, CipherTrace reported a notable growth of hacking incidents in decentralized finance, or DeFi. While DeFi hacks were “virtually negligible” in 2019, they now account for 20% of crypto losses from thefts and hacks, CipherTrace analysts found. “The surge in DeFi was what ultimately attracted criminal hackers, resulting in the most hacks for the sector this year,” the report stated.Jevans said that the DeFi industry has also become a “haven for money launderers.” Since DeFi projects are permissionless by design, they often lack the security verification tools of centralized projects. Read the full article

Bitcoin whale clusters signal $14.9K is the crucial level for BTC to hold

New data from Whalemap suggests that in order to maintain bullish momentum Bitcoin price needs to hold above the $14,914 level.Whale clusters, like the bubbles shown on the chart below, form when high-net-worth investors purchase Bitcoin and do not move them. This indicates that whales accumulated BTC at that level and suggests that it will likely remain as a support area in the event of a correction.As such, in the near term, it is crucial for Bitcoin to remain above $14,914 for a prolonged period. It would signify consolidation under a multiyear resistance at $16,000 and stability above a major support level.Bitcoin whale clusters. Source: WhalemapWhat's keeping BTC price above $14,914?Throughout the past week, Bitcoin has seen unusual price action and been quite volatile in a broad range.From Nov. 6 to Nov. 9, BTC tested the $16,000 level twice and fell to as low as $14,350. This short-term volatility was likely connected a range of macro events, including the 'contested' U.S. election results. There have been a number of big risks in the market since early November. The election risk noticeably benefited Bitcoin as investors sought out safe-haven assets. Then, Pfizer’s vaccine breakthrough became an unexpected variable, causing Bitcoin and gold to plunge.Despite these uncertainties, Bitcoin has remained comfortably above $13,600, a level which Whalemap analysts pinpointed. Read the full article

Colombian Stock Exchange to use blockchain for OTC derivatives trading

The Colombian Stock Exchange announced it is joining the Consorcio Colibrí, a private initiative that promotes the adoption of blockchain technology within the finance industry.As Cointelegraph Español reported on Nov. 18, Consorcio Colibrí was formed by major financial institutions such as Bancolombia, BBVA, Santander Caceis Colombia, Deceval, Contrato Marco, Porvenir and Skandia, among others.Via a partnership with member firm Contrato Marco, the CSE will use the Colibrí platform's blockchain tech to improve operational efficiency in the over-the-counter derivatives market, which is currently time-consuming, expensive and difficult to reconcile with established manual procedures, according to the CSE.CSE president Juan Pablo Córdoba said that blockchain will streamline the clearing and settlement of operational guarantees.According to La República, the agreement includes a strategy for implementing initiatives from the Fintech Connection Program of CSE and Sophos Solutions to accelerate digital transformation in different lines of business.“The agreement reached with CSE will allow us to show the market that the future of financial infrastructures lies in blockchain technology,” said Juan Manuel López, executive director of the Contrato Marco.The Colombian fintech announced in October 2019 that it completed a successful pilot, which used distributed ledger technology to reduce operational risk among participants in the derivatives market.Source Read the full article

Big mining move: Bitcoin’s hash power increases 42% in two days

The hash power of the Bitcoin (BTC) network has jumped by roughly 30% over the past 24 hours, which if sustained, suggestsg a major difficulty adjustment may soon be incoming.According to Coinwarz, Bitcoin's hash rate currently sits at 157.5 exahashes per second (EX/s) after briefly pushing above 160 EH/s. As of this writing, BTC hash power has increased by 42% in two days.Bitcoin hash rate 1-month chart: CoinwarzThe spike follows a sharp decline in hash power in late October, which many analysts attributed to the end of the rainy season in the Chinese mining hub of Sichuan. The province’s abundant and cheap hydroelectric power is estimated to attract around 80% of Chinese miners during the wet season. In December, CoinShares estimated that Sichuan accounted for 54% of global mining activity.Quantum Economics analyst Jason Deane speculated that the sudden increase in Bitcoin hash power could be a sign that many Chinese miners have completed their migration from Sichuan and restored operations in other local mining hubs such as Xinjian and Inner Mongolia.Whoa! big jump in #bitcoin hash rate over last 10 hours (+29.7% trough to peak) Large number of machines just came online somewhere, relocated Sichuan region miners possibly? pic.twitter.com/UKahgQ37Tm— Jason Deane (@JasonADeane) November 9, 2020The sudden spike in mining activity suggests the network is likely to produce another significant difficulty adjustment. A Read the full article

Big mining move: Bitcoin’s hash power increases 42% in two days

The hash power of the Bitcoin (BTC) network has jumped by roughly 30% over the past 24 hours, which if sustained, suggestsg a major difficulty adjustment may soon be incoming.According to Coinwarz, Bitcoin's hash rate currently sits at 157.5 exahashes per second (EX/s) after briefly pushing above 160 EH/s. As of this writing, BTC hash power has increased by 42% in two days.Bitcoin hash rate 1-month chart: CoinwarzThe spike follows a sharp decline in hash power in late October, which many analysts attributed to the end of the rainy season in the Chinese mining hub of Sichuan. The province’s abundant and cheap hydroelectric power is estimated to attract around 80% of Chinese miners during the wet season. In December, CoinShares estimated that Sichuan accounted for 54% of global mining activity.Quantum Economics analyst Jason Deane speculated that the sudden increase in Bitcoin hash power could be a sign that many Chinese miners have completed their migration from Sichuan and restored operations in other local mining hubs such as Xinjian and Inner Mongolia.Whoa! big jump in #bitcoin hash rate over last 10 hours (+29.7% trough to peak) Large number of machines just came online somewhere, relocated Sichuan region miners possibly? pic.twitter.com/UKahgQ37Tm— Jason Deane (@JasonADeane) November 9, 2020The sudden spike in mining activity suggests the network is likely to produce another significant difficulty adjustment. A Read the full article

Brazilian gov't gets help from US Justice Department to seize $24M in crypto

According to a Wednesday filing, the U.S. Justice Department seized $24 million in virtual currency pursuant to an official request from the Brazilian government.The Department of Justice, or DoJ, said that the government of Brazil requested its assistance in connection to a crypto fraud scheme called “Operation Egypto.” Authorities in the South American nation reported that more than 10,000 Brazilians may have been defrauded from the scheme, in losses estimated at roughly $200 million.The department seized funds connected to Brazilian national Marcos Antonio Fagundes, one of the individuals allegedly involved in the case. According to information that Brazilian authorities provided to the DoJ, Fagundes is charged with the operation of a financial institution without legal authorization, fraudulent management of a financial institution, misappropriation of funds, money laundering, and securities law violations. He and his conspirators allegedly operated an unregistered financial institution to hold crypto assets he obtained from victims by making “false and inconsistent promises” about the way the funds were invested and exaggerated the rates of return.The funds were purportedly held on a U.S.-based crypto exchange. The DoJ said that a cryptocurrency firm holding the accounts complied with the seizure order, implying it was a company within its jurisdiction. Read the full article

Dormant crypto exchange Cobinhood to ax real-time customer support in 2021

Taiwan-based cryptocurrency exchange Cobinhood is making significant adjustments to its customer service practices in 2021.According to an official announcement on Nov. 1, Cobinhood will change its customer service policy to get rid of real-time interactions with clients.Starting Jan. 1, 2021, Cobinhood’s customer support will only communicate with clients through email. “During the whole process, no service specialist will be engaged for real-time conversation and everything will be done by email,” the announcement notes.As part of the upcoming customer service change, Cobinhood will also prohibit its customers from changing account passwords and the original registered email address. The exchange’s customer service will only reply to requests by sending emails to originally registered email addresses.The current status of Cobinhood’s operations remains unclear as earlier this year, the exchange announced it would be shutting down and auditing all account balances from Jan. 10 to Feb. 9. The exchange promised to resume operations on Feb. 10, but online data about the exchange shows that Cobinhood has been mostly inactive.Major crypto market data providers like CoinMarketCap and CoinGecko show no trading volume on Cobinhood. Furthermore, Cobinhood’s official Telegram channel and Twitter account have been silent since 2019. However, the Nov. 1 announcement claims that the exchange intends to “provide more effective service.” Read the full article

Record $2.9B Bitcoin options open interest follows BTC rally to $14,259

The open interest on Bitcoin (BTC) options contracts has reached a new all-time high at $2.9 billion. Interestingly, this feat happened only five days after the October expiry, which liquidated $400 million worth of options.Bitcoin options total open interest. Source: SkewOver the past six months, the options market has grown three-fold, causing investors to grow more curious about the potential impact upcoming expiries will have on Bitcoin price. Monthly BTC transaction volume (USD). Source: Digital Assets DataData from Cointelegraph and Digital Assets Data also show that monthly Bitcoin transaction volume and BTC futures volume has been on the rise since the end of October. BTC futures volume by exchange. Source: Digital Assets DataWhen analyzing options, the 25% delta skew is the single most relevant gauge. This indicator compares similar call (buy) and put (sell) options side-by-side. It will turn negative when the put options premium is higher than similar-risk call options. A negative skew translates to a higher cost of downside protection, indicating bullishness.The opposite holds when market makers are bearish, causing the 25% delta skew indicator to gain positive ground.Bitcoin 3-month options 25% delta skew. Source: SkewOscillations between -10% (slightly bullish) and +10% (slightly bearish) are considered normal. This hasn’t been the case since Oct. 19, when Bitcoin broke the $11,600 level and never looked back.This Read the full article

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