XBT: $8350 | Market Cap: $154 B | Bitcoin Dominance: 70.81%
Hashrate: 99.42 EH/s | Difficulty: 13.01 T
Halvening: 215 days away, 12.5 —> 6.25 BTC block reward
Fiat Market Cap: #37 | Global Debt: $59.845 T | US Debt: $22.819 T
Sources: Messari , BTC , BitcoinBlockHalf , FiatMarketCap , Economist , USDebtClock
Highlight: Bakkt To The Future(s)
Fundstrat’s Thomas Lee thinks Bakkt’s physically-delivered futures volumes represent a proxy for institutional demand for Bitcoin. Firms like Galaxy Digital and XBTO are proving this to be true, having just conducted a block trade on Bakkt earlier this week.
But The Block’s Director of Research, Larry Cermak, paints how despite its new daily volume high of 224 BTC, Bakkt’s total volume since its launch nearly three weeks ago is still under $9 M - chump change.
For reference:
Bakkt’s physically-delivered futures first day volumes: 72 BTC
CME’s cash-settled futures first day volumes: 5298 BTC
But even Bakkt and CME’s 24 hr Bitcoin futures volumes pale in comparison to some of the bigger players in the space:
(Source: Digital Asset Research, FTX)
You may be wondering why futures and other derivatives are so popular, and how their volumes nearly 3x those of retail spot exchanges. “In a nutshell, futures are less exposed to market volatility and also allow bears to bet against the cryptocurrency market” - BTSE.
So we’re beginning to see an influx of derivatives offerings flooding the market to better serve sophisticated trading strategies. For example, we’ve seen seed-stage startup Skew experiment with P2P Bitcoin-settled S&P500 derivatives this past week.
But derivatives can quickly get out of hand. Deribit covers the recent May 17, 2019 flash crash and how “a rapid market selling of $30 million of BTC on one venue triggered $230 million of liquidations on another.” Events like these have prompted the Deribit team to propose some defenses, including incremental liquidation (an industry standard in traditional financial markets), more robust price indices, circuit breakers, and more.
Bitcoin / Lightning Tech
(1) ~2 years since its debut, SegWit-spending now makes up over 50% of Bitcoin transactions. SegWit has officially flippened, having seen rapid growth in September.
(2) “Bitcoin Core contributor Jeremy Rubin believes he has figured out how to reliably smooth out network congestion, increasing Bitcoin’s throughput during peak hours.” His proposal? OP_SECURETHEBAG.
(3) Chaincode Labs posted new content on their Bitcoin Curriculum and encourages the community to contribute to the repository. If you haven’t already, I highly recommend going through it.
Bitcoin Companies / Projects
Wallets
(1) Acinq, the startup behind the Eclair Lightning implementation, announced their recent $8 M series A round.
Merchants
(2) Unicef announced their cryptocurrency fund, where they’ll be able to receive, hold and disburse donations of cryptocurrencies ether and bitcoin.
(3) Traki, one of Venezuelan’s largest retail chains, installed a Bitcoin ATM in one of its stores.
(4) French crypto startup Keplerk has relaunched its service to accept Bitcoin (BTC) payments in over 5,200 tobacco shops.
Other
(5) The Casa team just announced a new version of their flagship node hardware device, having shipped more than 2000 units to buyers in 65 countries over the past year.
(6) Coinbase Pro announced their mobile app for you sickos who trade 24/7.
(7) Grayscale is an asset management firm that offers trusts for investors to get exposure to cryptocurrencies in the form of traditional securities. They recently announced how investment into their trusts recently doubled QoQ, up to $85 M, 84% of which came from institutions.
(8) BlockFi and Coinmine have partnered up. “This partnership provides BlockFi clients more opportunities to earn crypto through mining, while simultaneously enabling Coinmine clients to do more with the crypto they’re currently mining.”
(9) BitMain announced their new Antminer 17 series.
Bitcoin Talks / Theses
(1) Hasu, James Prestwich, and Brandon Curtis publish: A model for Bitcoin’s security and the declining block subsidy. “The block subsidy schedule, which declines as part of Bitcoin’s fixed emission schedule, will lead to lower predictable income for miners. If a robust blockspace market doesn’t develop, we explain why a decline in block rewards poses a substantial risk for the future.”
(2) Greg Maxwell responds to the question: "Why not hard-fork Bitcoin to make it less vulnerable to 51% attacks?"
(3) VanEck makes the investment case for Bitcoin, citing low correlation to traditional assets, asymmetric returns, the stock-to-flow scarcity model, and more.
Bitcoin Regulations
(1) The heads of three U.S. financial regulators (CFTC, FinCEN, SEC) warned the cryptocurrency industry to abide by banking laws (Bank Secrecy Act (BSA)) in a joint statement published Friday.
(2) The IRS has drafted its new 1040 tax form, asking taxpayers if “at any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency”.
(3) But wait - there’s more! The IRS also introduced new cryptocurrency guidance. Accounting standards and fair market value have been clarified, but…
“The new guidance suggests that a taxpayer will have taxable income the moment that new coins from a hard fork are recorded on the newly forked blockchain and the taxpayer has “dominion and control over the cryptocurrency so that [he/she] can transfer, sell, exchange, or otherwise dispose of the cryptocurrency.” That means that anyone who forks a blockchain can, without warning or notice, create new tax obligations for every holder of coins on the old chain.”
(5) Bitwise’s Bitcoin ETF has been denied by the SEC. Concerns circled around market manipulation and the lack of cooperation on monitoring markets for suspicious and illegal trading behavior. Bitwise acknowledges that the journey to approval for novel ETPs is a multi-year process and has documented some learnings here.
(6) “A class action lawsuit was filed today against Bitfinex and Tether by the lawyers who successfully sued Craig Wright. Bitfinex and Tether’s liability to the putative class allegedly surpasses $1.4 trillion U.S. dollars”.
(7) In another Bitfinex / Tether case - “A New York judge has rejected a New York Attorney General’s office request to have Bitfinex and Tether collect all documents pertaining to an alleged $850 million cover-up and $900 million line of credit.”
(8) “The World Federation of Exchanges (WFE), which has over 70 members including giants such as CME Group, Nasdaq and Intercontinental Exchange (ICE), has urged the U.K.’s finance watchdog not to ban cryptocurrency derivatives for retail investors.”
(9) Libra is in a world of hurt: PayPal, Ebay, Stripe, and Mastercard have abandoned the effort. Mark Zuckerberg will be testifying before Congress over Libra October 23rd.
Bitcoin Calendar
(1) When Will Institutional Investors Join the Bitcoin Party Conference Call | Oct 14
(2) Lightning Conference | Berlin | Oct 19 - 20
(3) Mark Zuckerberg Libra Congress | Oct 23
(4) CME 3mo Expiration | Oct 25
(5) Square Earnings Call | Nov 6
(6) Consensus: Invest 2019 | Nov 12
(7) The Capital | Singapore | Nov 12 - 13
(8) CME 6mo Expiration | Dec 27
(9) Wilshire Phoenix Bitcoin ETF Decision | Dec 28
Tweet at me if I’ve missed anything or if you’ve got feedback, questions, and comments.
This is not financial advice. Do your own research.
Newsletter #1 was published on 20190621. Stats:
XBT = ~$10,200
Market Cap = ~$180 B
Dominance = ~61.6%
Hashrate = ~60 EH/s
Difficulty = ~7.93 T