Arthur Hayes, co-founder and CEO of the BitMEX cryptocurrency derivatives exchange, does not exclude that in the foreseeable future, short-term bitcoin bonds may appear on the platform. The idea itself, however, is not fully worked out and it has yet to bring to mind.
This assumption was made by Hayes in a conversation with a cryptanalyst and trader Luke Martin as part of the Venture Coinist podcast published on Friday, April 12.
🚨 Fresh episode with @CryptoHayes is out now 🚨
-Future products and plans
-Trader specific topics like upgrades, trading experience, and more
-BTC outlook & 2019 price target
Listen: https://t.co/qgq4TV9uDF pic.twitter.com/XdIcBKQzXv
– Luke Martin (@VentureCoinist) April 12, 2019
“One of the ideas that I have been studying, while very preliminary, is the possibility of native income generation for Bitcoin holders. Now, if I have Bitcoins and I want to get some kind of income from them, it is extremely difficult. I owe it to someone in an insecure way to lend, while the percentage of no return is very high, ”said Hayes.
One of the foundations of fixed-income markets in the traditional space, the head of BitMEX notes, is that large corporations, which everyone knows and trust, issue commercial short-term securities and, as a rule, receive US dollars for the financial needs of their companies. From an economic and financial point of view, it is more profitable for them to borrow money, rather than use retained earnings.
“The same should happen with cryptocurrencies. I want to create a future in which major exchanges and miners issue short-term bitcoin bonds for the ecosystem. Suppose you want to buy 30-day paper. Why not buy a 30-day BitMEX zero-coupon bond, which gives a certain interest rate that reflects the definition of our credit risk market? ”, Says Arthur Hayes.
According to him, other large companies like Coinbase, Kraken or Bitmain can use the same mechanisms. At the same time, Arthur Hayes is convinced that borrowers are unlikely to want to default the ecosystem and in order to maintain their reputation they will strive to pay for such obligations.
Thus, he says, an almost risk-free percentage curve for Bitcoin is formed, however, there may be more risky borrowers, and then this is the business of companies to choose from having offers.
“Let's say there is a certain speculative project that wants to create something, they need 100 Bitcoins and they pay 20% per annum. It suits me, I agree to that, ” Hayes gives an example.
Such a mechanism, in his opinion, will help create a credit curve for Bitcoin, and people will be able to lend cryptocurrency in a native way and create businesses. And since fiat currencies do not participate in this process, this will be an impetus to the widespread use of Bitcoin and will lead the industry to a new level.
“This is what I now think about, and I hope that in the coming months I will be able to write a kind of white paper or conduct a test transaction to see if there is any interest in this,” said the head of BitMEX.
As BlockchainJournal wrote earlier, during the Venture Coinist podcast, Arthur Hayes also expressed confidence that over the next few years, Bitcoin will reach $ 50,000.
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Analytics and prospects for the cryptocurrency market, Binance Research report The analytical division of the Binance exchange has prepared a report on the cycles in the market of cryptocurrency assets, the findings of which support the version that the minimum point of the current stage is already behind – the “bottom” is passed! According to the report Binance Research, when the price correlation Bitcoins and altkoinov the US dollar reaches a certain positive value, the trend Bitcoins tends to unfold or at least stop the movement in a previously set direction. Of course, investors felt the connection between the main virtual currency and all the others. A new study brought a scientific basis: at a certain time, the correlation value exceeded 0.94, which indicates an almost perfect correlation between the trend of Bitcoin and other cryptocurrencies . At the same time, the data show that the correlation value never fell below 0.8, so you can count on a single trend in the cryptocurrency sector. The periods of increased correlation in the crypto market are directly related to its focus on retail investors, analysts say. According to cryptofundresearch.com, 700 funds operating in the cryptocurrency market, as of January 2019, controlled less than $ 10 billion in assets. If we assume that all these assets were placed exclusively in Bitcoin, it turns out that such funds account for up to 14% of the capitalization of cryptocurrency. If we assume that the funds invest in Altcoins in accordance with their proportion in the market (about 50%), it turns out that such funds account for less than 7% of Bitcoin's capitalization. This value is only the thirteenth part of institutional participation in the US stock market and is as close as possible to the Chinese market, where in 2017 retail investors accounted for 99.8% of accounts, more than 40% of capitalization and more than 80% of trading volume. Another similarity between the cryptocurrency market and the Chinese stock market lies in the high turnover of funds that is characteristic of less professional markets.
“Crypto investors are probably more inclined to respond to news and information and hold their positions for a shorter time ,” writes Binance Research. “As a rule, non-professional investors tend to become overly confident or overly pessimistic, reacting to trends in the market, which leads to an increase in the volume of transactions and volatility.”Another characteristic feature of the cryptocurrency market is “hodling”, when retail investors hold an asset at the stage of decline, but quickly become more active when the course starts to go up. Thus, the crypto-market is distinguished by the irrationality of participants who assess the situation overly positively and negatively, which in turn leads to the formation of bubbles or an unreasonably deep drop and is reflected in the correlation graph of digital asset rates. According to Binance Research, this was the case in 2018, when market sentiment reached a maximum point, so it can be now, with the difference that the reversal in the current case goes up. Publication date 14/04/2019 Share this material on social networks and leave your opinion in the comments below.
Bithumb Cryptocurrency Exchange intends to enter the markets of the USA and Japan
Bithumb, one of the largest Bitcoin exchanges in South Korea, in the foreseeable future, may begin to offer services to residents of the United States and Japan. About this in an interview with Cointelegraph said BC Kim, CEO of the Blockchain Exchange Alliance (BXA), which owns the controlling package in Bithumb. According to him, the BXA strategy consists in the so-called reverse merger, involving the purchase of a company whose shares are already […]
Bithumb, one of the largest Bitcoin exchanges in South Korea, in the foreseeable future, may begin to offer services to residents of the United States and Japan. About this in an interview with Cointelegraph said BC Kim, CEO of the Blockchain Exchange Alliance (BXA), which owns the controlling package in Bithumb.
According to him, the BXA strategy is the so-called reverse merger, involving the purchase of a company whose shares are already being traded on one of the major exchanges. Among those, Kim names the Nasdaq and the New York Stock Exchange (NYSE).
Such a path may be faster than a traditional IPO, and will also help to significantly reduce the cost of listing on the stock exchange, which can reach $ 6 million.
As Kim says, BXA has already applied for legal support in the United States, and a lawyer from an unnamed firm said that the current regulatory environment allows the company to implement the stated plan.
BXA is also looking for partners in Japan, where it wants to create a joint venture to launch a officially licensed cryptocurrency exchange.
In addition, BC Kim said that he could potentially increase the share of BXA in Bithumb by buying up to 70% of the shares of BTC Holdings, the current operator Bithumb.
Additionally, he touched on the issue of the BXA's own token, which is already traded on the BitMax exchange, noting that its potential listing on Bithumb requires additional legal assessment.
Earlier this week, the Blockchain Exchange Alliance received funding in the amount of $ 200 million from the Japanese blockchain fund ST in the framework of the investment round of series A. As stated, investments will be directed to expanding the geography of Bithumb services, as well as adding new trading pairs to the site.
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The US government plans to increase spending on the blockchain technology 10 times.
Blockchain will become the main technology for the work of American civil and military government agencies.
The US federal government intends to increase spending on the blockchain 10 times – such data is contained in the report IDC Government Insights. According to the authors of the study, the amount of spending on this direction will increase to $ 123.5 million by the end of 2021, while in 2017 only funds worth $ 10.7 million were allocated.
It is also expected that spending on the implementation of distributed registry technology will also grow at the state and municipal level: in total, they will invest $ 48.2 million in this area over the same period, which is also about 10 times more than in 2017, when these goals were spent 4.4 million dollars.
If we talk about the structure of spending, then at least four times the costs of federal civilian authorities will increase, from less than 20 million to more than 80 million dollars over a specified period. The US Department of Defense will spend up to $ 40 million instead of $ 20 million, as in 2017.
As the head of the IDC research unit, Sean McCarthy, notes:
“We are confident that blockchain solutions will dominate in such issues of government functioning as state property management, identification of citizens at the border, as well as government procurement, when in the latter case everything goes from paper workflow to smart contracts .”
In the near future, much attention will be paid to investment in blockchains to improve logistics, including the deployment of new US military units in the EU countries. In addition, the distributed registry technology will continue its intensive distribution in financial transactions.
Publication date 20/04/2019
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Adamant Capital: Bitcoin has passed the bottom, the accumulation stage has started
According to analysts from the Adamant Capital cryptocurrency fund, the price of Bitcoin has really gone through the bottom, and the accumulation stage is now taking place – the first stage of the future bull market, when shrewd investors start preparing for the next rally. Moreover, say the authors of the report Tuur Demeester and Michael Leskrauvet, the general investor sentiment has changed from despair to hope. In support of this statement […]
According to analysts from the Adamant Capital cryptocurrency fund, the price of Bitcoin has really gone through the bottom, and the accumulation stage is now taking place – the first stage of the future bull market, when shrewd investors start preparing for the next rally.
Moreover, say the authors of the report Tuur Demeester and Michael Leskrauvet, the general investor sentiment has changed from despair to hope. In support of this statement, the researchers give a chart of the ups and downs of the Bitcoin price in combination with unrealized profits and unrealized losses. This criterion is based on the cost of each bitcoin, when it last moved (presumably, at the moments of buying / selling), accumulating into the “realized capitalization”. This indicator was then subtracted from the actual market capitalization of the cryptocurrency, as a result of which unrealized gains / losses were calculated.
Researchers are also convinced that at the moment Bitcoin is undervalued. The so-called “weak hands”, they said, left the market in November 2018, and this surrender laid the foundation for the next market cycle.
From this point on, “unrealized losses doubled in a matter of weeks”, prompting expectations of a rapid market recovery, the report says. However, when in just one month the market lost 48%, these hopes quickly gave way to despair.
This is also confirmed by Google Trends data, according to which search queries for the phrase “buy bitcoin” fell below the similar indicators of March 2017. Negative moods also prevailed in social media – if initially many investors were convinced that Bitcoin would not fall below $ 6,000, the further development of the event in the markets only intensified general pessimism, often even turning into aggression. So, representatives of Adamant Capital say that they received many letters at this time with threats and insults.
The report also describes in detail how the November capitulation changed the landscape of long-term and short-term holders of cryptocurrency.
So, in early 2018, many investors held onto their assets because of the so-called disposition effect — the tendency to hold an asset that has lost value, in the hope of selling it at a higher price. The November fall in prices, however, was a shock for many of them. For example, in the period from November 14 to 16, 2018, more old Bitcoins were sold than on February 23 of the same year, when the first cryptocurrency per day fell in price by almost $ 900.
This conclusion is similar to the analysis of unspent transactions Delphi Digital, published in January 2019, which also stated that Bitcoin is in the accumulation phase and that the bottom will be covered in the first quarter of 2019.
Be that as it may, Adamant researchers believe that the situation “improved markedly by the beginning of 2019,” and more and more investors began to hold their positions again. For example, on April 1, the number of long positions on Bitcoin futures from CME Group significantly increased.
The authors of the report also draw parallels with the previous market cycles, which, according to them, reinforce the thesis that we have again returned to the situation when we can speak about the undervalued bitcoin.
Another argument from researchers is market volatility. At the time of the publication of the report, the 60-day level of Bitcoin volatility was at a level below 5%, which has not been the case since 2016. According to Adamant, this reinforces the hypothesis that retail investors for the most part have left the market, and now long-term investors dominate there.
When is the moon?
The researchers emphasize that their findings do not mean that Bitcoin can not fall again to the values of November last year or even lower. Nevertheless, they expect that until the end of the accumulation stage and the start of a new rally, the cryptocurrency will trade in the corridor between $ 3,000 and $ 6,500.
Among the factors that can lead to lower prices are, for example, the possibility of a new major hacking of a large stock exchange, as was the case with Mt. Gox. Macroeconomic factors can also play a role, although in the long term, according to the report's authors, Bitcoin will be a safe haven for investors. Other risks include withdrawing from the market of miners (although this will be offset by increasing complexity ), regulatory threats, the ongoing civilian rehabilitation process of Mt. Gox , as well as new controversial hard forks.
When it is time to wait for a new bull market, the researchers do not say, but point to certain indicators that can help determine the accumulation phase: higher price minima caused by the fact that weak hands start selling during new rallies, as well as strong hands that do not buy Only these coins, but also buying Bitcoins during the price reduction, thus preventing them from falling even lower.
In addition, researchers draw attention to technical innovations that underpin their findings about the undervaluing of Bitcoin. These include the Lightning Network with its 45 percent monthly growth, as well as sidechains as an increasingly relevant and effective scaling solution. There is also a growing interest in cryptocurrency on the part of institutional investors.
Finally, the generation of millennials is likely to become another driver for the future rise in the price of Bitcoin. Having managed to catch the economic crisis of 2008, they are less likely to trust banks and governments, choosing alternatives such as Bitcoin.
“Basing our conclusions on the 10-year development of infrastructure, we believe that everything is ready for the truly five-year acceptance of [Bitcoin] to happen over the next five years. According to our estimates, during this period Bitcoin will become a more widely recognized tool for hedging investment portfolios, will increasingly be viewed as a reserve asset, and will also significantly enhance its status as a payment network, ”conclude the report.
Earlier this month, his report, indicating that a deep correction in prices of Bitcoin and the vast majority of the remaining altcoins may be behind and the so-called “bottom” has indeed been passed, prepared by the research division of Binance.
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