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Good morning, and welcome to First Mover. I'm Lyllah Ledesma here to take you through the latest in crypto markets, news and insights. In today’s newsletter: Price Point: Bitcoin briefly touched the important $25,000 mark earlier today but has dipped around $900 since. Galaxy Digital has abandoned its plan to buy BitGo, saying the crypto custody specialist had failed to provide financial statements by an end-of-July deadline. Market Moves: Options trading volume has risen on crypto exchanges, and even miners are using options strategies to muddle through the current, uncertain environment.
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Bitcoin (BTC) is down 2% after failing to hold the crucial price point of $25,000. The world’s largest cryptocurrency by market capitalization briefly hit the psychological threshold in the early hours Monday but has since fallen to $24,200. |
Liquidations over the weekend were considerably high. BTC’s total liquidations over the weekend totalled $205 million, compared with last weekend's figures of $15 million. After both bitcoin and ether reacted positively to lower-than-expected U.S. inflation last week, ether is down 5% on the day trading around $1,900. The cryptocurrency briefly hit $2,012 Monday, the highest since May. Altcoins also were mainly trading down on the day apart from crypto exchange Bitfinex’s token Unus Sed Leo (LEO), which was up 5%. In traditional markets, U.S. stock futures, crude prices and other commodities fell after new data showed China’s economic activity slowed across the board in July, including factory output, investment and consumer spending. China’s central bank cut key lending rates to revive demand after the weak data was released. In crypto news, Galaxy Digital (GLXY), abandoned a plan to buy BitGo, saying the crypto custody specialist had failed to provide financial statements by an end-of-July deadline. The $1.2 billion acquisition was announced May 2021 and was expected to close by the end of that year. European digital bank Revolut has been granted authorization by the Cyprus Securities and Exchange Commission, allowing it to offer crypto services across the European Economic Area. The authorization will enable Revolut to offer crypto services to its 17 million customers. And, Singapore's High Court granted beleaguered crypto exchange Zipmex more than three months of creditor protection so it can devise a funding plan, Bloomberg News reported on Monday. |
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Institutional Investors Are Increasingly Using Crypto Options Trading to Hedge Their Bets in Bear Market |
In the current bear market, crypto options trading has been a rare bright spot, building momentum even as crypto prices have plunged. A number of crypto exchanges have noted rising trading volume after reaching lows earlier this year. Options strategies have figured prominently among institutional investors and even miners as they try to weather crypto’s usual volatility and a downturn that could last for months, or longer, despite recent hopeful macroeconomic signs. More recently, traders have been using the crypto options market to bet on ether (ETH) and hedge positions as the Ethereum blockchain’s hotly anticipated Merge approaches. Panama-based derivatives platform Deribit, which is among the world’s largest exchanges for crypto options trading volume, told CoinDesk demand is surging ahead of the Merge. Earlier this week, in a disappointing second-quarter earnings report, crypto exchange giant Coinbase (COIN) even alluded to traders migrating to derivatives-focused platforms as a reason for declining trading volume. Coinbase’s dipping volume led to a 30% decline in the company’s revenues – below most analysts’ estimates. “A larger amount of trading volume took place at offshore exchanges in Q2,” Coinbase said in its report, adding: “The sequential decline in Q2 institutional trading volume was primarily driven by lower market maker volume on our trading platform. These market participants gravitate towards products such as derivatives and financing products, which are areas we’re continuing to invest in but we don’t currently have product parity with offshore exchanges.” A young market? Bitcoin options trading accounts for only 2% of open derivatives contracts across exchanges trading the cryptocurrency, whose market cap is about $462 billion, according to structure product provider Enhanced Digital Group (EDG). By comparison, traditional options trading of stocks accounts for 20% of the market cap of the S&P 500 at the Chicago Board Options Exchange (CBOE), EDG said. “When you think of all the other [S&P 500]-like products including [exchange-traded funds], SP Minis, etc., you can see that bitcoin options have multifold growth ahead of it,” EDG’s quant developer, Marcin Maksymiuk, told CoinDesk. Sudden market shocks, technological improvements and a maturing futures market will all contribute to the growth of options, according to Delta Exchange CEO Pankaj Balani. Delta generates over $200 million in options trading volume per day, and Balani said that “options provide a way for people to get engaged with the market even in a sideways environment.” He foresees options eventually accounting for 60% of the crypto trading market. Peter Wisniewski, managing partner of crypto-focused alternative investment fund Europa Partners, told CoinDesk the firm expects “the market to continue to mature with greater price efficiency and liquidity.” Wisniewski said the markets will likely tie options to a widening range of digital assets. “Currently, the only crypto derivatives markets with significant liquidity are priced to bitcoin and ether, but we expect to see a continual increase of derivative instruments priced to other types of digital assets, reducing volatility and driving more investment into the space,” Wisniewski added. Read the full story here. |
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With nearly a decade-long track record of being the world’s largest digital currency asset manager, Grayscale is an industry leader for secure and regulated exposure to crypto. Grayscale Digital Large Cap Fund (Symbol: GDLC) is designed to capture the market capitalization weighted performance of some of the largest and most liquid digital assets. As with all of Grayscale’s publicly-traded funds, investors can access the fund directly through brokerage or retirement accounts they already have - the same way they would for other asset classes like stocks and bonds. Simply type GDLC into an investment account, such as in Fidelity or Robinhood, to get started today. Learn more about Grayscale’s publicly-traded products here. Investing involves risks and the possible loss of principal. |
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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Biggest Gainers There are no gainers in CoinDesk 20 today. Biggest Losers |
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Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
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Join us for Converge22, Circle’s first annual crypto ecosystem conference, taking place September 27th-30th in San Francisco! Featuring wide-ranging demos and developer workshops, plus high-powered guest speakers including Ethereum's Vitalik Buterin, Aave’s Stani Kulechov, Mary-Catherine Lader of Uniswap Labs, Anatoly Yakovenko of Solana, and dozens more. Register with code Coindesk to receive $100 off your ticket! Register today > |
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Check out the CoinDesk TV show “First Mover,” hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. Justin Ehrenhofer, community member, Monero Brent Xu, founder and CEO, Umee |
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Where innovators, changemakers, investors and leaders present their best ideas for investing in the future of the Web 3, digital assets, blockchain and crypto ecosystems. Register now. |
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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