2023-11-10 05:26

CME's rise to the top rank highlights the growing institutional demand for bitcoin, as the venue is almost exclusively used by large traditional financial institutions, one analyst noted. CME Group just took the top spot on the list of world's biggest bitcoin (BTC) futures exchanges, replacing Binance for the first time in two years. Open interest – derivatives industry jargon for the number of existing contracts – on Thursday hit $4.07 billion worth of positions at CME, representing a 24.7% share of the entire bitcoin futures market, CoinGlass data shows. Binance was at $3.8 billion. CME is a stalwart of traditional finance, a Chicago-based firm whose business covers a wide span of financial, commodity and agricultural futures and options. The timing of it overtaking Binance, a crypto-focused exchange, is poignant. Wall Street firms like BlackRock are increasingly steering the narrative around bitcoin and the rest of crypto, by trying, for instance, to introduce bitcoin and ether (ETH) ETFs in an attempt to open up crypto investing to a broader group of people. Such financial heavyweights are accustomed to doing business on a highly regulated exchange like CME, as opposed to Binance, which has run into trouble with U.S. regulators. "As market participants seek regulated venues and highly liquid products to hedge market volatility and manage price exposure, we continue to see increased institutional interest across our crypto suite," said Tim McCourt, global head of financial and OTC products at CME Group. "Market participants view CME Group as a valued source for risk management." The change in rankings occurred as the crypto market endured a major leverage flush-out amid wild price swings on Thursday. The aggregate bitcoin open interest dropped by $2 billion from $12 billion. The decline impacted Binance traders disproportionately more than CME market participants. Bitcoin first surged to an 18-month high of almost $38,000 on Thursday, then sharply retraced toward $36,000 after a filing showed a corporate entity named "iShares Ethereum Trust" had been registered in the state of Delaware. A similar move happened before BlackRock – the owner of iShares – filed for a spot BTC exchange-traded fund (ETF) in June. CME's rise to the top happened gradually this year and is a significant development as it highlights the growing demand from institutional market participants to trade the largest and oldest crypto asset. A paper published by Bitwise Asset Management in 2020 said that the CME bitcoin futures market leads the spot market in a consistent and statistically significant manner. "The CME has been gaining market share for almost all of 2023, but these gains intensified over the past few weeks as market excitement around the BTC spot ETF applications soared," David Lawant, head of research at trading platform FalconX, told CoinDesk in a note. "Given the CME is a venue used almost exclusively by large traditional financial institutions, it shows how much interest there has been from this audience in crypto," Lawant added. Binance didn't respond to a request for comment, though CEO Changpeng Zhao posted a screenshot of this article on X (formerly Twitter) and wrote: "U.S. institutions are moving into crypto. What about your country?" https://www.coindesk.com/markets/2023/11/10/cme-topples-binance-as-top-bitcoin-futures-exchange-as-crypto-etf-excitement-soars/

2023-11-09 21:33

The world's largest asset manager has already made waves by seeking to list a bitcoin ETF BlackRock wants to create an ETF that holds Ethereum's ether (ETH), a plan that deepens the world's largest asset manager's commitment to cryptocurrencies. Following the news, ETH's price surged to its highest level of the day near $2,100, up about 3% versus just before the filing came out. It later gave back about half that gain, though it remains up about 9% versus 24 hours earlier. The company's plan was revealed in a filing by Nasdaq, the U.S. exchange where BlackRock will seek to list the product – which will need regulatory approval. Earlier Thursday, it emerged that the corporate entity "iShares Ethereum Trust" had been registered in the state of Delaware; iShares is the name of BlackRock's ETF division. BlackRock has already made waves in crypto by seeking to list a bitcoin ETF, the sort of easy-to-trade product that could dramatically broaden access to crypto to average investors. CEO Larry Fink has become a vocal supporter of crypto, reversing his previous skepticism. According to the filing, U.S.-based crypto exchange Coinbase would be the custodian for the ether held by the product, while an unnamed third party would hold its cash. BlackRock also has a market-surveillance pact with Coinbase; such surveillance-sharing agreements appear to be key to getting such ETFs approved by the U.S. Securities and Exchange Commission. The filing appeared to try and preempt possible SEC objections to the surveillance-sharing aspect, saying Blackrock believes the prices for CME Group's ether futures (and there are already ETFs that hold those) closely match spot ETH prices. "Either CME surveillance can detect spot-market fraud that affects both futures ETFs and spot exchange-traded products, or that surveillance cannot do so for either type of product," the filing said. "Having approved ETH futures ETFs in part on the basis of such surveillance, the Commission has clearly determined that CME surveillance can detect spot-market fraud that would affect spot ETPs, and the Sponsor thus believes that it must also approve spot ETH ETPs on that basis." https://www.coindesk.com/business/2023/11/09/blackrocks-ethereum-etf-plan-is-confirmed-in-nasdaq-filing/

2023-11-09 18:49

We were full of “irrational exuberance” in November 2021. Let me take you back to a simpler time. On this day two years ago, Nov. 9, 2021, bitcoin maxis were sporting red laser eyes, FTX had just closed a $420 million funding round and rumor had it that dogecoin’s (DOGE) biggest fan, Elon Musk, may host an upcoming episode of “S and L.” On this day, just two short years ago, bitcoin (BTC) set its highest price ever. Bitcoin’s “all-time high” is a matter of debate. Depending on where you look, the high water mark will be different. Coinbase calls the top at $68,569 (Nov. 8, 2021 at 7:00 p.m.), CoinMarketCap says it’s $66,953 and your most trusted and trustworthy news and data provider, CoinDesk, notches it a little above $67,000. I, like many, tend to call the pico top at $69,000 – because it’s okay to round up to the meme number, and because consensus in such a fragmented and illiquid market is really a subjective matter (involving where to draw the line about which exchanges to follow and data sources to watch.) The price itself, in retrospect, hardly matters. What was important at the time was that bitcoin was trading up. It was rallying, on an upswing fostered by a collective belief. Many truly thought that bitcoin wouldn’t stop, that $100,000 was soon on the way if we all just believed hard enough. Hence the laser eyes. It’s now commonly understood that this most historic of rallies was fueled by COVID-era stimulus, boredom and historically low interest rates. That crypto could be impacted by macroeconomic fluctuations was a bitter pill to swallow. Thought to be an inflation hedge, BTC instead traded like many other assets on the far-end of the risk curve. The months leading up to November 2021’s ATH were a period of “irrational exuberance,” to steal a phrase from Nobel laureate Robert Shiller. Heads of state at the time were seriously concerned about the risks crypto posed to the wider financial system. Jon Cunliffe, then (like now) Bank of England’s deputy governor, likened the multi-trillion dollar crypto market to the subprime mortgage industry in 2008. There were few actual use cases for crypto, yet a ton of leverage in the system. Crypto, for better or worse, is primarily a market built for speculators. The chief innovations that have come from over a decade of technical research, billions in venture financing and tens of thousands of startups have been financial products like “perpetual swaps” and novel indexes (not to discount pioneering ZK tech). Cunliffe was correctly worried about the credit risks that had built up in crypto. It’s telling that the first wave of bankruptcies after the market crashed were the centralized lending firms like Celsius and BlockFi. And that FTX’s chief undoing was stacking billions in loans on illiquid collateral. But he was wrong about the potential knock on effects of crypto cratering. Although pension funds, hedge funds and millions of Americans were invested in crypto, the market itself remained insular. Today, crypto appears to have decoupled somewhat from the wider economy. While bitcoin hit its all-time high during the same period that the benchmark equity index S&P 500 was cresting on a decade-long bull run, it started trading up at a time when some said “Tech was in a Recession.” Bitcoin is up well over 100% year-to-date, and altcoins are rallying right alongside it. Much of the excitement about bitcoin is being driven by the “narrative” of growing institutional interest. This isn’t entirely a false story: a number of significant Wall St. firms like BlackRock, VanEck and Fidelity are poised to launch crypto-based exchange-traded funds. Banks are building on blockchains, and “tokenization” has become a finance bro buzzword. Few people are still talking about crypto’s “banking problems,” and the industry successfully collaborated to dispel a dangerous political movement trying to link Hamas funding to crypto. Ask any white-collar commuter in Grand Central what they think about crypto and it’ll likely be “well, it’s not going away.” It likely remains the case that in the long term, crypto prices are still driven by macroeconomic forces. Bitcoin hit a low and traded sideways while Fed Chair Jerome Powell was raising rates, and it’s still an open question how the asset, launched as a reaction the greed and macroeconomic policies that kickstarted Great Financial Crisis, will fare in an official recession, which could come next year. In other words, despite signs of a thaw, crypto winter may not be over. There’s hope that the months-long deep freeze drove out the riff-raff, while the brightest minds continued to build. And while a “killer app” hasn’t been found, it’s clear enough the industry has a committed user base. But along with the institutional capital, supposedly waiting on the sidelines to be deployed after a BTC ETF goes live, are likely another wave of speculators and scammers. I don’t know if crypto’s increasing institutionalization will finally prove Cunliffe right about the risks crypto poses to the wider economy. If prices continue to rip without an actual cause, like an actual use case, it can only be explained by speculation — another round of the “greater fool” fearing FOMO. But I can say if bitcoin hits $100,000 because of an ETF, it might cost its soul. https://www.coindesk.com/consensus-magazine/2023/11/09/2-years-ago-bitcoin-hit-an-all-time-high-is-another-rally-on-the-way/

2023-11-09 18:35

BTC and ETH both surged to milestone levels amid bitcoin ETF optimism, but some shorts and longs got badly burned. Thursday's huge price swings in the two largest cryptocurrencies, bitcoin (BTC) and Ethereum's ether (ETH), prompted more than $400 million of open trades to get liquidated, the most since the August crash. The wild session comes at a time when BTC and ETH prices have been surging amid Wall Street's burgeoning interest in crypto. Both cryptos surpassed round-number milestones they haven't seen recently. BTC topped $36,000 and then $37,000 for the first time since May 2022 – and almost reached $38,000 – before retracing much of the rally. ETH got above $2,000 and hit the highest level since the April Ethereum upgrade known as Shanghai. Optimism over ETFs and the potential gusher of money they could lure into the industry fueled the move higher. On Wednesday, CoinDesk reported that Grayscale is in talks with two key Securities and Exchange Commission departments about the conversion of its bitcoin trust, known as GBTC, into an ETF. And then on Thursday, it appeared that BlackRock registered a new corporate entity – called the "iShares Ethereum Trust" – in the U.S. state of Delaware, where many corporations set up shop. iShares is the name of BlackRock's ETF division. The filing was done by BlackRock Advisors, a division of the world's largest asset manager. (The company incorporated the iShares Bitcoin Trust in the state a week before it officially filed paperwork for a spot BTC ETF in June.) BTC had been around $35,200 before the surge, and after the ETH news emerged, it started heading back toward that level, tanking to about $36,400. The extraordinarily volatile period resulted in a massive leverage wipeout, liquidating $241 million of short positions and roughly $200 million of longs during the day for all crypto assets combined, CoinGlass data shows. Liquidations mean that the exchange forcefully closes a leveraged trading position due to the partial or total loss of the trader's money down, or doesn't have enough funds to keep the trade open. The dynamic can exacerbate volatility as traders cover their positions and flushes out excessive leverage from the market. Thursday saw the largest amount of liquidations in a day since Aug. 17, when cryptocurrencies sharply sold off with BTC dropping to as low as $25,000 from around $29,000, with liquidations totaling $1 billion. Open interest, or OI, the total amount of open options and futures contracts held by market participants, for crypto derivatives plunged below $24 billion from over $26 billion, per Coinalyze data, as traders dismantled or were forced to close their leveraged positions. "12% (-$3b) Total OI wipeout in a few mins on the anniversary of the FTX collapse," widely followed crypto trader Hsaka posted on X (formerly Twitter). "Poetic." https://www.coindesk.com/markets/2023/11/09/wild-bitcoin-ether-price-swings-spur-400m-of-crypto-liquidations-the-most-since-august/

2023-11-09 15:32

BlackRock declined to comment on the filing mentioning the iShares Ethereum Trust. Asset management giant BlackRock (BLK) has seemingly registered an iShares Ethereum Trust in the state of Delaware, a filing from Thursday shows. An entity under the name of BlackRock Advisors submitted the paperwork. The registered agent, according to the filing, is Daniel Schwieger. A person with the same name is on LinkedIn as a managing director at BlackRock. A representative for BlackRock declined to comment on the news. Already up on the session in line with a general rally in crypto markets, ether (ETH) shot even higher on the news, now ahead about 7% for the session to $2,105. https://www.coindesk.com/markets/2023/11/09/ether-soars-above-2k-as-blackrock-ishares-ethereum-trust-registered-as-corporate-entity-in-delaware/

2023-11-09 13:19

"Do it within the law," Gensler said in relation to reports of buyers emerging for the failed crypto exchange. (FTT), the native token of defunct cryptocurrency exchange FTX, has surged by 90% following comments from U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler, who warned that if anybody wants to get involved in crypto, they must "do it within the law" following a series of bids to reboot FTX. In response to questioning over whether Tom Farley, former president of the New York Stock Exchange, was looking to buy FTX, Gensler said: "If Tom or anybody else wanted to be in this field, I would say, 'Do it within the law.'" "Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures, and also that you’re not commingling all these functions, trading against your customers," Gensler continued. "Or using their crypto assets for your own purposes." There are reportedly several groups in the running to take over FTX following last week's trial that saw the company's founder, Sam Bankman-Fried, receive a guilty verdict on seven criminal charges. The speculative rally indicates hope for further upside if FTX 2.0 gets the green light, although there is no certainty that a native token would even be used in a restarted exchange. FTT is currently trading at a seven-month high of $2.30 with trading volume over the past 24 hours exceeding $300 million, according to CoinMarketCap. In spite of optimism around a potential relaunch, a number of institutional traders expressed their concerns with the platform earlier this year citing poor latency and "tons of issues." https://www.coindesk.com/markets/2023/11/09/ftt-token-jumps-90-as-gensler-seemingly-paves-way-for-ftx-reboot/