Čvc 10

Price Cycles of Past & Future

Ran into this article over the weekend. The piece was extremely well written and resembles a lot of the stuff being published today. Though in retrospect, I think the question posed in the headline has been answered with a resounding affirmative.

Can Bitcoin recover?

For more insight into Bitcoin’s price action over the last few years,  here is an article I’ve published in the Global Banking & Finance Review.

And if you want to understand more about the future of cryptocurrency transactions in the real world, please also check out this article from our UK Managing Director in The Telegraph.

Enjoy!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Football is driving the Pound
  • Is a Recession Coming?
  • New Crypto Products

Please note: All data, figures & graphs are valid as of July 9th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

As England advances in the World Cup, it seems the country has taken a step back on Brexit. Prime Minister Theresa May’s plan hasn’t been received as well as she would’ve liked. Her Foreign Secretary even likened the plan to a “polished turd,” but it seems he is now behind it.

Unfortunately for May, some critical players did not get behind it, namely the Brexit Secretary David Davis and two of his associates. With just 8 months until the March 2019 deadline, it’s looking like there will be difficult times ahead.

The Pound Sterling is seemingly unphased by all of this. Not only did it open the week with a notable gap up (purple circle), but it has continued to climb throughout the morning.

eToro - GBPUSD price chart

In fact, the British Pound has been one of the best performing currencies so far this month as the US Dollar is seeing a bit of a pullback.

USD chart - eToro

It will be interesting to see the Pound’s reaction to the game on Wednesday night. So far, the games have certainly had an impact on the mood in London, which seems to be having a bigger impact on the markets than Brexit.

The blue circle on the GBPUSD chart above is the game between England and Colombia, the victory of which secured their position in the quarter-finals. The game against Sweden happened when the markets were closed for the weekend, which might explain the weekend gap mentioned above (purple circle).

US Signs of Recession

Watching the stock markets these last few months has been like watching a game of tennis, only instead of side to side, it’s been more like up and down. Ever since the big drop at the beginning of February, the Dow Jones has been rather random with cycles of about 1000 points in either direction but going nowhere fast.

eToro - DJ30 price chart

Markets are moving upwards today, especially in Asia as the China50 scored 3.46% this morning.

Meanwhile in the United States, one of the oldest indicators of economic instability is inching closer to a bad omen.

As we discussed in an update from June 27th, the spread between the yields of the 2-year and the 10-year treasury bonds has been getting very narrow. At the time, it was as low as 34.24 basis points.

Today, that number has fallen below 30 basis points for the first time since 2007.

eToro - US 2 to 10 year treasury yield curve

If the number goes negative, that is a clear sign that investors are more worried about what might happen in the short-term than they are about the long-term market stability.

Now for Crypto

The crypto markets have been pretty calm over the weekend with prices showing excellent signs of stability over the last few weeks. The next hurdle for bitcoin is a psychological resistance at $7000.

eToro - Bitcoin price chart

Also in crypto news today…

eToro - Bitcoin ETF

No doubt, if the CBOE gets approval for a bitcoin-based ETF it will be yet another way for Wall Street traders to gain liquidity on the world’s favorite digital asset.

However, the volumes on the crypto-products already offered by CBOE and CME are still quite low. Having an additional product won’t necessarily open the floodgates, but what it will do is improve the situation during the next price surge.

Let’s have an amazing week ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. 

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: http://etoro.tw/Mati
Twitter: https://twitter.com/matigreenspan
LinkedIn: https://www.linkedin.com/in/matisyahu/
Telegram: https://t.me/MatiGreenspan


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Čvc 06

European ETF Trading Behemoth Begins Trading Bitcoin and Ethereum ETN

Flow Traders NV, Europe’s largest exchange-traded funds (ETF) trader has begun buying and selling Bitcoin and Ethereum exchange-traded notes (ETN). The company becomes the first to reveal its participation in any cryptocurrency ETN. The big question now is, when will a Bitcoin ETF become a reality?


Buying and Selling Bitcoin and Ethereum ETNs

An ETN isn’t all that different from an ETF. The principal difference between the two is that ETFs are investments in funds that track the price movement of an asset whereas ETNs are more like investing in bonds.

Flow Traders is trading in the Bitcoin and Ethereum ETNs launched by XBT Provider in 2015 and 2017, respectively. XBT is listed in Sweden with an asset management portfolio north of $1 billion.

This news of a cryptocurrency ETN listed on a regulated exchange is perhaps the most significant virtual currency news since the emergence of Bitcoin futures trading in December 2017. For one thing, it is yet another investment vehicle that is right up the alley of institutional investors.

Many analysts and commentators have identified the entry of institutional money into the cryptocurrency space as the next milestone in the growth of the industry. Investment products like futures, ETNs, and ETFs provide a much more viable option for these investors than the usual cryptocurrency trading market.

Commenting on the development, Dennis Dijkstra, the co-CEO of Flow Traders NV said:

People underestimate crypto. […] It’s big, and it is to be regulated very soon. The market participants are much more professional than people think. Institutional investors are interested – we know they are because we get requests.

Image result for Dennis Dijkstra

How the ETN Works

As a high-frequency trader (HFT), the company plans to hedge each trade as quickly as possible regardless of the direction of the Bitcoin and Ethereum price movements. To do this, Flow Traders is hedging its ETN with CME and CBOE futures contracts. All of these, in theory, should lower slippage while increasing liquidity.

According to Dijkstra, the approach holds immense benefits for the company. He did not provide any details concerning whether the Flow Traders will utilize Bitcoin or Ethereum to hedge each trade, however.

The Quest for Bitcoin ETF

With an ETN already a reality, perhaps a Bitcoin ETF might be a possibility in the not so distant future. So far, the United States SEC has remained unwilling to approve any of the Bitcoin ETF proposals it has received.

The narrative was that the emergence of futures trading would herald the dawn of Bitcoin. However, half a year has come and gone since then and still no favorable decision from the SEC has been forthcoming. In June 2018, two prominent firms; VanEck and SolidX decided to collaborate with the hope of standing a better chance to obtain the much sought-after SEC approval for cryptocurrency ETF.

Will the trading of Bitcoin and Ethereum ETNs help pave the way for a Bitcoin ETF? Let us know what you think in the comments below.


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Čvc 02

Did the SEC Just Make it Easier to Launch a Blockchain Based ETF in the US?

The US Securities and Exchange Commission (SEC) this week approved plans for public comment which would make it easier for investment companies to bring new exchange-traded funds (ETFs) to market. Could these new rules enable the creation of more blockchain-based ETFs?


The SEC’s proposed changes would remove the need for many ETFs to seek special permission from the SEC and is targeted towards what the industry describes as “plain vanilla” ETFs. The proposal met with unanimous approval from SEC commissioners.

New Rule Will Apply to Most ETFs

SEC Chairman Jay Clayton says the new rule would “level the playing field” and that:

The proposed rule would cover most ETFs operating today and all similar ETFs that sponsors may seek to launch in the future.

Clayton did qualify his statement by explaining the new rule wouldn’t cover all products, some would require greater scrutiny. Complex leveraged products sometimes called “exotic” ETFs, for example, would not be eligible for the new process the rule would create.

In theory, the change could open up the market for investment firms offering blockchain-based ETFs. That is, ETFs which – instead of investing in cryptocurrencies themselves – invest in companies developing, or based on, blockchain technology. Blockchain-based ETFs can be viewed by traditional investors as a less risky way to capitalize on the new blockchain economy.

In practice, there has been no clarification as to whether blockchain-based ETFs would require “greater scrutiny.” They might not if they meet the industry definition of “plain vanilla,” simply based for example, on share options or bonds with no “exotic” features like extra rules for meeting a certain price point before becoming active.

New Rule Will Apply to Most ETFs

Impact on Bitcoin-based ETFs

Though the SEC has yet to specifically mention blockchain or bitcoin-based ETFs in reference to these discussions it is almost certain that bitcoin-based ETFs, which invest directly in cryptocurrencies themselves, are unlikely to see any favor from the proposed new rules.

The SEC is currently reviewing applications for a number of bitcoin-based ETFs and is holding back on the approval due to unanswered questions pertaining to the cryptocurrency markets and the way coins are valued and regulated. According to reports, the SEC has rejected over a dozen applications already.

Dalia Blass, SEC Director of Investment Management, penned a letter in March 2018, outlining the SEC’s concerns regarding bitcoin-based ETFs.

The approval of a bitcoin-based ETF would be significant, with some experts predicting this might now happen sooner rather than later.

Indeed, the SEC is seeking public feedback on an application by CBOE Global to list an ETF with bitcoin shares backed by VanEck and SolidX in documents published on the SEC website on June 26th, 2018. The move by the SEC could well signify a change in its attitude towards ETFs that invest in cryptocurrencies.

If the new rules proposed by the SEC are implemented it will be interesting to see whether blockchain-based ETFs are treated in the same way as ETFs investing in more traditional companies and technologies. If the SEC is actually targeting “plain vanilla” ETF structures with the more relaxed approach this could be the case.

The SEC could also decide that blockchain-based ETFs require “greater scrutiny,” however, the loosening of the regulatory pressure on the $3.6 trillion USD market for ETFs still marks progress which could eventually see both blockchain-based and bitcoin-based ETFs as common features of institutional markets.

Todd Rosenbluth, director of ETF & mutual fund research at CFRA Research, told Reuters the proposed rule change could:

Support new ETF launches, particularly tied to long-term thematic approaches, from small independent asset managers.

The SEC has approved seven blockchain-based ETFs in 2018 to date and Canada approved its first blockchain-based ETF in February 2018.

Do you think the proposed changes will enable the creation of more blockchain-based ETFs? Will it open the door for Bitcoin-based ETFs? Let us know in the comments below.


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Dub 28

EToro Sees Bitcoin & Ethereum Trading Volume ‘Explode’ by 4,500%

· April 28, 2017 · 5:30 am

eToro has revealed that the number of users its Bitcoin and Ethereum has soared while trading volumes have “exploded” on its platform since the beginning of the year. 


eToro Runs Up Trading Volume 4,500%

EToro, a leading online trading and investment platform, has experienced a huge increase in both cryptocurrency users and trading volume of Bitcoin and Ethereum, according to Marketwatch. 

So far this year, eToro users trading CFDs (contracts for difference) in cryptocurrencies his risen by four times compared to the same period in 2016. Since the beginning of the year, cryptocurrency trading volume on eToro has soared by a whopping 4,500%.

Since Bitcoin trading has been supported by eToro since 2014, one major reason for this surge can be attributed to the platform’s addition of Etheurem in the beginning of the year.

The price of Ethereum has jumped from about $15 USD per Ether (ETH) to over $65 today in just the past two months. This is reflected in 90% of Ethereum traders buying the asset since it was launched on eToro. Meanwhile, 80% of Bitcoin traders have been buying up the cryptocurrency for a consecutive fifteen months, eToro notes. 

It should also be noted that eToro provides a feature called “copy functionality.” This lets novice users copy the trading strategies of its most successful cryptocurrency traders.

‘Cryptocurrency is the Future of Forex’

Commenting on this impressive growth, Senior Markets Analyst at eToro, Mati Greenspan, believes that “Cryptocurrency is the future of forex.”

[O]ver the last 12 months we’ve seen a 4x growth in traders accessing this market. But the volume of trading has exploded even more than this, with a huge 4,500% jump.

As the total cryptocurrency market capitalization recently passed $30 billion, Greenspan explained, that its users have been reaping ‘significant rewards’ from this jump in prices and a nascent market that has doubled in just the past four months. 

“The rapid growth in the adoption and price of cryptocurrencies only marks the first few steps on the long-journey to establishing cryptocurrencies as a dominant force in forex trading,” he continued.

We expect cryptocurrency trading volumes to get much bigger over the coming years.

As Bitcoin is once again above Gold market price, surging to record highs, the cryptocurrency market should continue to attract even more traditional investors looking for the next big thing.

Recent news of the Securities and Exchange Commission (SEC) willing to review its rejection of the Winklevoss Bitcoin ETF is just the latest in a string of positive news for traders to be bullish on Bitcoin and cryptocurrencies as a whole.

Will the cryptocurrencies market continue to attract traditional investors or will we see another repeat of the dot-com bubble? Share your thoughts below!


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Dub 26

Take Two: SEC to Review Its Bitcoin ETF Decision

· April 26, 2017 · 9:00 am

The U.S. Securities and Exchange Commission has announced that it will review its decision regarding the Winklevoss twins’ Bitcoin ETF.


SEC to Review Its Bitcoin ETF Decision

The U.S. Securities and Exchange Commission (SEC) will review its decision regarding the rejection of the Bitcoin exchange-traded fund (ETF) proposed by Cameron and Tyler Winklevoss.

statement issued by the SEC in response to a petition for review of the Disapproval Order by the Bats BZX Exchange reads:

[…] it is hereby: ORDERED that the petition of BZX for review of the Division’s action to disapprove the proposed rule change by delegated authority be GRANTED; and It is further ORDERED that any party or other person may file a statement in support of or in opposition to the action made pursuant to delegated authority on or before May 15, 2017.

The SEC first rejected the Bitcoin ETF (COIN) proposed by the Winklevoss twins last month, citing risk of fraud and a lack of regulation in the Bitcoin markets. The statement in which the SEC rejected the COIN EFT reads:

As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

The petition filed by the Bats BZX Exchange will see the SEC’s action to disapprove the Bitcoin ETF reviewed and possibly amended. If so, COIN ETF shares would be traded on a public stock exchange, providing an easy way for investors to capitalize on the price of BTC without the need to deal with Bitcoin exchanges, wallets, private keys, and so forth.

Winklevoss Chose Bats Exchange For a Reason

As noted by Blockchain researcher and host of the Crypto Scam podcast, Tone Vays, ‎in a 2016 interview, it is very likely that the Winklevoss twins chose to work with the Bats BZX Exchange on the COIN ETF for this very reason. 

Vays

“My guess is the reason that they changed is that Bats is the new kid on the block, so they push the issues a bit,” Vays explained. 

Not only does it make sense for the Winklevoss twins to identify with the Bats BZX Exchange due to the “experimental” nature of the COIN ETF, but it is also a great strategic move that ensured the exchange they partnered with would help them fight to see the Bitcoin ETF approved.

Vays continued:

Nasdaq might not have been helping the Winklevoss fight against the SEC to get this approved and maybe Batz said ‘you know what, we’ll throw your lawyers at it’.

The Saga So Far

The Winklevoss’ bid to see a Bitcoin exchange-traded fund on public stock exchanges is a saga that has been going on for roughly three years. It started with the filling of an S-1 form for the Winklevoss Bitcoin Trust in May 2014.

Twins

The Winklevoss Bitcoin Trust was based on the twins’ substantial Bitcoin holdings (roughly 1% of the total supply at the time) and had Math-Based Asset Services LLC as the sponsor of the Trust. Later that year, a follow-up filling was made in order list the Winklevoss Bitcoin Trust as an ETF on the NASDAQ OMX exchange with the name “COIN.”

Two years later, in June 2016, the twins filed a document that would see the ETF listed on the Bats exchanged instead of Nasdaq. The same filing also saw the ETF offering increase from $20 to $65 million.

Last month, the Securities and Exchange Commission (SEC) denied the Winklevoss Twins’ Bitcoin ETF, which lead to the petition by the Batz BZX Exchange.

Do you think that the Winklevoss Bitcoin ETF will be approved after the SEC’s revision? If so, let us know why in the comments below.


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Bře 14

Any Bitcoin ETF Gaining Approval in 2017? Don’t Bet On It. Here’s Why

· March 14, 2017 · 4:00 am

The defeat of the COIN Bitcoin ETF turned out to be the story that wasn’t. Yes, it caused a sharp dip in the market, but this was filled within hours on Friday evening. Some say this is not a big deal because other ETF proposals wait in the wings. But the evidence says they will suffer a similar fate.


‘Significant Markets for Bitcoin are Unregulated’

Let’s take you back to Friday afternoon. The decision on the Bitcoin ETF was set to come down by Saturday, March 11th, so the SEC held up their end of the bargain. They did not delay the decision again, but said they will not approve the proposal. The deeper issue is why it was not approved.

4

“Based on the record before it, the (SEC) Commission believes that the significant markets for bitcoin are unregulated,” the SEC said in a statement. “The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop.”

Bitcoin ETF a ‘Cause for a Pause’

This does not sound like a problem based on The Winklevoss Twins actual proposal, or a technicality. The problem the SEC seems to have is with the Bitcoin market overall. They specifically mentioned multiple global markets, plus a long time view of their progression towards regulation, which really isn’t in the offing.

bak

“The SEC made a strong statement and it listed its concerns, and I thought it did a very good job of explaining its rationale,” Phil Bak, the former head of ETF listings at the New York Stock Exchange told MarketWatch.

Bitcoin will mature as an investment over the coming years, but I don’t think we’ll see a change in how the SEC views it over that time. For the other firms trying to bring one to market, I’m trying to think of a nice way to say, ‘no chance in hell’ for their approval.

The Winklevoss Twins have been on this mission for almost four years and they have decided not to give up on the process. However, the reasons for denial have virtually nothing to do with the proposal, so where do they go from here?

Winklevoss Twins

“They can obviously try again, and SEC membership continually changes, but getting rejected is usually a stop, or at least cause for a pause. I don’t know what the next steps would be,” said Todd Rosenbluth, director of ETF and mutual fund research at CFRA.

“The SEC highlighted the unregulated market for bitcoin, and I don’t think the filers could do anything to change that,” Rosenbluth said.

Therefore, it appears that similar filings such as Barry Silbert’s Bitcoin Investment Trust will share a similar fate as COIN or at least until regulators get better oversight of Bitcoin and its related markets.


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Bře 11

Bitcoin ETF Rejected; Price Dips Below $1,000

· March 11, 2017 · 12:20 am

The Bitcoin ETF proposal (COIN) has been rejected by the United States Securities and Exchange Commission, which immediately sent the price plunging down to a $958.5 low.


Bitcoin ETF Rejected

The much anticipated Bitcoin ETF filed by the Winklevoss Brothers in mid-2013 has been officially rejected. The document outlining the decision states the reasons for the rejection:

Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs—agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market—the Commission does not find the proposed rule change to be consistent with the Exchange Act.

This decision caused widespread community outrage since many believed that there was a fair chance that the ETF would be approved.

Twins

Many users, including Andreas Antonopoulos, a prominent member of the Bitcoin community, took to social media to voice their disagreement:

Immediate Price Crash

Almost right after the decision was published, the price of Bitcoin saw a crash down to around $958 USD, translating to a decrease of almost 25% in a matter of minutes.

Bitcoin Price After ETF Decision

The price slowly recovered and had been fluctuating around $1,100 USD at the time of writing. Prior to the announcement, the price hit a volatile peak of $1,350 USD amid speculation that the ETF would be likely approved.

These large swings in price also caused increased trading volumes on Western exchanges, with Bitfinex and Bitstamp seeing a combined volume of almost 80,000 BTC.

Will Bitcoin price recover after this crash? Share your thoughts below!


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Led 21

Barry Silbert’s Bitcoin Investment Fund Files $500m Share Offering

· January 21, 2017 · 7:00 am

Barry Silbert’s Bitcoin Investment Trust has filed form S-1 with the US Securities And Exchange Commission (SEC) for up to $500 million USD worth of shares.


Private Placement Shares End

The documentation, submitted Friday, will take the Trust a step closer to listing on the New York Stock Exchange should the SEC approve it.

Bitcoinist_Digital Currency Group Barry Silbert

Grayscale Investments, LLC announced today that it has filed a registration statement on Form S-1 relating to the proposed registration of the Bitcoin Investment Trust’s shares (the “registered Shares”) with the Securities and Exchange Commission,” an accompanying press release confirmed.

The investment objective of the Bitcoin Investment Trust is for the registered Shares to reflect the performance of the value of a bitcoin, before liabilities and expenses of the Trust, as represented by the TradeBlock XBX Index.

The move also means that the Trust’s holding company, Grayscale Investments, has ceased offering shares in the Trust through its private placement.

“As of the close of business on January 19, 2017, Grayscale Investments, LLC has ceased its ongoing private placement and will no longer issue shares of the Bitcoin Investment Trust through its previous 506(c) private placement,” an additional announcement stated Friday.

Shares of the Bitcoin Investment Trust will continue to be quoted in the secondary market on OTCQX®, the top marketplace operated by OTC Markets, under the symbol: GBTC.

Grayscale has also announced a new Ethereum Classic Trust, with more details to be announced in the near future.

Analysts: SEC ‘Worried About FUD’

The SEC is also currently considering the Winklevoss twins’ Bitcoin ETF, which has faced a long process to ratification and has still not received the regulatory blessing.

Bitcoinist_Bitcoin Devleopment Funding

Earlier this month, analysts suggested the SEC was unlikely to grant the Fund approval due to various factors causing unease – including, somewhat unusually, “fear, uncertainty, and doubt.”

Nonetheless, the instrument has already proven its viability, for example in a surge last January as uncertainty gripped global stock markets.

A decision from the SEC is expected by March, and if successful, the same analysts note, the Bitcoin ETF could see $300 million flow into the Bitcoin ecosystem from new Wall Street investors.

The Winklevoss twins have been vocal in their support for Bitcoin as an asset, stating is “better than gold” and calling Bitcoin “the greatest social network of all.”

The BTI meanwhile, launched back in 2013, began trading on the OTCQX in May 2015. 

What do you think about the chances for the Bitcoin Investment Trust compared to the Bitcoin ETF? Let us know in the comments below!


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