3Q20 nearing close. Is Bitcoin an Institutional Mainstream Asset?
Cash-settled futures are taking a backseat in comparison to physical-settlement on Bakkt’s Bitcoin futures. With time left on the quarter, Bakkt has seen trading volumes hit over $4bn, the whopping majority coming from physically-settled futures.
CME futures aren’t slouching either. The largest futures exchange saw Bitcoin trading volume nearing the $30bn mark for 3Q20. Already, this is over $4bn than its previous record set in 1Q20.
The cryptocurrencies correlation to gold has increased in recent months nearing levels seen with Bitcoin and the S&P500 according to CoinMetrics.
Meanwhile, 30-day rolling volatility moves back into a downtrend now sitting at 2.1%.
Bitcoin has been able to gain interest on institutional exchanges, all the while trending alongside major assets such as the S&P500 and gold. While this indicates that Bitcoin has yet to establish itself as either, it does lend viability to the notion that the cryptocurrency is being more closely traded by larger players who are deep and wide across the investment sphere.
News
Wrapped Bitcoin sitting on Ethereum has broken past the $1bn mark. Nearly 110k Bitcoins (a little under 1% of total circulating supply) has made its way onto the largest smart-computer blockchain as Decentrazlied Finance (DeFi) garners great interest. 7 different protocols now support wrapping Bitcoin, with the latest entrant being tBTC who has structured their security around network nodes, wallets and smart contracts which in effect bypasses custody services such as BitGo, which is currently used by the largest wrapped Bitcoin protocol, wBTC.
Decentralized exchange Uniswap has been able to receive nearly 70% of the total wrapped Bitcoin according to data complied on Dune Analytics by Elias Simos. A dashboard well worthy of everyone’s attention.
Link: https://explore.duneanalytics.com/dashboard/btc-on-ethereum_1
With US elections around the corner, the question lingers as to how Bitcoin will react. CoinDesk’s Omkar Godbole does a small analysis on implied volatility in Bitcoin markets and whether or not risk has potentially been understated. Also worth a read is Omkar’s bullet point analysis which have skeptics looking at a sub-10k Bitcoin.
Link: https://www.coindesk.com/bitcoin-options-understates-chaotic-election
Link: https://www.coindesk.com/equity-markets-turmoil-could-push-bitcoin-below-10k-say-analysts
CoinDesk’s Paddy Baker runs down the latest Exchange Traded Fund (ETF) for digital assets that will trade on the Bermuda Stock Exchange. An ETF landing in the US is seen to be as the holy grail spiking interest and liquidity, however, the Securities and Exchange Comission (SEC) has yet to give any positive indication as to the chances of approving one. The key point always highlighted in their reports has been the lack of proper price discovery coming from a regulated exchange likely pointing the obvious fact that derivative trading, the lions share, remain in lenient jurisdictions.
Link: https://www.coindesk.com/nasdaq-sec-fund-manager-crypto-etf
