July Trading Hits 2020 Low, Open-Interest in Bitcoin Hits New All-Time-High
2020–08–03
Bitcoin futures trading volumes for July closed at the lowest levels for 2020 and volatility also petered out. Versus a year ago, Bitcoin volume on major exchanges as well as CME and Bakkt saw a 4% decline and a 42% decline versus the high point seen this year in May (see chart).
Open-Interest for Bitcoin futures however ended the month on a positive note with over $5.4Bn — an all-time-high (see chart) beating pre-COVID crisis levels of 2020.
Bitcoin volatility has made a comeback alongside traditional markets. With it, trading volume, open interest on derivative markets and massive swings of potential returns. 30-day rolling volatility hit an annual low towards the end of July. But this trading week has seen it shoot right back up to 2.2% from 1.2% a week ago (see chart).
Major blockchain analytics firm Chainalysis has launched their own ‘Market Intel’ platform open to the public tracking 14 different metrics across select large cap cryptocurrencies. Leading the project, the company’s Chief Economist Philip Gradwell, said that “these metrics are built on Chainalysis data, giving completeness and accuracy. They focus on real world entities, not technical blockchain concepts, and include unique metrics, such as flows between entities, regional flows, liquidity, and illicit activity.” Explanations of each metric are being clearly written up by Mr Gradwell on LinkedIn and has already covered exchange inflows, change in assets held on exchanges, and trade intensity.
Cryptocurrency exchanges and operations have been seeing traditional defectors for several years now and the trend is now shifting into the ever-growing derivatives market. After successfully wrapping up a funding round that secured Skew $5mn in April 2020, the derivatives focused outfit has now landed some new executives into their ranks. Skew founders themselves coming out of marquee investment bank names, have also managed to siphon off three big hitters too. Jamie Selway formelly sat on the board of now CBOE-owned BATS will also chair at Skew. And earlier the company welcomed in Jonathan Skrzypek, former Global Head of Middleware Messaging Engineering at Goldman Sachs, as Head of Data Engineering, and Michael Wilson, former EMEA Head of Equity Sales at JP Morgan, as advisor.
Crypto News Headlines
Omkar Godbole from Coindesk writes up “Bitcoin Investors Unshaken By Sunday’s Flash Crash, Data Suggests” in a quick bullet point follow up to events leading up to and after the cryptocurrency hit its 2020-High. Omkar also takes a look at Bitcoin options markets here.
Anna Baydakova from Coindesk reports on new regulation out of Russia where President Vladmir Putin has signed two bills on digital assets.
An Op-Ed published in The Block written by Peter Johnson and Pete Mscichowski from Jump Capital, takes a deep dive into Bitcoin’s use and demand in developing nations while looking into adoption which by there assessment will be triggered by lack of trust in central governments. Read: The ascent of bitcoin and stablecoins: Jump Capital’s mid-2020 crypto theses
Ethereum History in 5 Charts — A great round-up by Christine Kim and Shuai Hao as the world largest ‘smart-contract’ blockchain turns a birthday. Initially released in 30 July 2015, Ethereum has become a poster-child for post-traditional finance with the advent of DeFi. And scaling problems look to soon be tackled with Ethereum 2.0. William Foxley takes deeper look into the prospect.
What we’re reading
Words: A compilation of nearly four-hours of reading on whats happened in Bitcoin over the past several months with thought pieces. Some story titles are listed below, but be sure to visit the website to get the full picture in PDF or EPUB format making for easy reading.
- There will be bitcoin.
- Bitcoin: A Global Standard of Value
- Freedom Money — Bitcoin and the First Amendment
- Masters and Slaves of Money
- Soft money, Soft minds.
- Bitcoin is more like ham radio than the early internet
- Accepting Scarcity: A Bitcoin Meditation
