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cryptocurrency Bitcoin futures 2019-20

cryptocurrency Bitcoin futures 2019-20

Bitcoin is a peer-to-peer payment system and digital currency introduced as open source software in 2009 by pseudonymous developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money.

The definition of a cryptocurrency is a digital currency built with cryptographic protocols that make transactions secure and difficult to fake. The most important feature of a cryptocurrency is that it is not controlled by any central authority: the decentralized nature of blockchain makes cryptocurrency theoretically immune to the old ways of government control and interference. Cryptocurrencies make it easier to conduct any transactions, for transfers are simplified through use of public and private keys for security and privacy purposes. These transfers can be done with minimal processing fees, allowing users to avoid the steep fees charged by traditional financial institutions.


However, the latest news on cryptocurrencies indicates that because cryptocurrencies are devoid of a central repository, a digital cryptocurrency balance can be wiped out by a computer crash, a hack, and other unexpected events.

When bitcoin was born it was a symbol of counterculture, a rebel currency with near-anonymity and a lack of regulation. A decade later, there are growing signs it's entering the establishment its creators sought to subvert.

As the cryptocurrency has surged in value bigger investors, from trading firms to hedge funds, have increasingly turned to exchanges regulated in traditional financial centres. They are buying bitcoin futures to gain exposure to the asset while avoiding the hacks and heists that plague the industry.

The crypto market, associated by many with the dark web, money laundering and the Wild West, is beginning to be discussed by financiers in the same breath as derivatives, hedging instruments and compliance.

Investors ploughed record levels of money into bitcoin futures at regulated exchanges in the United States and Britain last month, hungry for a piece of the action but seeking the kind of protection that will satisfy their compliance officers.

Between March and May, bitcoin more than doubled in price, an ascent peppered by double-digit price swings reminiscent of its 2017 bubble, which was driven by smaller retail investors.

During that period, Chicago-based CME Group Inc's average daily volumes of futures contracts climbed over seven-fold to a record $508 million in May. The number of open interest contracts - those that haven't been settled - also hit a record.

CME said bitcoin's price gains, and the subsequent increase in volatility, attracted new investors seeking to hedge risk.

Crypto Facilities, a London-registered platform bought this year for over $100 million by major US cryptocurrency exchange Kraken, said bitcoin futures daily trading volumes jumped over three-fold from March to a record $84 million in May.

In a sign of the growing mainstream market, the owner of the New York Stock Exchange, Intercontinental Exchange Inc (ICE), plans to offer bitcoin futures in the coming months through a new crypto-trading platform

Bitcoin has rallied more than 9 percent in the last nine days, but on low volumes – a sign of low investor confidence. As a result, the gains could be short lived.
The bearish volume divergence indicates BTC could dive out of a “rising wedge” bearish reversal pattern seen on the 4-hour chart.
A wedge breakdown, if confirmed, could see a return to $8,000 or lower.


If trading volumes pick up in the next 24 hours, prices may rise above $8,500 over the weekend, validating a bearish channel breakout witnessed earlier this week.
A clear divergence between prices and trading volumes on the charts suggests bitcoin’s (BTC) recent $800 rally could be short-lived.

Prices are currently up more than 9 percent from recent lows near $7,500 on June 6. Notably, BTC revived the short-term bullish outlook with a move above $8,100 on Wednesday. The follow-through has been positive, as well.

Yes, as trading volumes haven’t picked along with the price rise, the breakout lacks substance.

bitcoin graph

For instance, bitcoin’s 24-hour trading volume across all cryptocurrency exchanges currently stands at $19 billion – down 42 percent from the high of $33 billion seen on May 16, according to CoinMarketCap.

More importantly, daily trading volume has averaged roughly $18 billion throughout the recent recovery from $7,500 to $8,300, which is significantly lower than the sell volume of $24 billion and $29 billion seen on May 30 and June 4.

While the wider market is reported to be rife with inflated volumes, the numbers from major exchanges included in the calculation of Bitwise’s “real” bitcoin trading volume also show the recent price rise is not backed by big volumes.

The exchange further stated that effective on Sept. 12, 2019, “users who are not in accordance with Binance’s Terms of Use will continue to have access to their wallets and funds, but will no longer be able to trade or deposit on Binance.com.”

 

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That’s all for this post. I hope you find it helpful. Feel free to drop any queries, doubts, or suggestions regarding anything mentioned above in the comments section

Disclosure: whatsapp group has denied all reports of a data breach saying that all user information, including their financial data, is safe and securely stored on its servers.

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