The first Bitcoin futures ETF trading volume shrinks. Will Bitcoin touch $100,000 by the end of this year?

Recently, the US Securities Regulatory Commission approved the Bitcoin Futures ETF (Proshares Bitcoin Strategy ETF). Since the listing of the first Bitcoin futures fund, the fund’s trading volume has opened up and down. It closed at US$43.28 (the highest price of US$43.95) on October 20, with a trading volume of 29.87 million units. Since the 21st, the trading volume has shrunk several times. It closed at 40.58 US dollars on October 25, and the trading volume fell to 7.08 million units.

On October 22, the Valkyrie Fund launched the Valkyrie Bitcoin Strategic ETF. The closing price of the day was 24.3 US dollars, and the trading volume was 3.19 million units; on the 25th, it closed at 24.95 US dollars, and the trading volume was only 1.26 million units. . The Canadian version of the Bitcoin Fund (Purpose Bitcoin ETF), which was listed on February 18 this year, opened at 11 Canadian dollars per unit, and then opened high and low. It was not until October 6 that the trading price was stimulated by the US Bitcoin futures fund. It started to rise and closed at 11.54 Canadian dollars on October 25.

In the world of decentralized finance, the market often undergoes brand-new changes, which influence the views of regulators, financial service companies, non-financial companies, and retail investors on cryptocurrencies. In less than half a year, cryptocurrency has made new progress in market construction, transaction subject cultivation, and Bitcoin mining, which prompted the US Securities Regulatory Commission and the U.S. Central Bank to change their views on Bitcoin.

As before, Bitcoin is still worthless, but as the energy crisis deepens and the prices of natural gas, coal and oil skyrocket, the cost of Bitcoin mining will certainly rise. On October 13, Dimon, the president of JP Morgan Chase, once again criticized Bitcoin for being “worthless” and called on the government to strengthen supervision. But the speaker is honest and the listener is contemptuous. Dimon’s words are not worthy of Elon Musk’s posts on social media, nor of Kathar Wood’s influence among retail investor fans. Since May of this year, the Bitcoin futures price (letting the closing price of May 3rd 57765=100) and the trading contract (letting 6457 trading contracts on May 3=100) have shown obvious changes. The former has risen in shocks. The latter rose slowly.

The overseas cryptocurrency trading market is being regulated during rectification

Cryptocurrency is becoming more and more popular with investors.

Just like the Internet companies at the beginning of the new century, investors don’t care whether startups have cash inflows. On June 9, the cryptocurrency startup Solana Inc. Easily raised US$314 million for the development of a faster blockchain; on June 10, the French company ledger (Ledger, cryptocurrency security) raised US$318 million. After several rounds of financing, the company’s market value reached US$1.5 billion. On July 8, Circle Internet Finance issued US dollars and plans to go public on a backdoor Concord Acquisition (Concord Acquisition). The market value is expected to reach 4.5 billion US dollars. On July 20th, after the latest round of US$900 million in financing, the market value of the cryptocurrency exchange FTX reached US$18 billion (currently it has reached US$25 billion). The big beneficiaries include SoftBank Group, Silicon Valley venture capital firm Sequoia Capital, and private equity. Fund third point (Third Point). On August 12, the cryptocurrency Tether (USDT) disclosed that its huge reserves of US$63 billion were invested in various investment-grade commercial papers. On August 18, Coinbase , the largest cryptocurrency exchange in the United States, has prepared a cash reserve of 4 billion U.S. dollars to deal with stricter regulatory requirements and cryptocurrency risks. On August 23, Visa announced its entry into the non-copyable token (NTF, unique digital asset) market, which Facebook has already set foot in. On September 10, the Swiss Stock Exchange was approved to establish a digital exchange that will use distributed accounting technology to record transactions. On September 14, private equity tycoon and New York Metropolitan boss Cohen announced that he would invest in Bitcoin Quantum Exchange Radkl. On October 6,, an investment platform under Public Holdings, will launch bitcoin transactions. In order to prevent criminal activities using cryptocurrency, Elliptie obtained 60 million US dollars of new capital to prepare a cryptocurrency risk management venture capital company.

Cryptocurrency exchanges are also being regulated during the rectification. On June 26, the United Kingdom and Japan asked Binance, the world’s largest cryptocurrency exchange, to close its local business, claiming that Binance was not allowed to conduct regulatory financial services locally. On July 30, Binance announced that it would gradually close its cryptocurrency futures or other derivatives business in Germany, the Netherlands, and Italy and stop opening new trading accounts; on August 9, Binance announced that it would no longer open futures for Hong Kong users Account. On September 27, Huobi International announced its withdrawal from the Chinese market. In terms of market penalties, on August 10, the Bitcoin exchange BitMEX paid a $100 million fine to the US Securities Regulatory Commission to end the lawsuit due to the illegal sale of bitcoin derivatives and poor anti-money laundering compliance management. On September 1, the US Securities Regulatory Commission sued BitConnect and its founder for allegedly $1.2 billion in cryptocurrency fraud. On September 10, the US Securities Regulatory Commission blacklisted Bitcoin exchange Suex.

At the same time, Bitcoin’s trading channels and market liquidity have been significantly broadened and improved. In 2021, many online payment institutions including VISA, Stripe, Venmo, Square, and PayPal will begin accepting cryptocurrency payments represented by Bitcoin, and will strengthen their cooperation with Coinbase, Fold, and other digital currencies that have obtained regulatory approvals and are subject to supervision. The close cooperation of the platform allows customers to choose to pay in cryptocurrency when buying and exchanging digital currency.

Diversification of transaction subjects

The investor structure of the US financial market is undergoing unprecedented revolutionary changes, and social media has played an important role. The influence of the Wall Street celebrities on the market is declining, and the social media traffic stars have super influence, enough to scare the traditional forces of Wall Street. The retail investor revolution has caused the big coffee to suffer.

Elon Musk has 55 million followers on Twitter (June 3), while Coinbase has only 68 million certified users. Kather Wood is hailed as the leader in investing in Meme stocks (referring to stocks with low stock prices but more discussed in social). Millions of her followers follow her on Twitter in real time and imitate her investment. Robinhood Markets Inc. and Reddit forums, which provide free trading services, have boosted the stock trading activities of the majority of retail investors. Although Trump has stepped down as the presidency, his social media fans have reached more than 80 million, and he has a huge influence in the Republican Party. Trump Media and Technology Group under Trump’s company acquired DWAC Digital World Acquisition Company, which caused DWAC’s share price to skyrocket from $9.97 on October 7 to $83.86 on October 25 (all closing prices), completely subverting The principle of Wall Street stock pricing. Decentralized finance is reshaping the structure of the world financial market.

From the perspective of trading entities in the cryptocurrency market, its structure has quietly undergone profound changes. At the company level, cryptocurrency is recognized by more and more companies. Companies such as Microstrategy, GrayScale, Tesla, and Galaxy Holdings hold more bitcoins. There are market rumors that giant companies such as Amazon and Walmart are planning to hire bitcoin experts.

According to relevant data from the Bitcoin treasuries website, on October 25, the number of listed companies holding bitcoins in the world increased to 38, with a total of 202,477 bitcoins held. Deloitte often publishes articles in the media to encourage companies to use cryptocurrency. On June 10th, Coinbase announced a partnership with ForUsAll Inc (forUsAll Inc, a $1.7 trillion retirement fund management company) to use 5% of the retirement funds managed by the latter for cryptocurrency investments. Many financial advisory institutions recommend Bitcoin to investors as a hedge against portfolio risk. There are more and more private equity funds investing in cryptocurrencies, including Proshares, VanEck, Valkyrie and Galaxy Digital. The basic operating method of these companies is to move quickly and open up the situation, first lay out new products to quickly acquire customers, and then consider compliance management issues.

In the retail market, many individual investors in the United States are also eager to enter the cryptocurrency market. In order to circumvent regulation, some investors purchase cryptocurrencies through offshore financial centers. According to reports, some individuals use encrypted assets as collateral to purchase large products such as houses and cars, or lend their USD stablecoins to others for profit.

The biggest promoter of the retail market is Elon Musk, whose social media comments often cause Bitcoin to rise and fall sharply. On June 28, Mexican billionaire Shalinas Pirigo issued a message to encourage people to buy bitcoin, and the bank he controlled began to accept bitcoin as payment. Even in Mississauga, Canada, Bitcoin trading stores have appeared on the streets next to dentists, Pizza Hut or Vietnamese restaurants. The advantages of Bitcoin can be reflected in the practice of El Salvador, a small country in Central America. The country’s economic development lags behind and has suffered from inflation for a long time. On August 26, it officially adopted Bitcoin as its legal tender. In the suspicion of the world, the proportion of the population with bank accounts in the country soared from 30.4% to 46.15% within four weeks. Bitcoin’s financial inclusion characteristics are fully reflected.

Market risk remains high, investor safety is the focus

Bitcoin is the largest cryptocurrency, and its market value is close to US$2 trillion, which is much larger than Ethereum (US$490 billion), Bien coin (US$81.2 billion), Aidaicoin (US$70.9 billion), and stablecoin Tether (USDT, 69.6 billion U.S. dollars) and other cryptocurrencies. To some extent, cryptocurrency regulation is the regulation of Bitcoin.

The most controversial is the economically meaningless energy consumption and high pollution caused by Bitcoin mining. Many Bitcoin mining companies have been committed to reducing consumption and emissions, and some companies plan to use hydrogen or nuclear energy for mining. However, these statements will not be recognized by fund companies that value environmental, social and corporate governance principles, and many governments may not believe them. Chinese government agencies repeatedly said that the fight against Bitcoin mining and trading activities, prohibit banking institutions to provide virtual currency trading services, and closed the bitcoins, Lai Bite ( BTC many .TOP) and other mining companies.

The Bitcoin market is extremely risky, and the issue of investor protection brooks no delay. Cryptocurrencies are opaque and easily manipulated, which encourages speculation. In the trading market, large customers have a monopoly position. They hold currency for a long time and have a large position. When the price is right, they will reduce their positions to make a profit, and then absorb them when the price is low; customers with a holding period of less than one year will wait for opportunities. Due to the relatively strong capital, the profit opportunity is relatively large; the trading investors are in a disadvantageous position, and their operating strategy is fast in and out, but the market is volatile, and it is difficult for them to seize the opportunity and the chance of profit is small. Trading, making money, and profit strategies often backfire, and therefore bear greater risks, which is the so-called “cut leek.” Moreover, accidents often occur in the Bitcoin trading system. For example, the price of Bitcoin crashed 17% on September 7 and 87% crashed on October 21 (Binance Exchange).

In order to cope with the erosion of legal currency and financial security by virtual currencies, regulatory agencies in various countries have introduced increasingly stringent regulations involving financial stability, consumer protection and public safety to combat speculative trading activities in Bitcoin and strictly supervise encryption. Currency ecosystem, rectify the chaos in the crypto market. With the increasing standardization of the encryption market and the iterative upgrade of information technology, it is more difficult to moderately regulate operations.

The Bitcoin market has always been related to the attitude of the US Securities Regulatory Commission. The Chicago Mercantile Exchange Group started bitcoin futures trading on December 18, 2017. The major good news pushed bitcoin from US$975.7 on March 25, 2017 to US$20,809 on December 17, 2017. This round of rise is still directly related to the Bitcoin futures ETF. Even in July of this year, the US Securities Regulatory Commission was noncommittal on Bitcoin ETFs, only that it wanted to solicit public opinions. The focus question is whether Bitcoin ETFs are safe for investors. This puts the SEC in a dilemma. On August 3, Gary Kinsler (Democrat), the chairman of the US Securities Regulatory Commission, stated that the Securities Regulatory Commission can accept Bitcoin futures ETFs, which is equivalent to a compromise. Because Bitcoin futures has been approved for a long time, there is no legal problem with the Bitcoin futures ETF.

In fact, the US Securities Regulatory Commission is facing tremendous pressure from the financial services industry. The cryptocurrency industry strongly opposes the federal government’s collection of cryptocurrency taxes to supplement the infrastructure investment plan proposed by the Biden administration. The European banking industry has obtained better economic benefits in the cryptocurrency business, prompting the U.S. banking industry to resolutely oppose regulators to increase the level of capital in the cryptocurrency assets held by banks. Fund companies are increasingly calling for Bitcoin ETFs, and many influential fund companies in the industry have once again proposed the establishment of Bitcoin ETFs. On October 1, the Biden administration stated that it would supervise stablecoins in accordance with the banking institution model; Fed Chairman Powell stated that the United States has no plans to ban cryptocurrencies. On October 4, many listed companies asked the Financial Accounting Standards Board (FASB) to formulate accounting rules regarding Bitcoin assets and transactions related to the environment, society, and governance. On October 14, Coinbase asked regulators to formulate clear rules involving cryptocurrencies as soon as possible. The final approval of the US Securities Regulatory Commission is not that they understand the cryptocurrency market or are familiar with the development of decentralized finance, but are more or less a choice under pressure.

Bitcoin price recent changes forecast

Bitcoin futures ETF is the product of various parties’ struggles, but it does represent the attitude of US regulators. Cryptocurrencies represented by Bitcoin are meeting the urgent needs of the development of decentralized finance (blockchain): more powerful price discovery functions; higher transparency; risk management tools urgently needed by cryptocurrency holders; but eager to enter the market A group of investors who do not have a Bitcoin wallet. Bitcoin futures ETFs are completely different from Bitcoin ETFs. Bitcoin futures are strictly limited by exchange holdings: 4000 contracts for the spot month, and no more than 5000 contracts for any month except the spot month. Proshares Bitcoin Strategy ETF holds 1,679 contracts in October and 2,133 contracts in November. This means that the fund must convert the expiring October contract into a November or December contract, and transaction costs will increase accordingly. This is why many institutions are scornful of Bitcoin futures ETFs, suggesting that it is better to buy Bitcoin directly.

The return of Bitcoin futures ETF to investors is the last word, so the fund’s ability to grasp opportunities in the Bitcoin trading market is the key to the future development of the fund. The analysis of Bitcoin trends cannot be based on traditional financial asset value estimation methods, and other factors need to be taken into account. In the near term, as more Bitcoin futures ETF funds are listed and traded, investors’ enthusiasm for funds will cool down, and trading strategies will become more rational. Although some institutions predict that the price of Bitcoin will reach US$100,000 at the end of this year, if history can be used for reference, considering that a large number of Bitcoin profits will flow out, Bitcoin will enter a relatively stable period, between 75,000 and 41,000. Fluctuations between the US dollar are relatively normal.

Secondly, due to the high speculative nature of bitcoin trading, the weekly volatility of bitcoin in 2021 will remain between 52% and 129%. At the current high level, bitcoin investors are extremely sensitive to price changes. Unlike other cryptocurrencies, the sole purpose of the Bitcoin blockchain is to issue currency to counter sovereign currencies, while other cryptocurrencies serve the application of the basic blockchain.

Finally, changes in the market environment will affect Bitcoin price trends. After all, in the current financial ecological environment, Bitcoin is bound to be deeply affected by the trend of the stock market and bond market. For example, the Fed’s routine meeting on November 2-3 will discuss whether to reduce the asset purchase plan; the US Department of Labor announced on November 5 The non-agricultural employment situation of the United States; the trend of the 10-year Treasury bond in the United States has now stabilized at 1.6%, and the next change is extremely important.

Posted by:CoinYuppie,Reprinted with attribution to:
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