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Institutional Capital Growth Outpacing Retail in Crypto

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Satoshi&Co Daily Crypto Newsletter

July 2 · Issue #205 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as our recently-launched podcast series with leading crypto industry participants at our newly-launched website www.satoshiand.co

Today, we look at some of the underlying reasons behind the sudden run up in the prices of bitcoin last week. 
Crypto Hedge Funds Jumping In…
One of the predominant drivers of bitcoin’s recent run up was increased buying activity from institutional investors. A leading crypto exchange focused on institutions registered a record trading volume of $5 billion in the month of May as institutional trades, primarily from Asia, surged in volume. A significant chunk of these trades involved flipping altcoins into bitcoin, in addition to the inflow of capital that went into bitcoin. Moreover, the daily trading volume for bitcoin futures on CME, a reasonable proxy for institutional activity in crypto trading, has more than doubled from its daily average on the 26th and the 27th of June. BTC has risen by more than 30% to reach approx. $14k over the same period.   
CME Bitcoin Futures Daily Trading Volume (In BTC). Source: cmegroup
CME Bitcoin Futures Daily Trading Volume (In BTC). Source: cmegroup
Subdued Retail Participation…
In our Friday edition last week we briefly touched upon subdued retail participation in the recent rally, as compared to the 2017 run up. This was evidenced by the relatively flattish trading volumes on localbitcoins.com over the period when bitcoin has risen sharply from $8k to $14k in a matter of days. Recent Google trends data provides further support to our assertion as the search interest for Bitcoin has not really spiked up in recent weeks in conjunction with the corresponding price increase. 
Google Search Trends for "Bitcoin"
Google Search Trends for "Bitcoin"
Tether Manipulation…
Similar to the last run-up, one reason that was attributed to the flash rally was Bitfinex’s printing of USDT (Tether) to pump up prices of bitcoin on its exchange. There seems to be some merit to that claim as the number of USDT tokens printed has increased substantially to 500 million USDT tokens per month, resulting in the total outstanding supply rising from 2.5 billion tokens in the first week of April to over 3.6 billion tokens last week. 
USDT Outstanding Supply Data. Source: stablecoinindex.com
USDT Outstanding Supply Data. Source: stablecoinindex.com
Meanwhile in Crypto Wonderland....
“Gemini To Apply For a Broker-dealer License”
The Winklevoss-owned cryptocurrency exchange Gemini will apply for a broker-dealer license from the Financial Industry Regulatory Authority (FINRA), CoinDesk has learned. This is the first step toward becoming an approved Alternative Trading System, where customers can lawfully swap digital securities. Gemini previously partnered with the tokenized securities platform Harbor, which allows institutional investors to buy securities with Gemini’s GUSD stablecoin and to also receive dollar-denominated dividends via GUSD. It stands to reason that Gemini would also want to facilitate the trading of such securities on its own platform.
“Over 100 Libra-related Fake Domains Registered”
Cyber threat intelligence firm Digital Shadows has discovered over 100 fake domains registered relating to Facebook’s forthcoming stablecoin Libra, the Independent reported on July 1. As of June 19, researchers at Digital Shadows had found over 100 domains registered relating to Libra and several dozen referring to the associated digital wallet Calibra, with some of them containing malicious content. The firm divided the websites into two groups — those impersonating Libra’s official website, and those promoting scams.
“Crypto Data Center In Colorado Comes Under Scrutiny”
A planned cryptocurrency data center in Colorado is being criticized because it will potentially violate local renewable energy goals. The center is expected to cost some $100M. AX2 Data Centers is constructing a new data center in Pueblo, Colorado, expected to be finished by the end of 2019. However, the idea is coming under fire from locals for not matching sustainable energy standards. The company reached a deal with the state exchanging energy subsidies with a promise to create jobs. Last year, the state passed a law that allowed companies to have discounted electricity if they promised to create “economic development.”
“Russia Won’t Ban Facebook’s Libra”
According to local reports, Russia will not go out of its way to ban Libra, a crypto asset created by the Libra Association, an international consortium started by Facebook. Alexei Moisseev, the deputy finance minister of Russia, told publications that a legislative framework for crypto assets will soon be formed and Libra is likely to fall under it. For many years, analysts anticipated Russia to release a regulatory framework for crypto assets and blockchain-related entities following the order of Russian President Vladimir Putin in February to adopt regulations for the crypto sector. Further, Moisseev’s statement directly contradicts a recent state press report that suggested Libra will be outlawed.
Tweet of the Day
Ivan on Tech
Bitcoin is currently trading at $76k in Zimbabwe.
A 600% premium compared to international prices.

People are DESPERATE to financially exit their corrupt and hyperinflated currency.

The world desperately needs Bitcoin!!!
5:37 PM - 1 Jul 2019
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