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Institutional interest in crypto derivatives; Friday metrics watch

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Satoshi&Co Daily Crypto Newsletter

September 27 · Issue #236 · View online
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CME’s decision to list BTC options in 2020 signals the strong growing interest among institutional investors for crypto derivatives. As one of the leading regulated exchanges for institutional investors, CME’s data gives valuable insights into how institutional managers are positioning themselves in the volatile BTC market.
Source: dcresearch
Source: dcresearch
When exploring CME BTC futures COT data, starting from 1st of January 2019, it’s clear that leveraged funds had significant long positions during early 2019 reaching 3417 contracts on January 15th. Leveraged funds reached new highs again in July 2nd, gaining 3253 contracts. Nonreportable positions (banks) were another segment with sizeable long positions, accumulating through first, second, and third quarters. Asset managers increased their long positions during Q2-Q3 after a quiet first quarter.
Source: dcresearch
Source: dcresearch
Leveraged funds had substantial short positions throughout 2019 so far, peaking during early July (9.7) with 3730 contracts. Non-reportable and asset manager short positions were relatively low, respectively. Other reportables peaked on June 25th with 1967 contracts.
Source: dcresearch
Source: dcresearch
Notably, the net positions data shows nonreportable positions (banks) having noticeably bullish positions on bitcoin, recording well above 1000 contracts from early Q2 to the present day. However leveraged funds and other reportables remained quite heavily net short. Asset managers were relatively bullish during late Q2 and early Q3, peaking at 359 contracts on June 11th.
Onto our Friday metrics watch…
Ethereum Locked in DeFi
MakerDAO still accounts for a lion’s share of ETH locked up in collateral, with more than 1.53 million of ETH locked up. Compound and Uniswap showed a strong w/w growth of 10% and 24% respectively in ETH locked up, while Augur remained flat w/w.
Lightning Network Growth:
Capacity per channel fell by 1% w/w. The total number of nodes increased w/w by 1%, and the total number of channels was flat w/w.
(For reference, some previous articles on LN, here).
DEX Tracker:
Trading volumes on DEXs have increased on a w/w basis, with the average daily trading volume averaging 35k ETH for this week. IDEX remains the biggest DEX in terms of trading volume and DAI is the highest traded cryptocurrency on DEXs.
(For reference, some previous articles on DEXs, here and here).
Crypto Loans Tracker:
Compound Loans:
Total loans issued on Compound for the last week stands at approx. $5.2 million for the week, a modest increase from $5.7 million in the previous week. WETH is the most borrowed cryptocurrency on Compound followed by DAI and BAT.
dYdX Loans:
Total loans issued on dYdX for the last week stands at approx. $14M for the week, a 200% increase from $5.6M last week. DAI is the most borrowed cryptocurrency on Compound followed by WETH and USDC.
MakerDAO Loans:
DAI loans issued on MakerDAO for this week stand at ~$4.9M, a 50% decrease from $8.8M last week. The total outstanding DAI debt currently stands at ~$86 million.
(For reference, some previous articles on MakerDao, here and here).
You can also check out last week’s Metrics Watch here.
Meanwhile in Crypto Wonderland....
“Binance To Launch A Crypto Staking Platform”
Major cryptocurrency exchange Binance has launched a dedicated staking platform, according to a company announcement published on Sept. 26. The new service will enable Binance users to deposit their token holdings and earn staking rewards, but without having to set up their own nodes to fulfill minimum staking amounts and/or time lengths. In blockchains that use a Proof-of-Stake (PoS) system — as opposed to Proof-of-Work (PoW) like in Bitcoin — nodes in the network engaged in validating blocks, rather than mining them.  A deterministic algorithm selects block validators based on the number of tokens a given node has staked in their wallet — i.e. deposited as collateral in order to compete to add the next block to the chain.
“Harbor Receives License From FINRA”
Harbor Square Investments, a subsidiary of tokenized securities platform Harbor, has received a broker-dealer license from the Financial Industry Regulatory Authority (FINRA), company executives told CoinDesk on Friday. The move breaks a lengthy standoff between aspiring crypto broker-dealers and the U.S. regulators who approve them. For more than a year, the Securities and Exchange Commission (SEC) and FINRA slow-walked Harbor’s and roughly 40 other crypto firms’ applications, voicing concerns that the digital assets they trade causes investors undue risk. Broker-dealers can buy and sell securities on their own and on their clients’ behalves. In the crypto space, a broker-dealer who treats digital assets as securities could bring market them to institutional investors. But they face strict requirements from the SEC and FINRA.
“Animoca To Develop MotoGP Crypto Game”
ASX-listed games maker Animoca Brands is to develop a MotoGP-branded race management game. In a press release on Thursday, Animoca said the freshly inked deal gives it a three-year global licensing agreement with MotoGP rights holder Dorna Sports to develop and publish the game and related digital collectibles. The firm also revealed that it’s raised 1 million Australian dollars (over US$676,000) to fund the game’s development and other “business opportunities.” Investors included Moses Tang, founder of AP Capital and founding chairman of Goldman Sachs Asia Pacific, as well as Animoca co-founder and chairman Yat Siu, subject to shareholders’ approval.
“RSK Acquires A LatAm Social Network”
IOVLabs, the startup behind the Bitcoin-powered smart contracts platform RSK, today announced the acquisition of Taringa, one of the largest social networks in Latin America. Taringa, which launched in 2004, is something of a pioneer in the world of social networking. The company predates Facebook and Twitter and currently boasts more than 70 million monthly visitors and 17.5 million registered users. In less than a decade, the network managed to position itself as the third-most popular social network in Latin America, and the second largest in Argentina, according to data from ComScore.
Crypto Twitter Pick
Misir Mahmudov
There are 36 million millionaires in the world

And only 21 million bitcoins, ever.

That is all.
What We Are Reading / Listening To
Overnight Performance of Top 10 Currencies
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