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Biggest Crypto Hedge Funds and What They Tell About the Market

Biggest Crypto Hedge Funds and What They Tell About the Market

Who are the biggest hedge funds operating in crypto today and how much do they have invested in crypto and blockchain firm

Biggest Crypto Hedge Funds and What They Tell About the Market

The total market cap for all cryptocurrencies stands at $293 billion, and while much of this value has been generated by individual traders buying and selling their own private stashes of crypto,

it's also largely the result of big investment funds. These are companies that have crypto assets under management worth as much as $1 billion or upward, with most of them qualifying as the whales the cryptocurrency community often talks about after every market movement. Yet, aside from simply trading Bitcoin, Ether or many other cryptocurrencies, funds also often invest venture capital (VC) in blockchain — and crypto-related startups. This makes them doubly important for the growth of the cryptocurrency industry, given that they support not only the currencies of the future, but also the platforms and companies that will harness these currencies to build entirely new financial ecosystems. That said, most of funds have been backed by traditional venture capital, such as Andreessen Horowitz and Sequoia Capital. So, even though they are supporting the emergence of the new crypto economy, it will be one that will have strong, foundational links with the financial system — something many in the community think crypto will replace.

The top five

Obtaining reliable, standardized data on the assets under management of each major crypto fund is very difficult, if not impossible. Accordingly, this top five doesn't claim to be completely authoritative, given that it gleans available data from a variety of sources published at a variety of times. Nonetheless, it provides a fairly robust account of the five firms that are most likely the biggest funds operating in crypto today, in terms of digital assets under management and investments in crypto-related startups.

Digital Currency Group/Grayscale Investments

Digital Currency Group was founded in 2015 by Barry Silbert, who had previously invested in such early cryptocurrency companies as Coinbase, Ripple and BitPay. It already has invested in nearly 130 crypto-related projects, with the average size of seed rounds it was involved in between 2016 and 2018 being $3.24 million. Given that it has more investments than pretty much every other fund in the industry, it will be no surprise to hear that it has backed some of the most well-known crypto projects and companies, including Circle, Chainalysis, Blockchain, Shapeshift, Parity, Ledger, Luno, Kraken, Korbit and eToro.

One of its investments is Grayscale, a subsidiary of Digital Currency Group that invests directly in cryptocurrencies and digital assets. Grayscale announced in its Q2 2019 financial report that it had assets under management (AUM) worth $2.7 billion. As an indication of just how volatile the AUM figure can be, it also revealed that this number had tripled since the first quarter of 2019, with its dedicated Bitcoin Trust having increased 300% compared to the same time last year. More revealingly, Grayscale's latest report also detailed how most demand for crypto investment comes from institutional investors — who have represented 84% of its client base since July 2018. As such, it's clear that, far from being a grassroots-based, decentralized ecosystem, crypto is already driven very much by big business and big money.

Polychain Capital

Founded in 2016 by cryptocurrency investor Olaf Carlson-Wee, Polychain Capital is another crypto-focused hedge fund that nonetheless has backing from noncrypto venture capitalists. Back at the end of 2014, it was reported that its AUM totalled $591.5 million, having plunged from a high at the end of 2017 of around $1 billion. However, data from Crypto Fund Research states that, as of June 2019, it has $967 million of cryptocurrency under management. As with most other major funds, it also invests in blockchain- and crypto-related startups, with its tally of investments coming to 37 (according to Crunchbase). These include Coinbase, Kik, Celo and dYdX, which Polychain has been able to invest in thanks largely to the raising of around $175 million for its venture capital fund at the end of 2018. One thing that's worth noting about Polychain Capital is that it has received significant backing for its venture capital and crypto funds from major VC firms. In 2017, it closed a $200 million funding round in which Sequoia Capital, Andreessen Horowitz and Union Square Ventures all participated. It is, therefore, as much a product of traditional finance as it is of the new cryptocurrency ecosystem.

Pantera Capital

Initially founded in 2003 and based in San Francisco, Pantera Capital was once a traditional investment fund, although it shifted its focus in 2013 to cryptocurrencies and blockchain projects. According to a range of estimates, it has assets under management worth anything from $335 million to $724 million, although this may have fluctuated in recent months. It has also invested a considerable sum in 72 crypto-related startups and projects, with it having raised at least $200 million in total from outside venture capital in order to fund such investments ($13 million in 2016, $25 million in 2017, and $175 million in 2018-2019).

Pantera Capital has backers from outside the cryptocurrency industry, which is significant insofar as it indicates not only mainstream interest in crypto but also the possibility that it may feel some kind of indirect pressure to invest in projects that would be more pleasing to its financial backers. As for Pantera Capital's general outlook, it may come as no surprise to hear that the fund is very bullish on the future of cryptocurrency and blockchain. In July, its CEO and founder, Dan Morehead, predicted that Bitcoin may hit $42,000 by the end of year and that it could climb as high as $356,000 in a couple of years. Despite this confidence, Pantera Capital is no stranger to setbacks. For instance, it admitted in December 2018 that it could be forced to pay refunds and fines for around 25% of its initial coin offering portfolio, given that roughly this proportion of the portfolio is likely in violating American securities laws. Similarly, during the 2018 bear market, its digital asset fund (i.e., its cryptocurrency fund) lost around 77% over the first 10 months of that year.

Galaxy Digital

Launched in New York City in 2018 by former Goldman Sachs partner Michael Novogratz, Galaxy Digital is another hundred-million-dollar crypto hedge fund. As of the end of June 2019, its total assets under management is $393.3 million, having dipped from May's total of $421.6 million. During 2018, the fund posted a net loss on its balance sheet of $272.7 million, largely because of the bear market and crumbling crypto prices. In addition to investments in cryptocurrency, Galaxy Digital has also invested in around 20 crypto-related projects, including Bakkt, BlockFi, Ripple, Block.one, BitFury, BitGo and Bitstamp. As with the other funds on this list, such ventures have been made possible by investments from noncrypto backers. That's because when Galaxy Digital launched in January 2018, it had not only $400 million of Novogratz's own capital but also raised a further $200 million by floating the company on Canada's TSX exchange.

Andreessen Horowitz

While it's focused mostly on companies operating outside of the cryptocurrency sector, Andreessen Horowitz established its own crypto investment fund, called a16z. As of writing, a16z claims that its fund is worth $350 million, while back in June 2018, when it was launched, the total came to $300 million. This is a big figure in the context of the crypto industry, but compared to the $7 billion in assets that Andreessen Horowitz manages in total, it seems a little more modest. However, it's likely that the value of a16z has increased since May. More importantly, however, is the fact that a massive investment fund with $7 billion in AUM is also interested in crypto, which is a significant vote of confidence for the industry.

This vote of confidence doesn't derive only from direct investment in cryptocurrencies, however. Andreesseen Horowitz and a16z have also thrown venture capital at a range of cryptocurrency startups, spanning Coinbase, Maker, Filecoin, dYdX and CryptoKitties. For example, in August 2018, the fund, together with Polychain Capital, invested $105 million in blockchain-based cloud startup Dfinity, having already contributed a combined $61 million in a previous round in February of that year. Even forgetting a16z, Andreesseen Horowitz is therefore heavily invested in the cryptocurrency industry and is one of the biggest funds operating in the space today. More encouragingly, recent events indicate that it wants to involve itself even more heavily in the sector — as in April of this year, it announced plans to restructure its entire business and register its employees as financial advisors. The reason? This would provide it with the legal basis to engage more in riskier ventures, such as cryptocurrencies.

The rest

Of course, these aren't the only big investment funds operating in crypto to the tune of hundreds of millions of dollars. Others include:

  • Union Square Ventures, which has around $256 million of cryptocurrency assets under management, according to Crypto Fund Research.

  • Blockchain Capital, which launched in 2018 and raised $150 million for its new fund in March 2018, bringing its total AUM to $250 million.

  • IDG Capital, which launched in China in 1992 and invests in noncrypto as well as crypto assets, and has $210 million digital assets under management.

  • BlockTower Capital, which launched in 2017 and has around $130 million in AUM (as of December 2018).

  • Boost VC, a California-based fund that launched in 2014, which has $95 million in AUM.

  • Fenbushi Capital, a China-based crypto fund that had $50 million in assets under management in early 2018.

These aren't the only significant funds working in the crypto industry. However, in a rigorous study published in May 2019, PwC and investment firm Elwood concluded that the vast majority of cryptocurrency investment funds are in fact pretty small.

For instance, the survey found that more than 60% of 150 active crypto hedge funds have less than $10 million in AUM, with only 10% of these funds managing more than $150 million. It also found that the average crypto fund’s AUM is only $21.9 million, indicating that, despite a few big fish, much of the sector is populated by smaller firms trying to capitalize on the cryptocurrency market. More disconcertingly is that the report also notes a lack of independent governance in the average fund, given that only 25% have boards with independent directors, something that may be risky in cases of emergency, when clear, cautious decisions are needed. Similarly, over 90% of crypto hedge funds don't use third-party research, suggesting that they suffer from a deficit of external, objective input.

Still, while this might indicate that the crypto hedge fund sector is immature and vulnerable, there was a pronounced increase in crypto hedge funds and the assets under their management in 2018, according to Morgan Stanley research. In 2014, for instance, there were only 31 such funds, while there were 220 by November 2018. More impressively, these funds had $7.1 billion in assets under management in July 2018, driven largely by demand and involvement from institutional investors. It is for this reason that it would be unwise to predict that the importance and presence of crypto funds won’t grow even further in 2019 and the years to come. As the foregoing overview has shown, they function as an indispensable medium between big institutional investors and the nascent cryptocurrency industry. This means that the more they grow,

Article Produced By
Simon Chandler

Simon Chandler is a journalist based in Hove, UK. He writes mostly about technology, with his specialties including cryptocurrencies, AI, VR, and social media. He also occasionally writes about politics, culture and music, and has contributed to the likes of Wired, the Daily Dot, the Verge, Computer Weekly, Techcrunch, Bandcamp Daily, the New Internationalist, the Kenyon Review, and Tiny Mix Tapes

https://cointelegraph.com/news/biggest-crypto-hedge-funds-and-what-they-tell-about-the-market

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UK Accused of Allowing Billions in Crypto Fraud in its Indian Ocean Colony

UK Accused of Allowing Billions in Crypto Fraud in its Indian Ocean Colony

Chagos Islanders Seek Restitution of Popular .IO Domain

British Indian Ocean Territory is best known for the secretive US naval base on Diego Garcia Island but is also home to the top level domain .IO that is popular with crypto asset and technology companies. The United Nations General Assembly, African Union, and International Court of Justice have found that Britain’s deportation of the Chagos Islanders a generation ago and continued occupation of the Chagos Archipelago (British Indian Ocean Territory) is unlawful and a serious violation of international law. According to the Complaint the British have stubbornly refused to vacate the Chagos Archipelago not only due to the presence of the US naval base but because billions of dollars in covert financial transactions are at stake.

In 1997 a secret agreement with the British Crown resulted in the creation of the top level domain country code .IO (ccTLD .IO). .IO was a relatively low key alternative domain until about 2016 when its popularity exploded in connection with the rise of cryptocurrency. In 2017, the company administering .IO was sold for $70 million to internet giant Afilias Ltd. which is the world’s second largest Internet domain name registry. The Chagos Islanders are now seeking restitution and return of .IO which has made the Chagos Archipelago one of the world’s least known but largest offshore financial centers by daily dollar volume. A complaint has been filed with the African Commission of Human & Peoples’ Rights (the Banjul Court) which has jurisdiction over the Chagos Islands and the issues of recovery and restitution.

According to Dr. Jonathan Levy, the international lawyer representing the Chagos islanders, while .IO is utilized by legitimate companies, it is also remarkable for crypto asset based criminal operations: Ponzi and pyramid schemes, High Yield Investment Platforms, and fraudulent Initial Coin and Token offerings. Dr. Levy explains: “The criminals know there is zero law enforcement in the British Indian Ocean Territory, they use only cryptocurrency, they need no address besides a .IO domain and crypto wallet to commit crimes like fraud, money laundering and extortion.” Dr. Levy estimates tens of billions of dollars a day in unregulated crypto asset transactions take place in .IO involving hacking, tax evasion, money laundering, fraudulent investment schemes, gambling, terrorism and organized crime financing including the well-known crypto scams OneCoin and USITech.

Article Produced By
Dr. Jon Levy

Dr. Jon Levy is a solicitor who specialises in transnational law and private international law. He has represented the former president of the Republic of China, Chen Shuibian, the former Deputy Prime Minister of Yugoslavia, and numerous African entities and political figures. He has been engaged by clients against the US Office of Foreign Asset Control (OFAC), CIA, US Army, and UK Cabinet. As a litigator he specialises in transnational asset recovery and has taken up cases against the Vatican Bank, UBS AG, the Swiss National Bank, Emaar Corporation, and many others.

https://thebitcoinnews.com/uk-accused-of-allowing-billions-in-crypto-fraud-in-its-indian-ocean-colony/

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BTCS Crypto Portfolio Expands Over 280% in Q2 2020 Amid COVID-19 Pandemic

BTCS Crypto Portfolio Expands Over 280% in Q2 2020 Amid COVID-19 Pandemic

While many institutions struggled to recover from the market downturn

experienced in March, publicly-traded, blockchain-focused firm BTCS Inc. (OTCQB: BTCS) has increased its portfolio by 285 percent in Q2 2020, through well-timed investments in both bitcoin (BTC) and ether (ETH), and crossed the $1 million mark for cryptocurrency assets under management (AUM). Following the positive growth performance seen in Q2 2020, BTCS is reportedly eyeing further growth and systemic diversification of its cryptocurrency holdings. However, BTCS said its investment strategy will only focus on cryptocurrencies which it believes are not securities.

Timely Crypto Purchasing Catapults BTCS Portfolio Valuation

At the end of June 2020, the BTCS crypto portfolio stood at a total value of $1.02 million with sizeable positions in BTC and ETH. Having elected not to add further investments to its portfolio, BTCS navigated the massive decline in cryptocurrency prices seen in mid-March. With the World Health Organization (WHO) classifying the novel coronavirus as a pandemic on March 11, panic spread through both the crypto and broader financial space. By the following day, both markets were seeing a cascade of forced selloffs as traders sought liquid cash in preparation for the inevitable lockdowns.

By holding off from adding to its crypto investments during the first quarter of 2020, BTCS safeguarded its balance sheet from the decline seen on Black Thursday. Bitcoin fell to $3,867 in a matter of hours as token selloffs triggered forced liquidations across several derivatives exchanges, including BitMEX. The entire crypto market capitalization shrank by about 50 percent. During Q2 2020, BTCS added 33.7 BTC and 1,319.6 ETH to its crypto holdings. In total, the company’s cryptocurrency exposure rose to 54.3 BTC and 2,304.6 ETH. Since March 12, bitcoin is up almost 150 percent with its Q2 performance standing at 50 percent. In U.S. dollar (USD) terms, BTCS’s crypto holdings grew, primarily from accumulation, from less than $300,000 at the end of the first quarter of 2020 to over $1 million by the end of Q2 2020, representing a 285 percent increase.

Portfolio Diversification And Other Future Plans

Having successfully navigated the pitfalls in the crypto market during the first half of 2020, BTCS is reportedly looking toward expanding its cryptocurrency portfolio. However, given the mixed fortunes of other institutions since the onset of COVID-19, BTCS says it will adopt a carefully measured approach to its portfolio diversification plans. BTCS is also looking to acquire controlling interests in businesses in the blockchain industry. Recent reports by Deloitte and LeadBlock point to increasing enterprise adoption of the novel technology with over a third of organizations across the world utilizing the emerging technology in their operations.

Article Produced By
CryptoCompare

https://www.cryptocompare.com/portfolio/guides/btcs-crypto-portfolio-expands-over-280-in-q2-2020-amid-covid-19-pandemic/

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US DoJ Charges Group of Individuals Who Stole $2.5 Mln in Crypto Via SIM Swapping

US DoJ Charges Group of Individuals Who Stole $2.5 Mln in Crypto Via SIM Swapping

The U.S. Department of Justice announced that a group of hackers might face over 100 years in prison after stealing $2.5 million.

The United States Department of Justice released a fifteen-count indictment on May 9 that charges a hacking group

labeled “The Community” with SIM swapping in order to steal cryptocurrencies. U.S. Attorney Matthew Schneider and his colleague from the U.S. Immigration and Customs Enforcement Angie Salazar announced the charges in the Eastern District of Michigan. Per Salazar, the investigation was led by Homeland Security Investigations on two continents.

According to the indictment, five Americans and an Irishman are charged with conspiracy to commit wire fraud, wire fraud and aggravated identity theft. Another three, who reportedly are the former employees of mobile phone providers, are charged in a criminal complaint with the wire fraud related to “The Community.” As described in the document, the hacking group used SIM swapping — a type of identity theft attack that generally targets a weakness in two-factor authentication. The perpetrator usually gains control of a target's mobile phone by convincing or bribing the employee of the mobile provider to swap the phone number to a SIM card controlled by the hackers.

After successfully swapping the numbers of their victims, “The Community” managed to gain access to their various online accounts, including cryptocurrency exchange accounts and wallets. As a result of fraud, approximately $2.5 million worth of cryptocurrency was sent to wallets controlled by the hacking group. Attorney Schneider clarified that in this case, three mobile phone service provider employees purportedly helped swappers to steal money. The charges of conspiracy to commit wire fraud and wire fraud carry a maximum penalty of 20 years in prison each. Meanwhile, a conviction of aggravated identity theft could add up to two years in prison for the defendants .

According to Irish news website The Journal, a 20-year-old man from Dublin was arrested in Ireland upon the request of the U.S. authorities and is currently awaiting extradition. As Cointelegraph previously reported, in November 2018, a law enforcement group dedicated to fighting cybercrime released a report on SIM swapping, stating that it had become increasingly popular in California. Meanwhile, in January, a 21-year old American was accused of stealing almost $24 million in crypto via SIM swapping. And in February, a New York resident was indicted in what constituted the jurisdiction’s first SIM-swapping prosecution.

Article Produced By
Ana Berman

Moved by her interest to discover the world of decentralized technologies, Ana joined Cointelegraph in June 2018. Shortly after joining the team as a news writer, she focused on the major crypto stories from Latin America

https://cointelegraph.com/news/us-doj-charges-group-of-individuals-who-stole-25-mln-in-crypto-via-sim-swapping

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Bot rentals in DASH and BCH are now available at deepTradeBot

Bot rentals in DASH and BCH are now available at deepTradeBot

deepTradeBot, a SaaS service for crypto traders, is proud to announce that two popular crypto currencies have became available at the platform. The traders are welcome to use them for refilling their platform balances and bot rental operations. The both payment options have appeared in the platform internal wallet and are ready to be used right now.Earn passive income with Quadency trading bot. Connect Binance account and use Quadency bot for 6 months completely free. Hurry up, this deal is not around for long!

The company CEO Jim Stokes comments it on: «The summer has come, but our team works hard and doesn’t plan to slow down. In the nearest future you will see much more useful and quality updates on the platform. Our goal is to keep the trading process simple, easy and quick, for our traders. We’re now working on improving the interface, and integration of new opportunities into our solution. I sincerely hope that after each new successful update traders like our product more and more. Thanks for choosing deepTradeBot and thanks for staying with us friends».

To integrate these new options deepTradeBot has acceded the requests of about 3300 of their active traders. On that occasion Jim Stokes says: «This time we didn’t focus on any targeted surveys or interviews of our clients. We have just received multiple requests to add new payment options during our support team’s communication with traders. But now we have came to a conclusion that we will make such surveys to give everybody a chance to express their opinions. Thus from today you can notice non-intrusive pop-ups with surveys on the platform. Our clients’ opinions are very important for us, so please tell us what you think – don’t hesitate to vote».

About deepTradeBot: deepTradeBot.com is a trading robot that makes profit from the margin of digital assets prices, on various trading platforms, making the maximum from the slightest changes in the world market. The platform provides their bot rental services to anyone interested.  Two new crypto currencies have been added as a payment options to deeptradeBot platform deepTradeBot, a SaaS service for crypto traders, is proud to announce that two popular crypto currencies have became available at the platform.

The traders are welcome to use them for refilling their platform balances and bot rental operations. The both payment options have appeared in the platform internal wallet and are ready to be used right now.Earn passive income with Quadency trading bot. Connect Binance account and use Quadency bot for 6 months completely free. Hurry up, this deal is not around for long!The company CEO Jim Stokes comments it on: «The summer has come, but our team works hard and doesn’t plan to slow down. In the nearest future you will see much more useful and quality updates on the platform. Our goal is to keep the trading process simple, easy and quick, for our traders. We’re now working on improving the interface, and integration of new opportunities into our solution. I sincerely hope that after each new successful update traders like our product more and more. Thanks for choosing deepTradeBot and thanks for staying with us friends». To integrate these new options deepTradeBot has acceded the requests of about 3300 of their active traders.

On that occasion Jim Stokes says: «This time we didn’t focus on any targeted surveys or interviews of our clients. We have just received multiple requests to add new payment options during our support team’s communication with traders. But now we have came to a conclusion that we will make such surveys to give everybody a chance to express their opinions. Thus from today you can notice non-intrusive pop-ups with surveys on the platform. Our clients’ opinions are very important for us, so please tell us what you think – don’t hesitate to vote». About deepTradeBot: deepTradeBot.com is a trading robot that makes profit from the margin of digital assets prices, on various trading platforms, making the maximum from the slightest changes in the world market. The platform provides their bot rental services to anyone interested.

Article Produced By
Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.

https://captainaltcoin.com/bot-rentals-in-dash-and-bch-are-now-available-at-deeptradebot/

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P2P Trading Platform CryptoLocally Will Support USDJ and JST

P2P Trading Platform CryptoLocally Will Support USDJ and JST


The TRON Foundation has recently announced the launch of its first decentralized finance (DeFi) project called JUST.

It’s essentially a decentralized stablecoin lending platform. TRX holders will be able to participate and govern the issuance of a new stablecoin called USDJ, the value of which will be pegged to the US Dollar 1:1. JUST (JST), on the other hand, is the protocol and the governance token of the JUST Network. Those who hold JST will be able to vote on the issues which are associated with the operation of the issuance platform. USDJ is issued through a decentralized lending platform, and it’s intended to created collateralized debt positions that are backed by cryptocurrencies. It’s part of a supposedly growing category of digital assets that are specifically intended to counter the risk of volatility that’s associated with most of the cryptocurrencies. It’s also the very first natively developed stablecoin on the TRON network, and it’s reportedly a lot more compatible with daily transactions.

Despite being relatively new, the two tokens have already been listed for trading on some of the well-known cryptocurrency exchanges. Poloniex is one of them, but more recently, so did the popular peer-to-peer trading platform CryptoLocally. This signals for further expansion of its efforts into the ecosystem of TRON. As it shifted towards a multichain peer-to-peer trading platform, CryptoLocally previously added the TRON-based USDT and TRX. It’s also worth noting that the platform is non-custodial, meaning its operators are not able to touch the customer’s funds. All of the transactions that are facilitated by CryptoLocally are reportedly protected by a smart contract escrow service. It’s intended to shield both the buyer and the seller throughout the entire transactional process. It offers a combination of comprehensive payment options and an easy-to-use trading platform, making it a relatively convenient way to transact with USDJ and JST.

About CryptoLocally

CryptoLocally is a peer-to-peer cryptocurrency trading platform. It offers a wide range of different payment options. The platform is straightforward to use, and it operates with a lot of different fiat currencies.

Article Produced By
George Georgiev

Georgi Georgiev is CryptoPotato's editor-in-chief and a seasoned writer with over two years of experience writing about blockchain and cryptocurrencies. Georgi's passion for Bitcoin and cryptocurrencies bloomed in late 2016 and he hasn't looked back since. Crypto’s technological and economic implications are what interest him most, and he has one eye turned to the market whenever he’s not sleeping.

https://cryptopotato.com/p2p-trading-platform-cryptolocally-will-support-usdj-and-jst/

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What are Bitcoin and Crypto Futures? Guide For Beginners

What are Bitcoin and Crypto Futures? Guide For Beginners

What Are Bitcoin & Crypto Futures?

Crypto futures are a way to trade the future price action for crypto assets. Bitcoin futures are the most common crypto futures, hitting the mainstream financial world around this time last year. The Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) listed cash-settled Bitcoin futures trading products in December last year. Cash-settled means these futures are not backed by actual Bitcoin. When the futures contracts expire, the value is paid out to the trader in cash instead of Bitcoin.

Online broker Trade Station explained futures contracts in a simple fashion. They are “an agreement to make or take a delivery of a commodity or financial instrument at a fixed date in, you guessed it, the future.” Each futures contract contains a specified amount of the traded product. In the example of CBOE Bitcoin futures, each futures contract contains one Bitcoin and is settled based on the Gemini crypto exchange auction price for Bitcoin. These futures contracts (in this case, Bitcoin) can be bought or sold at will by the trader at any point within the contract time frame, as market supply and demand dictate the price of the contract and the underlying asset (Bitcoin). So as a trader or market price speculator, futures allow you “to take futures positions, along with their risk and opportunities, without ever having to take delivery of the underlying asset,” as explained by Trade Station.

How Does Futures Trading  Work?

On the CME or CBOE, traders can earn or lose money speculating on the price of Bitcoin, without actually buying or holding the underlying asset.

Buying Bitcoin Futures (also called “going long” or “longing”)

A significant portion of futures trading involves trading these contracts multiple times between contract open and contract expiration. Trading Bitcoin futures often involves constantly adapting to changing market sentiment, buying and selling contracts based on Bitcoin’s spot price accordingly. For example, say a trader named Dave decided to trade those Bitcoin monthly futures several times during a November 1st – December 1st contract period (fictional for this example). Dave could essentially buy into a Bitcoin futures contract position at any point in this time period at market price (Bitcoin’s price at the time of purchase) and then sell at any point before the December 1st expiration, seeing either profit or loss based on Bitcoin’s spot price. Dave would be paid out in cash depending on the profit or loss outcome.

A specific example of a trade Dave could take, could see him buying a Bitcoin futures contract at $3,100 on November 8th, and then selling on November 10th for $3,200 (if Bitcoin’s spot price rose that much in that time period), seeing a $100 profit, paid out in cash. Although if the price instead went from $3,100 to $2,900, and Dave sold the contract at $2,900, he would only receive a payment of $2,900 back, seeing a loss of $200.

Selling Bitcoin Futures (also called “going short” or “shorting”)

Dave also has the option to short-sell Bitcoin futures. This basically means betting that Bitcoin will fall in price in the future. When Dave short-sells a Bitcoin futures contract, it means that he borrows one Bitcoin futures contract from someone else on the exchange and sells it, hoping to buy the contract back at a lower price and keep the price difference. This is done by the exchange, so traders do not have to individually seek out contracts to borrow and then give back later.

For example, if Bitcoin’s spot price is at $3,000 on November 3rd and Dave thinks it will fall to $2,000 by November 18th, then he would sell a Bitcoin futures short contract utilizing CME or CBOE exchange features. If Dave sold one Bitcoin futures contract short at $3,000 on November 3rd, and the price fell to $2,000 on November 18th, he would buy the contract back and receive a cash payout of $4,000 (his initial $3,000 plus a $1,000 profit). In the same short trade example, once Dave entered his short position at $3,000, he would be able to close that position at any point, up until the December 1st expiration. So if Dave sold one short contract at $3,000 on November 3rd, and Bitcoin’s spot price dropped to $1,500 on November 8th, Dave could buy that contract position back at his discretion, thus ending the trade and taking home a profit of $1,500. On the other hand, if Bitcoin’s spot price rose to $4,500, and Dave chose to end the trade, he would terminate the contract and take a loss of $1,500.

What is Contract Expiration and Settlement?

Contract Expiration is the date at which futures contracts expire and end trading activity. “Prior to the expiration date, traders have a number of options to either close out or extend their open positions without holding the trade to expiration, but some traders will choose to hold the contract and go to settlement,” explained CME Group on their website. Contract settlement also occurs on a specified date. CME Group explained settlement as “the fulfillment of the legal delivery obligations associated with the original contract.” Therefore, on the specified date, the amount of the underlying asset would be given to the holder of the contract, at the market price at the time of settlement. Since CME and CBOE Bitcoin futures are cash-settled, the contract holder would receive the fiat (USD, etc.) value of the contract’s price at the time of settlement. For further info: CME Bitcoin futures settlement dates.

Do future settlements have an effect on Bitcoin’s price?

Futures of the global stock exchanges, such as NASDAQ, do have effects on the markets. Hence, it’s widespread to think that CME and CBOE Bitcoin futures carry the same impact on Bitcoin’s price. This is sometimes true. Looking at the Bitcoin’s chart, compared with the futures settlement dates, often there was a price action which is likely to be ahead of the settlement event, but as you will see, not always there’s such action. The following chart shows Bitcoin’s price ahead of the June 29 (2018) CME six-month Bitcoin futures settlement.  We can also see Bitcoin’s price action during the most recent futures settlement on December 28, 2018:Unlike June and December settlement, the futures settled in September 2018 had shown minor Bitcoin fluctuations. To summarize the effects, despite that this could also be only a coincidence, we can assume in a high-probability that the CME and CBOE future settlements do affect the Bitcoin’s price.

BitMEX Bitcoin & Altcoins Future Contracts

Unlike CBOE and CME, BitMEX futures are crypto settled, meaning the underlying crypto asset is delivered upon contract settlement. BitMEX recently announced the addition of several new crypto futures contract listings, paired with Bitcoin. “On 17th December 2018, the March 2019 quarterly ADA (Cardano), BCH (Bitcoin Cash), EOS (EOS), ETH (Ethereum), LTC (Litecoin), TRX (Tron), and XRP (Ripple) futures contracts will be listed,” BitMEX stated in a recent blog post. Since these contracts are paired with Bitcoin, their value is evaluated in terms of their Bitcoin value. Contract sizes for these new contracts are one coin of the specified asset (1 ADA, 1 EOS, etc.). For example, one EOS token would roughly equate to 0.000685 BTC (value at press time). The mentioned futures contracts speculate on the Bitcoin value these new assets will hold at the time of quarterly expiration.

BitMEX Bitcoin Perpetual Futures

BitMEX is famous for these perpetual contracts. Each contract equals $1 USD, with no settlement or expiration date. With these perpetual swap contracts, traders can trade in and out of positions as many times as they see fit, without having to take note of expiration dates as is the case with the CME and CBOE. BitMEX allows its traders to leverage up to 1:100. For more info, visit CryptoPotato’s BitMEX guide for beginners and advanced guide.

However, these perpetual futures contracts do have something called funding, which occurs every eight hours and can impact profit or loss. “You will only pay or receive funding if you hold a position at one of these times. If you close your position prior to the funding exchange then you will not pay or receive funding,” BitMEX explained on their site. Put simply; funding is comprised of an interest rate and a premium or discount. “This rate aims to keep the traded price of the perpetual contract in line with the underlying reference price. In this way, the contract mimics how margin-trading markets work as buyers and sellers of the contract exchange interest payments periodically.”

Bitcoin & Crypto Trading Futures: Pros and Cons

Pros

– The option to bet against the market: Futures are both ways. Hence, you can short against your favorite cryptocurrencies.
– Leveraged Trading: Futures allow you to leverage your capital. This can also be another advantage for crypto-based exchanges because there is always a risk in holding crypto on exchanges (for security reasons).
– Hedging: From the above reasons, trading futures is an excellent method for hedging any portfolio. Instead of selling your BTC, you can buy some short futures to hedge your portfolio during a bear market such as the one we had in 2018.

Cons

– High Risk: Futures are considered the highest risk trading instruments. Pay attention to the liquidation price that the amount of collateral allows you.
– Squeezes can kill: Sudden unexpected short or long squeezes can turn a profitable position into a bloody loss at once. In crypto squeezes and manipulations are part of the game.
– High volatility: On one hand volatility is Heaven for traders; on the other hand, volatility sometimes makes it hard to determine the market sentiment.
– Fees: Borrowing money is never free, sometimes the fees are costly. Fees differ by exchange.

Article Produced By
Benjamin BJ Pirus

BJ is a full time writer, editor, and trader in the cryptocurrency space. He has written countless professional articles for numerous news sites such as Forbes, and other interested parties in the crypto space. He is also a trader, staying up to date with the crypto markets constantly, and dabbling in traditional financial market trading occasionally.

https://cryptopotato.com/what-are-bitcoin-and-crypto-futures-guide-for-beginners/

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“The Chainsmokers”-backed Bitcoin Wallet Goes into Play for Everyday Crypto Investors

“The Chainsmokers”-backed Bitcoin Wallet Goes into Play for Everyday Crypto Investors


Casa, the VC-backed firm focused on increasing privacy for Bitcoin storage, launched its wallet product on June 15. 

Increasing Bitcoin Adoption

Casa Wallet is different than the firm’s institutional storage product, one that uses a complex mechanism to ensure large amounts for BTC are stored on a multi-signature, “premium” subscription service. Unlike its premium offering, the new Wallet is a free-for-all and features ease-of-access to ensue the everyday, the casual user is not intimidated by complex crypto wallets. The product comes just weeks after Mantis VC, the investment arm of the internationally-acclaimed electronic act The Chainsmokers said it was investing in Casa. Micheal Haley of Casa said the Wallet’s development began in 2018, after premium clients began asked the firm for a wallet product they’d feel comfortable recommending to their family and friends.”

Haley, via a blog post, added:

“We realized there wasn’t an option on the market as easy as a custodial wallet, but which stayed true to the Bitcoin values of giving you full control and sovereignty over your money. So we decided to build one right inside our Keymaster app.”

Casa Features 101

Features of the wallet include a default seedless setup, meaning that the application automatically creates a private key on a user’s phone and backs up the data to both Casa servers and the phone’s native cloud service – Apple or Google. A so-termed “Health Check” feature is in place to ensure all Bitcoin keys are functional and up-to-date. No transaction is required for this feature – it is off-chain and automatic. Users have no upper limit on the amount of Bitcoin they can store. However, Casa says higher amounts and long-term holdings must require added security features and implementations, with the firm recommending its premium product for such use. 

That said, the free Wallet product is fully safe to use, with Casa intending to add further features in the coming months, as well as additional security tips for newcomers. The product is a step towards the firm’s ethos of giving users privacy-first options to store Bitcoin. Last week, Casa co-founder and Chief Technical Officer Jameson Lopp condemned reports that U.S. crypto-exchange Coinbase was selling analytics software to the United States Drug Enforcement Agency (DEA) and Internal Revenue Service (IRS). Meanwhile, celebrities are seemingly jumping on the Bitcoin bandwagon. BTCManager reported last month Coldplay bassist Guy Berryman funded Zumo, an Edinburg-based Bitcoin (BTC) trading platform.

Article Produced By
Shaurya Malwa

https://btcmanager.com/chainsmokers-bitcoin-wallet-everyday-crypto-investors/?q=/chainsmokers-bitcoin-wallet-everyday-crypto-investors/&

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Cryptocurrency News Today – Headlines for June 18

Cryptocurrency News Today – Headlines for June 18


Set of cryptocurrencies with Bitcoin, Etherium, Ripple, Litecoin. Cryptocurrencys new digital money. Bitcoin on the front as the leader. Bitcoin as most important cryptocurrency.

  • Crypto-powered Akon city in Senegal is one step closer to completion
  • Akon’s crypto-powered city has secured a $6 billion contract
  • The $6 billion construction contract was awarded earlier today

Cryptocurrency News Today – Akon City has secured a major deal and has moved one step towards completion. The crypto-powered city has awarded a $6 billion construction contract to KE International. Recall that Senegalese-American singer and songwriter Akon has been working on the establishment of a crypto-powered city. Now, Akon City has awarded the construction contract. Akon City will rely on Akoin. The successful music artist Akon secured the $6 billion contract for his crypto-powered city in Senegal. The construction contract was awarded to the U.S-based KE International, an engineering and consulting company.

The $6 Billion Contract for Akon City Was Awarded Earlier Today

The firm can now access $4 billion to complete the first and second phases of execution of Akon City. The bulk of the city’s infrastructure will be constructed in 2023. By 2024-2029, Akon City aims to run on Akoin. The city’s partners include crypto payments firm Bitminutes, tourism agency SAPCO, and Blockchain firm Delchain. Note that KE International has already built MMTC (Mwale Medical and Technology City). MMTC is an ecocity funded by Julius Mwale a Kenyan entrepreneur. Akoin will be a stablecoin based on Stellar’s network. Although Akoin will be heavily used within Akon City, the cryptographic project is also working to make the coin a medium of exchange in 54 African nations and on some dApps. Akoin will be available via an atomic swap. This move will allow users to swap digital currency, phone minutes, and fiat. Despite been an ambitious endeavor, Akoin hasn’t attracted as much attention as anticipated since it was announced in 2018. However, this may change when the coin is listed on crypto exchanges later in the year.

Other Celebrity Cryptocurrencies Are Available

Akon isn’t the only celebrity to own digital currency. Although not as publicized as Akon, other celebrities have their cryptocurrency. The winner of Miss Iowa, Jessica VerSteeg, has also launched her token called Paragon. Paragon, which is now-bankrupt was launched in 2017. Others who have launched digital tokens include rapper Gramatik. Gramatik launched a music payment token called GRMTK back in 2017 as well, which is now defunct. Meanwhile, other celebrities have been involved in existing virtual currencies. Ashton Kutcher donated his XRP to charity. Meanwhile, Mike Tyson has openly endorsed the “Bitcoin revolution. He has led a Blockchain sports project known as “Fight to Fame.” William Shatner has backed the Bitcoin mining firm, Solar Alliance. Shatner has been involved in many other crypto-related ads as well. It is still unclear whether Akoin will turn out to be a success or not. However, it is safe to say the project has made great progress.

Article Produced By
Princess Ogono

Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.

https://smartereum.com/188052/cryptocurrency-news-today-headlines-for-june-18/

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Losing bitcoin: why it’s important to stay vigilant in the crypto space

Losing bitcoin: why it’s important to stay vigilant in the crypto space


After falling victim to a phishing attack, one man has taken to Twitter to give his story in a video that has attracted the attention of many crypto enthusiasts throughout the space.

Eric Savics said he lost 12 bitcoins in the attack which has put a downer on his dream of buying his own apartment. 

After falling victim to a phishing attack, one man has taken to Twitter to give his story in a video that has attracted the attention of many crypto enthusiasts throughout the space. Eric Savics said he lost 12 bitcoins in the attack which has put a downer on his dream of buying his own apartment. Eric posted a video to Twitter in an attempt to get help to recover his lost bitcoin stash from outside sources. He said that his seven year hard work has now been flattened and Eric has further said that he will appeal to whoever stole his Cryptocurrency. He further added in the tweet specifically talking to the thief saying that he wishes they would return a small portion of his portfolio so we can start rebuilding it.

Eric confesses that he isn’t much of a technical person but the attack was allegedly organised through a malicious version of his hardware wallet. Luckily, he is getting a lot of support from the community including the CEO of one of the biggest platforms in the space Binance, CZ. CZ has promised to direct his team to blacklist the address to which the bitcoin was sent as a result of Eric’s woes. Losing cryptocurrency isn't an unusual thing unfortunately for the industry. Many people, especially newcomers, can get roped into fraudulent schemes and hacks/scams such as these. Phishing scams are all too common these days so it’s more important than ever to stay vigilant to keep your crypto safe. It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!

Article Produced By
Adrian Barkley

Adrian has been leading teams in the finance sector for over a decade. He is highly experienced, and is responsible for ensuring that the latest news is delivered to you as it is breaking. He has a keen interest in virtual currencies, and has even made investments himself, so is incredibly passionate when it comes to writing about this topic.

https://cryptodaily.co.uk/2020/06/losing-btc-important-space

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