Bitcoin Breaks Through $4,000 Mark Despite CBOE Suspending Bitcoin Futures Trading: BTCManager’s Week in Review March 18, 2019


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The price of bitcoin has finally managed to surpass the physiologically important $4,000 mark to close the week two percent in the green versus last week’s close. At the time of press, however, the pioneer cryptocurrency has fallen under this important mark. 

Most cryptocurrency experts agree that we are poised for a market recovery and some, such as Fundstrat’s Tom Lee, even expect to see a major rally in 2019. In light of the ongoing institutionalization of bitcoin by the likes of Fidelity and Bakkt, this prediction is starting to look more and more likely every day. Moreover, with bitcoin’s move above the $4,000 mark, the first step to that rally may just have been taken.

Surprisingly, bitcoin finally surpassed and maintained the $4,000 mark at the end of the week despite the CBOE announced that it is suspending trading in its listed XBT Bitcoin Futures, which can presumably be attributed to a lack of investor interest for this product.

Its a notice, the CBOE stated:

“CFE is not adding a Cboe Bitcoin (USD) (“XBT”) futures contract for trading in March 2019. CFE is assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading.”

While the CBOE dropping its Bitcoin Futures offering can be seen as a blow to bitcoin as an asset class, the market did not respond negatively to this news hitting the wires.

On the regulatory front, we have had statements from the Bank of International Settlements, which warned banks about cryptoassets, as well as commentary from the Chairman of the CFTC, who said that cryptoassets and blockchain technology are transforming global markets.

Driven by bitcoin’s move about $4,000, the altcoin market closed the week in the green with Bitcoin Cash (BCH) being this week’s outperformer, closing around 20 percent higher versus last week.

This week’s contributions have been provided by Eddie Mitchell, Ogwu Osaemezu Emmanuel, Osato Avan-Nomayo, and Tokoni Uti.

The Chicago Futures Exchange (CFE) has declared that its planned bitcoin futures market will not be added this month, as per a notice published March 14, 2019.

The announcement from the CFE arm of The Chicago Board Options Exchange (CBOE) explains why and how they came to this decision, indicating a future view for such an addition. The post writes:

“CFE is not adding a Cboe Bitcoin (USD) (“XBT”) futures contract for trading in March 2019. CFE is assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading. While it considers its next steps, CFE does not currently intend to list additional XBT futures contracts for trading.”

Though this form of bitcoin futures contract will be put on ice, the remaining listed contracts will be up and running until they expire in June 2019.

The Basel Committee has claimed that crypto assets are a threat to global financial stability and advised banks to deal with them at their own risk, according to an official March 13, 2019 report published by the Bank for International Settlements (BIS).

Regardless of all the progress the crypto industry has made in the years since it first came in the scene, it cannot seem to escape the constant criticism being heaped on it. It has been called an evil spawn of the financial crisis by a European Central Bank executive and was called a scam and joke for years by top managers at JP Morgan before they went on to announce a cryptocurrency of their own.

The latest round of criticism comes from the Basel committee, who claim that crypto assets are a threat the global financial stability and to banks. 

Not stopping there, the report also claimed that cryptocurrencies are not an adequate store of value or a medium of exchange as they do not perform the traditional functions of money. Another issue brought up is the fact that cryptocurrencies are decentralized and not tied to any world government.

Amongst the many factors that are transforming the global financial market, cryptocurrency and blockchain were singled out by the outgoing CFTC Chairman in a March 14, 2019 speech.  

The crypto industry and the Commodity Futures Trading Commission (CFTC) are constantly crossing paths, whether they are receiving feedback from the industry or investigating possible manipulation.

However, it has become clear that the commission does acknowledge crypto and blockchain’s Influence on the industry, at least that is what can be deciphered from Christopher Giancarlo’s final speech as the CFTC chairman on March 14, 2019. This took place at the 44th Annual International Futures Industry Conference where Giancarlo gave an address titled, “Improving the Past, Tackling the Present, and Advancing to a Digital Market Future.”

During his speech, Christopher Giancarlo stated that the agency’s fintech innovation hub LabCFTC acts as their stakeholder in the evolving financial market.

Touching on said evolution within the market, he noted that the disintermediation of traditional actors and business models were key factors that challenged the already existing regulatory models. The business market, he added, is being transformed by a number of factors, which include blockchain and cryptocurrency.

Coinbase, a U.S. based cryptocurrency exchange, announced in a blog post on March 13, 2019, that its crypto custodial service has been directly integrated with Coinbaseµs Over The Counter (OTC) desk to enable clients to transfer funds easily and quickly from cold storage.

Per the blog post, the Coinbase custody service has married with the exchange’s OTC desk to assist clients in moving funds out of their offline storage. According to the firm, it has successfully conducted the first OTC trade from cold storage by taking advantage of the OTC and Custody client service.

The firm says its OTC trading desk has garnered a lot of requests from users, as it offers them a service for easy liquidation of their funds. Before this time, people had to move their assets from the cold storage to a hot wallet before they could be traded.

Importantly, the team has made it clear that the fusion of these two platforms makes it possible for the OTC desk at Coinbase Pro to be used in pricing and confirming trades before funds are moved from cold storage.

Blockstream has announced the release of its Liquid Bitcoin (L-BTC) sidechain wallet for everyday users. The Bitcoin infrastructure developer says the sidechain wallet offers greater ease in L-BTC transactions instead of the more technical command line protocols. This according to an official blog post, March 11, 2019.

As per the announcement by Blockstream chief architect, Lawrence Nahum:

“Today we’re excited to release Liquid Core, a new multiplatform desktop wallet for transacting Liquid bitcoin (L-BTC). Based on the battle-tested Bitcoin Core codebase, Liquid Core provides power users with a friendly alternative to the command line required to operate liquid and liquid-cli.”

With this new release, Blockstream hopes to increase adoption of its Liquid Network as the competition in the off-chain Bitcoin arena begins to intensify. Bitcoin enthusiasts will be waiting to see how the L-BTC sidechain wallets compete with the Lightning Network even though Blockstream insists that both technologies can coexist.

The Stock Exchange of Thailand (SET) published a document on March 13, 2019, where they outlined plans to modernize and transform the Thai capital market, and one of the steps in that plan involves the rolling out of a digital assets trading platform in 2020.

It would seem that digital assets are the hot new thing for securities exchanges. Nasdaq has added Bitcoin (BTC) and ether (ETH) indices to their platform as well as lending their technology to blockchain firms.

Now the SET has announced on March 13, 2019, that they will be launching their own digital assets exchange in 2020 as part of its three-year strategic plan from 2019 to 2020.

The press release makes reference to SET President Pakorn Peetathawatchai’s plans to develop a digital asset infrastructure, build a digital capital market and attract more investment. On top of this, he has also stated a desire to improve the investment experience for all involved and make the SET work for everyone’s vision.

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