Large cap digital assets have continued to trade in a relatively tight range and it appears that the market currently finds itself in a position that requires someone to take that unpleasant step and “bite the bullet” so to speak, to drive the market past $10k or look for lower levels to re-enter and try again. The futures curve continues to undergo further contango widening, June-Sep play has been attracting better volume, especially as the June Bitcoin contract is due to expire next week. Of note, funding rates have been creeping higher yet again.
USDT dominance in the stable coin universe remains near year-to-date highs and while Tether’s supply flow from Omni to Ethereum blockchain has dropped off from record highs, it is still very active based on historic usage. As a guide, as of Jun. 9, 82.74% of all Tether transactions were sent on USDT, while 17.26% were sent on USDT-ETH. What is interesting is that ETH based USDT has access to any and all smart contracts, including decentralized exchanges (DEX) as well as other open finance dapps. The significance of this trend should not be underestimated since further traction towards the Ethereum blockchain will give another boost to an already buoyant DeFi market.
Despite its recent underperformance vs Bitcoin, Ethereum may stage a sharp rebound in the coming days as the market heads into the 21June19 option expiry. Good size open interest (OI) noted in higher strikes, in particular, 290 call strike OI at 1935 and 300 call strike OI at 1543, spot currently trades at 270. Looking further out, positioning looks even more intriguing, the July expiry is heavy at 360 strike, while Sep contract has been active all the way into 600 strike. At the same time, contango delta is showing further widening with the September-spot now at $10.
Looking elsewhere, Litecoin is on the move again, up nearly 6% in early European trade. This comes following reports that the Litecoin Foundation has announced a partnership with Bibox Exchange and blockchain firm Ternio to release a physical cryptocurrency debit card. As pointed out by Cointelegraph, the companies will jointly roll out a cryptocurrency debit card dubbed “BlockCard” that will purportedly let users spend their cryptocurrency funds both online and in physical store locations around the world. The card will be compatible with Litecoin (LTC) Bibox Exchange’s BIX and Ternio’s native TERN.
While the release of the eagerly awaited whitepaper and details on Facebook’s crypto project had little ostensible impact on the performance of the cryptocurrency market, in a somewhat awkward development, Rep. Maxine Waters, chairwoman of the United States House of Representatives’ Financial Services Committee has requested that Facebook halt development on its Libra cryptocurrency.
In other news, Euroclear, one of the world’s largest securities depositories, says it will push forward with building a pilot blockchain-based platform for the issuance and settlement of European commercial paper (ECP). As a guide, Euroclear settled €791 trillion ($885.48 trillion) in securities transactions and held an average of €28.8 trillion ($32.24 trillion) in client assets in 2018. The blockchain platform will reportedly serve end-to-end for issuing and settling ECPs — unsecured short-term debt instruments issued by banks or corporations, which represent a $1.2 trillion market.
Thank you for reading,
The BeQuant’s Analytics team