Last week the bulls took a real beating and, with the launch of Bakkt physically settled futures, together with CME Bitcoin futures expiration last Friday, speculation was rife that the sell-off was driven by the futures crowd. However, this does not appear to be the case, with the most recent CME Commitment of Traders report indicating that as of 24/09/2019 the open interest (OI) was 4,178 vs 4,174 the previous week. Granted, the asset manager category reduced the exposure from 463 to 197, a reduction of 57.5%, but it was never the most dominant category to begin with. In fact, the very same group may now shift the volume to Bakkt given the appeal of ICE’s end-to-end regulated markets and custody solution.
In early European trade, the market continues to nurse losses, albeit between 2-5% and yet again, Bitcoin is underperforming Ethereum. In terms of Ethereum specific developments, DAI liquidation levels do not kick in from around $140 and accelerate further around the $110 area. As it stands, Ethereum has managed to hold on to the $150 level and currently trades around $173.
In other news, Ripple has made its first move towards building decentralized finance (DeFi) products based on XRP. With its acquisition of decentralized payments platform Logos Network, Ripple’s investment arm, Xpring, will add nine New York-based engineers. Logos founder and CEO Michael Zochowski will become Xpring’s “Head of DeFi Products.” It will certainly be interesting to see how quickly these products can hit the market and, given the success of Ethereum based offerings, the move should be seen as a net positive for XRP, which has had a less than impressive performance this year.
Regarding the institutional adoption of digital assets, Asian institutional investors, mostly high-net-worth individuals and family offices, are increasingly showing interest in digital assets, with some having allocated part of their portfolios to crypto hedge funds.
Thank you for reading,
The BeQuant’s Analytics team