The number of futures contracts negotiated on Bakkt reached 11,509, one for each BTC traded. The cryptocurrency recently broke the USD 11,000 mark.

The increase in price that Bitcoin (BTC) has experienced in recent days is boosting cryptocurrency-related futures and open interest markets. The Bakkt and Chicago Mercantile Exchange (CME) markets are reporting new caps on the contracts negotiated and amounts traded.

Bakkt, a subsidiary of the Intercontinental Exchange (ICE), is the company behind the New York Stock Exchange. It recently reported that the daily trading volume of Bitcoin futures contracts reached 11,509, one for each Bitcoin traded in the institutional market.

The figure represented around 122 million, considering that the price of BTC climbed to USD 11,200 per unit. The exchange indicated that it was an 85% increase since its “last record day”.

According to data from Skew, the 30-day “physical settlement” of Bitcoin (direct reception of the asset, not in fiat money such as the US dollar) on Bakkt maintained a trading volume below USD 40 million, for the most of July. However, the momentum in the price of the first cryptocurrency would be boosting Bitcoin futures contracts in this corporate market.

Taking into account the daily average figure recorded in July, this would be around USD 23 million for direct futures contracts settled in BTC, that is, with the direct handling of the cryptocurrency. For futures contracts settled in cash, the figure is USD 10.3 million.

Unlike what happens with cryptocurrency exchanges, P2P services, and decentralized platforms, on which the traded amounts can exceed USD 2 billion in just hours, the amounts of Bitcoin traded in traditional markets are relatively low.

The fluctuations in trading volumes could indicate that institutional investors remain outside of the trading with the cryptocurrency. It is also possible that investors are keeping Bitcoin futures contracts in their portfolio, but with a minimal percentage, compared to stocks or bonds.

There is also a possibility that investors prefer to trade directly with Bitcoin on Coinbase or Binance. Another scenario is that they are agreeing to Bitcoin futures contracts in other markets.

Bitcoin and Open Interest

As for open interest in Bitcoin futures contracts settled in cash on CME, the exchange reached a cap of USD 724 million, a new high for the market.

The recent rise was also reflected in the average daily trading volume for CME Bitcoin futures contracts with an increase to more than USD 1.3 billion, a figure 10 times higher than that traded on Bakkt.

Open interest is the volume of open positions in a futures contract at a certain point in time. In other words, traders keep their positions unsettled as they believe that the price could change in their favor.

According to data from CoinMarketCap, the price of Bitcoin at the time of writing this article was USD 11,040 per unit, showing an advance of 17.6% for the last seven days.

By Alexander Salazar

The Ethereum co-founder asked users not to risk their savings to invest in DeFi. He is convinced that high-yield protocols will crash.

Ethereum co-founder Vitalik Buterin warned of the dangers of investing in yield farming, the most popular segment of decentralized finance (DeFi) today.

In recent days, Buterin asked users not to “risk their entire life savings” by investing in DeFi.

In response to a question about his concerns over this segment that works on the Ethereum blockchain, Buterin replied that one factor is that many people do not see the risk.

To explain his reasoning, Buterin said that the interest rates provided by these platforms are exponentially higher than those of traditional bank accounts. That means that DeFi products are much riskier and more likely to crash.

Buterin commented that yield farming has recently been one of the most popular things. He said some applications give him 20% and 30% annual interest. However, he explained that the protocol that gives him this interest pays him again with what he produces, which is a problem. In other words, no one else provides the money that he earns with the interest that any protocol gives him.

The Ethereum co-founder warned that this is just a temporary promotion created by issuing a lot of tokens. He emphasizes the fact that these protocols will not continue to issue tokens forever to attract people to their ecosystems, but are short-term things. This means that once the attractiveness disappears and these incentives end, interest rates will drop to near zero.

However, Buterin recognized that using DeFi is not only “valuable” but also “essential”. He mentioned certain projects, such as stablecoins and decentralized exchanges like Uniswap, considering them “extremely valuable”.

Looking to the future, to improve the DeFi economy, Buterin hopes that stablecoins will soon predominate and the dominance of the US dollar will plummet.

In any case, it is not the first time that the programmer has assumed a critical position regarding decentralized finance and the practice of yield farming.

A little less than a month ago, Buterin expressed his disagreement about the fact that many people now prefer to take advantage of the Ethereum network to achieve a return. Rather, he believes that people should value the platform more for its global-access financial infrastructure, which allows for new forms of social organization.

Yield farming consists of using cryptocurrencies on DeFi platforms to take advantage of the high return rates of these platforms. In other words, users receive tokens for financing or requesting loans, so there is a possibility of making a profit.

In the framework of Ethereum’s anniversary and despite Buterin’s criticism, the DeFi market constitutes the phenomenon of the moment in the cryptocurrency ecosystem. According to data from Consensys, the ETH locked in DeFi recorded an increase of 500,000, after the launch of the COMP token of the lending platform Compound. This is precisely one of the protocols in which users make profits with the practice of yield farming.

By Willmen Blanco

The broker believes that the price of the cryptocurrency could reach USD 13,000. What no one knows yet is how long the upward trend could last.

In recent days, the market of Bitcoin (BTC) and cryptocurrencies, in general, has achieved significant growth. According to a report from brokerage firm eToro, four reasons would explain this behavior and its possible next level.

As the first element, the firm highlighted the growth in the trading volumes that there has been on exchanges in recent weeks. Javier Molina, Spokesperson for eToro in Spain, considers that transactions above USD 100,000 have increased, which seems to indicate greater participation of corporate investors.

The spokesperson stressed that this is important since a part of those players are either institutions or professionals, which means greater adoption and consistency in the process. According to eToro, BTC has exhibited a 53% return until now in 2020, while Ether (ETH) has shown a 146% advance.

The second factor to consider would be the increase in trading volumes in the Bitcoin derivatives markets, according to the platform Skew. There, open interest in BTC would be attracting more attention among investors in markets such as Bakkt, close to the New York Stock Exchange or the Chicago Mercantile Exchange (CME).

The third aspect that would be starting the engines of the cryptocurrency market is that of decentralized finance (DeFi). In recent months, the implementation of new protocols such as yield farming has been attracting the attention of new participants. In recent weeks, Compound and MakerDAO have been pushing DeFi beyond USD 3 billion worth of locked value.

The fourth reason would be stablecoins. For eToro, their use is no longer awakening only FinTech companies seeking new solutions, but also classic players like VISA or PayPal. Corporations would be evaluating these types of alternatives more closely to bring them to their payment systems.

Bitcoin’s Rise and Fall in 2020

One point that eToro highlighted about the behavior of the cryptocurrency market is that, if the upward trend continues, the price of Bitcoin could range from USD 12,000 to USD 13,000. Molina believes that investors want to know how long the latest upward trend could last.

Even though he does not offer a specific answer, the eToro spokesperson believes that, as long as the USD 10,000 support in Bitcoin is not lost, the market could continue to rise. The price of Bitcoin reached USD 11,000 for the first time in 2019. Bitcoin achieved it more than two months after the halving.

Until now this year, the price of the first cryptocurrency has shown strong changes in its price. March 12^th passed into history as “Black Thursday” in the cryptocurrency ecosystem. That day, BTC lost more than 40% of its price to be worth less than USD 4,700 per unit.

Currently, the market is growing with Bitcoin up by 19.7% in the last seven days and Ether growing 31.6% in the same period. Other projects with significant increases in the last week are XRP (22.6%), Bitcoin Cash (26.9%), Cardano (18%), Bitcoin SV (20.8%), and Litecoin (27.9%).

At the time of writing this article, the price of Bitcoin moved around USD 11,101, while that of Ethereum’s native cryptocurrency was around USD 336, according to data from CoinMarketCap.

By Alexander Salazar

The relationship of DeFi platforms with the financial system goes beyond incorporation. It could be changing the entire world of finance.

Decentralized Finance (DeFi) is one of the new tools that are removing all the foundations of the financial system. It is interesting to assess the relevance of DeFi platforms for a new form of exchange, loans, and development.

Quantum Economics analyst Pedro Febrero explained this new form of loans. He also gave a review of the most important projects within this Ethereum platform.

Febrero considers that Decentralized Finance is quite simple. Likewise, he says that DeFi involves borrowing money from others or, on the contrary, lending money to others.

Integration of DeFi Platforms into the Financial System

Pedro Febrero, who has also been a contributor to important technology news websites, gave a brief description of the financial system.

In this sense, he explained that DeFi platforms have not only adapted to the financial system but also that they are changing it. In this review, he exposed the different phases of the financial system, such as money as a store of value, medium of exchange, and unit of account.

He also explained the role of currencies, both those that represent a haven such as precious metals and Bitcoin, on the one hand, and fiat money, on the other. He also explained the subject of finance, that is, development through interest on savings and credits received.

How are Decentralized Finance Platforms Integrated?

DeFi platforms have a function similar to that of banks, but they are different. As their name implies, they are decentralized and open to anyone who wants to make use of them, unlike traditional financial institutions.

This is one of the differences that exist between traditional banks and DeFi platforms. Traditional banks have been under the control of a handful of entities, especially in the past two centuries, and are only available to select circles of users. For this reason, the vast majority of people do not have the possibility of accessing them.

For their part, DeFi platforms are extremely open to anyone who wants to be part of them. To start working with one of these applications, it is necessary to have access to the Internet network.

Open Networks and Closed Networks

On the other hand, Mr. Febrero described the importance of networks to understand how DeFi platforms operate within the financial system. Regarding networks, they fall into two categories: closed and open.

The former include centralized structures such as Facebook and Alibaba, among others. Similarly, some decentralized structures, such as Amazon or Hyperhelder, belong to the category of closed networks.

For its part, the category of open networks groups decentralized structures such as Linux and Wikipedia. There are also other types of structures, such as distributed ones. The most popular example of decentralized networks are Bitcoin and other similar cryptocurrencies.

It is precisely the area of decentralized networks that sets the standard among investors today. Bitcoin, as well as other decentralized cryptocurrencies, have proven the best option in the market.

By Alexander Salazar

Almost 50 global organizations recently participated in a survey. There are questions about the impact of stablecoins on financial stability.

For three months, the Financial Stability Council (FSB) gauged the opinion of almost 50 organizations, banks, and Bitcoin companies on global stablecoins (GSC) and their possible adoption. In recent days, the international agency published the responses that it received to its 12-question questionnaire related to regulatory and oversight challenges.

Among the participants, BBVA, BNP Paribas, Circle, Coinbase, the Libra Association, NGO Bitcoin Argentina, Paxos, Canadian, and Japanese bankers associations, the Crypto Valley Association, and the Global Association of Financial Markets were the most prominent. The results show that there are different points of view on the operation of global stablecoins.

In the case of the Spanish bank BBVA, their questioning revolved around the concept of stablecoins. The institution considers that the definition would be “very broad” since an asset that seeks to maintain a stable value could cover a wide range of activities, some of which are already regulated.

Regarding the terminology of stablecoins for their “global availability,” the bank noted that the term is misleading as all stablecoins may be available worldwide, at least technically. Furthermore, BBVA stated that financial stability would be at risk if a payment system based on this type of currency were to function.

In the case of NGO Bitcoin Argentina, the organization highlighted the 10 recommendations that the FSB issued in April of this year, before the global consultation. After analyzing what the supervisory authority said, the entity differentiated stablecoins according to whether or not there may be assets in reserve and whether or not there may be rights with the issuer.

“If the reserve assets are a ‘fiat currency’ and there is a direct claim on the assets, then the ‘stable currency’ is electronic money,” said the NGO. The organization also said that no one should consider decentralized stablecoins as electronic money or securities and that they should enter into the category of cryptocurrencies.

Stablecoins and Its Scopes

The establishment of agreements on stablecoins could compromise the Libra Association. Some of the risks are commercial effects on banks due to bank disintermediation, the ability to apply capital controls, financial stability, the establishment of effective anti-money laundering frameworks, and adequate management of reserves.

Stablecoin promoters led by Facebook consider that stable currency systems may coexist and compete with other types of crypto assets and existing payment systems. Regarding global stable currency projects and that of central banks, Libra said that an interface between the two can help eliminate or at least mitigate the risks of instability.

Companies in the cryptocurrency ecosystem see potential GSC adoption and global reach. According to Circle and Coinbase, it is possible to demonstrate the use that global stablecoins would have in multiple jurisdictions and many sectors of the industry. However, the nature of the stabilization mechanism and the liquidity of stablecoins need to be considered.

By Alexander Salazar

The country’s Securities Commission called the company a corrupt financial intermediary. Spanish authorities have also warned about the website, which operates without any licenses.

In recent days, the Italian National Commission for the Italian Society and Stock Market (CONSOB) banned the operations of cryptocurrency investment platform Mind Capital because they consider it as a potential scam.

In a July 23^rd statement, the financial regulator informed citizens that, after an inspection, it found enough evidence to order the blocking of the website. The company offers a “high-yield system available to everyone”, basing on cryptocurrency investment and operating in Italy without any authorization.

CONSOB identifies Mind Capital as a “corrupt” financial intermediary. The agency also reminds users about the importance of taking additional preventive measures before investing in platforms that offer financial services.

In the legal resolution, the regulatory agency explains that Mind Capital does not offer products or services, but only requests membership in exchange for a promise of a higher yield. The regulator also clarifies that the company has not responded to communications that it has sent it.

The regulatory agency details a series of observations that violate the Decree-Law that regulates the platforms that offer financial services in Italy. Among them, CONSOB mentions that Mind Capital promotes an investment of between 40 to 100,000 MCcoin tokens, equivalent to one US dollar per unit. However, the website indicates that the company only gives the MCcoin token an internal use.

MCcoin is not a token listed on any known platform. Due to its characteristics, Mind Capital falls into the category of Ponzi scheme, since it uses the same recipe that other similar platforms such as AirBit Club and OneCoin offer.

Among other features, the platform promises to pay the yield of the previous day daily basis. At the time of distributing the profits, the company reserves 35% of them to cover management, and maintenance expenses, as its website indicates.

Mind Capital also claims that its method bases on its ability to “study in real-time the evolution of the main crypto-assets and their selling prices in different currencies and find the best times for buying and selling.”

Italy joins other countries that have warned about Mind Capital, among which is Spain, where they consider it as a “financial beach bar”. In January of this year, the National Securities Market Commission (CNMV) included this company in the list of unauthorized financial services in the country.

In recent days, the Texas Securities and Exchange Commission also released a statement labeling Mind Capital as a 10-tier Ponzi scheme. This order points to its president and CEO, Gonzalo García Pelayo, and its Vice President, Oscar Garcia Pelayo.

Who is behind Mind Capital?

On the Mind Capital website, Spanish executive Gonzalo García Pelayo appears as the leader of a team of experts in mathematics, economics, and technology. Several media in Spain state that this character does not have a story linking him to cryptocurrencies.

In 2012, Gonzalo García Pelayo and his family group reportedly made a fortune after finding an error in the operation of casino roulettes. The Pelayos later rose to fame when their story appeared on the big screen with a movie that grossed more than USD 1.69 million.

To avoid becoming victims of frauds like the one that CONSOB is reporting in the case of Italy, users should continue to learn more about the world of cryptocurrencies. Education plays a fundamental role so that investors know the safest options in the market.

By Willmen Blanco