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Bitcoin News Summary – March 23, 2020

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 Coinbase Visa debit card now supports Google Pay across 14 countries in Europe. Android …

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Coinbase Visa debit card now supports Google Pay across 14 countries in Europe. Android users can indirectly make payments via crypto using Google Pay. This service is expected to launch in further European countries later this year.

Popular cryptocurrency exchange Huobi is launching a feature that resembles Wall Street’s circuit breakers to hedge against volatility. The new feature aims to decrease traders’ positions gradually in times of high volatility rather than liquidating them right off the bat.

Square, the crypto-supporting payment app run by Twitter founder, Jack Dorsey, is proving to be an increasingly popular way to trade crypto in the USA.  Square’s deposit insurance application has been approved by the Federal Deposit Insurance Corporation this week, meaning that the Federal agency will guarantee Square client’s funds in the same way it guarantees bank deposits. 

Hawaii has long been one of the most difficult states in the US in which to buy Bitcoin but this is set to change. The State of Hawaii announced that it will waive the requirement for a money transmitter license to operate a crypto-based business in the state, at least for the next two years. 

Similarly, Zimbabwe, infamous for its disastrous monetary policy, is drafting crypto legislation. Crypto is currently banned in the country, as it continues to experience monetary instability and economic weakness. The Reserve Bank of Zimbabwe’s deputy director discussed the proposed framework for crypto-based services at a recent economic conference.

Before we conclude, this week’s “Bitcoin quick question” is why is Bitcoin going down these days? Shouldn’t it be a hedge against dropping markets?

Bitcoin was built as an alternative to our banking system. As a means of keeping control of our money in our own hands. As long as the banking system remains stable and people have unlimited access to their funds Bitcoin’s true value remains irrelevant in a sense.

However, if the Coronavirus crisis continues, banks may begin to collapse and may resort to denying depositors access to their funds among other extreme measures. If this happens, people will look for alternative ways to store their wealth, and Bitcoin may see a new wave of users propping up its price. For now, banks still remain intact, but this may soon change.

Keep in mind that this is all speculation and definitely NOT investment advice. During uncertain times like these, I urge you to do your own research and never invest in something you don’t fully understand. If you want to learn more about why Bitcoin was created and its intrinsic value visit the link in the description.

Have a question you want us to answer? Just leave it in the comment section below. And if you want to support our videos, consider using the Brave browser for faster, ad free browsing that can also earn you rewards. Just visit the link in the description below.

That’s what’s happened this week in Bitcoin. See you next week.

Source: https://99bitcoins.com/bitcoin-news-summary-march-23-2020/

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Aave hits record $288 high as demand for flash loans and staking increases

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Aave (AAVE) price has been on an absolute tear for weeks and today the DeFi-token rallied to a new all-time high at $288.90. 

The decentralized finance protocol is one of the most popular in the market and the recent rally in the DeFi sector is one of the driving forces behind AAVE’s rally.

AAVE/USDT 4-hour chart. Source: TradingView

At the start of 2021, AAVE price was trading at $83 and the recent rally appears to have bolstered the protocol’s surging total value locked, increasing buy volume on spot and derivatives exchanges and the continued development of Aave’s lending platform and flash loan issuance.

TVL soars to a new high

Data from DeFi Pulse shows that Aave’s TVL rose from $2.03 billion on Jan. 1 and as (BTC) and Ether (ETH) price went parabolic Aave’s TVL also surged.

Total value locked on AAVE. Source: DeFi Pulse

Currently, Aave’s TVL sits at a new all-time high of $3.75 billion, making the platform the second-largest DeFi platform by TVL behind Maker (MKR).

The steady addition of new tokens to the lending and borrowing protocol increases the likelihood that its TVL will continue to rise and help AAVE retain its standing as one of the top DeFi projects in the cryptocurrency space.

Staking drives demand for AAVE token

AAVE’s trading volume also surged at the beginning of 2021, increasing from $200 million on Jan. 3 to a high of $928 million on Jan. 16.

AAVE price vs. Reported trading volume. Source: TheTIE

As AAVE price reached a new high, it’s 24-hour trading volume notched a record $1.06 billion. This volume surge is partially driven by investors acquiring more tokens for staking, with 26.8% of the total supply of AAVE currently staked on the platform earning an APY of 6.1%

Flash loans attract investors

Another reason for AAVE’s recent surge is the growth of its flash loans.

Flash loans allow cryptocurrency holders to collatoralize their portfolio to fund other purchases or new crypto purchases. The loans also help investors utilize the value in their tokens without the need to sell see them and create a taxable event.

Since launching flash loans less than 12 months ago, more than $1.7 billion have been issued and it’s expected that this figure will increse as the crypto bull market progresses.

Total flash loan issuance to date on AAVE. Source: Messari

As can be seen in the chart above, the most dominant token requested for flash loans is the DAI stablecoin, followed by USDC and ETH. Data from Messari shows that Aave issued $25 million in loans in the first half of 2020, $500 million in Q3, and nearly $1 billion in Q4, including $450 million in December.

The expansion of the flash loan concept will likely attract more users to Aave, especially since they can be used for arbitrage opportunities between DEXs, collateral swaps, self-liquidations and a variety of other applications within the DeFi sector.

Source: https://cointelegraph.com/news/aave-hits-record-288-high-as-demand-for-flash-loans-and-staking-increases

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Cryptocurrency makes World Economic Forum’s Davos Agenda

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The World Economic Forum’s upcoming Davos Agenda will feature two separate sessions on cryptocurrency, offering another compelling sign that digital assets have permeated mainstream consciousness. 

The sessions, titled Resetting Digital Currencies, will be held on Monday and Thursday. The first session will feature five public speakers, including Bank of England Governor Andrew Bailey and Hikmet Ersek, president and CEO of Western Union.

Thursday’s group features four speakers, including Tharman Shanmugaratnam, a senior minister for the government of Singapore, and Zhu Min, chairman of the Beijing-based National Institute of Financial Research.

“COVID-19 has accelerated the long-term shift from cash,” reads the prospectus for both sessions. “Meanwhile, central bank digital currencies are emerging, potentially transforming how people use money worldwide.”

It continues:

“What policies, practices and partnerships are needed to leverage the opportunities posed by the rise of digital currencies?”

Davos Agenda is a five-day summit featuring some of the world’s leading figures in finance and government. The cryptocurrency series falls under the summit’s “Fairer Economies” theme. Other themes include “Tech for Good,” “How to Save the Planet” and “Healthy Futures.”

The World Economic Forum is devoting more resources to understanding blockchain technology and cryptocurrency. The Geneva-based organization has even created a cryptocurrency working group, which only last month published its inaugural review focusing on the various use cases for digital assets “beyond price and speculation.”

The Forum’s research has cited blockchain technology as a key driver of “sustainable digital finance.” Blockchain and smart contract capability, the Forum’s researchers argue, can unlock “hidden values of legacy digital systems.”

Central bank digital currencies, or CBDCs, are one area of research the Forum has delved into over the past 18 months. In Jan 2020, the Forum announced it had developed a framework to help banks “evaluate, design and potentially deploy CBDC.” The framework was developed in conjunction with over 40 central banks, financial institutions and academic researchers.

Source: https://cointelegraph.com/news/cryptocurrency-makes-world-economic-forum-s-davos-agenda

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Key metrics show this week’s $4B Bitcoin options expiry favors bulls

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Over the past two weeks, Bitcoin price appears to have lost momentum and some analysts are suggesting that bears will be in control for the foreseeable future.

Taking a look at derivatives market data provides a clearer picture of what is happening on the institutional side and how the moves of larger players may impact the spot markets.

After peaking at $10.6 billion on Jan. 14, the open interest on Bitcoin (BTC) scaled back to $8.4 billion. The Jan. 29 monthly expiry continues to stand apart, totaling 47% of the options in play.

Although a $4 billion expiry could be significant, one must consider that these options are split among calls (neutral-to-bullish) and the more bearish put options. Furthermore, having an opportunity to buy BTC for $52,000 on Jan. 29 might have made sense a couple of weeks ago, but not so much right now.

BTC options aggregate open interest. Source: Bybt.com

As the data above depicts, Deribit exchange remains the absolute leader with an 83% market share. Nevertheless, to understand how eventful this expiry could be, one must adjust data and compare both calls and put options near the current $32,000 BTC level.

It’s too early to panic

Most exchanges offer monthly expiries and some also hold weekly options for short-term contracts. Dec. 25, 2020, had the largest expiry on record as $2.4 billion worth of option contracts expired. This figure represented 31% of all open interest and showed how options are usually spread throughout the year.

Aggregate BTC options open interest by expiry. Source: bybt.com

Data from Bybt.com shows that Jan. 29 expiry calendar accounts for 107,000 BTC. This expiry date represents 45% of the aggregate options market open interest.

It is worth noting that not every option will trade at expiry as some of those strikes now sound unreasonable, especially considering there are less than five days left.

BTC Jan. 29 aggregate options open interest by strike. Source: bybt.com

As Bitcoin marked its new $42,000 all-time high, some ultra bullish call options were traded but as BTC price adjusted, those short-term options became worthless.

Currently, over 68% of Jan. 29 call options at $40,000 and above should be disregarded for calculation. The same can be said for the bearish put options at $25,000 and below. These represent 76% of the open interest.

This data leaves an estimated $745 million worth of call options below $40,000 for the aggregate options expiry on Jan. 29. Meanwhile, the more bearish put options above $25,000 amount to $300 million. Therefore, the adjusted Jan. 29 open interest stands at $1.05 billion while holding a 0.40 put-to-call ratio.

Skew shows market makers are unwilling to take upside risk

Analyzing open interest provides data from trades that have already passed, whereas the skew indicator monitors options in real-time. This gauge is even more relevant as BTC was trading below $23,500 just thirty days ago. Therefore, the open interest near that level does not indicate bearishness.

When analyzing options, the 30% to 20% delta skew is the single most relevant gauge. This indicator compares call (buy) and put (sell) options side-by-side.

A 10% delta skew indicates that call options are trading at a slight premium to the more bearish/neutral put options. On the other hand, a negative skew translates to a higher cost of downside protection and is a signal that traders are bearish.

Deribit Bitcoin options 30-20% delta skew. Source: genesisvolatility.io

According to the data shown above, the last time some bearish sentiment emerged was Jan. 10, when the Bitcoin price crashed by 15%. This move was followed by an extreme 30% to 20% delta skew as optimism reached 49, a level unseen over the previous past 12 months.

Whenever this indicator passes 20, it reflects fear of potential price upside from market makers and professionals, and is considered bullish. On the other hand, the current 0 to 10 range that held since Jan. 20 is deemed neutral.

While a $4 billion options expiry might be worrisome, nearly 74% of the options are already deemed worthless. Regarding the Jan. 29 expiry, bulls remain mainly in control due to its much larger adjusted open interest.

Bears are reasonably comfortable at $32,000

Jan. 29 BTC aggregate options open interest per strike. Source: Bybt.com

Despite bulls having an overall advantage, the more bearish put options dominate expiries between $33,000 and $35,000. Nevertheless, this 1,200 BTC contract advantage is more than offset by the 1,950 BTC contract imbalance favoring the call options from $28,000 to $32,000.

To conclude, as things currently stand, bulls seem in total control of Friday’s expiry, although incentives between $28,000 to $35,000 are reasonably balanced. Overall there’s not much to gain from either side to create additional volatility ahead of Jan. 29.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Source: https://cointelegraph.com/news/key-metrics-show-this-week-s-4b-bitcoin-options-expiry-favors-bulls

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