SBI Holdings, one of the major Japanese financial firms, is planning to set up a digital stock exchange based on blockchain technology. Yoshitaka Kitao, CEO and President at SBI Holdings, has announced that the firm is planning to collaborate with Osaka Prefecture. This collaboration is to establish a new global financial hub. It is also revealed that this new international financial center will be located in Osaka and Kobe.
Digital Stock Exchange by SBI Holdings to Attract Fintech Companies
As SBI Holdings is planning to launch this digital stock exchange, it is also meant to attract global fintech companies. It will also contribute towards the development of this financial hub that will be built in Osaka. It has been mentioned by Kitao that this could be seen as the last chance for Osaka that will help it gain the status of an international financial center.
It is also revealed that currently there is a need to create financial hubs in Japan. Kitao has mentioned that SBI Holdings is all set to work towards establishing Osaka and Kobe as a global new financial center.
SBI Foreign Exchange Arm Launches CFD Trading
It has been seen that SBI Holdings is able to become one of the major companies to embrace blockchain technology. The firm is also a key partner of the huge blockchain firm, Ripple. Since 2016, both the companies have been collaborating with each other on many different projects related to XRP. Back in December 2019, the firm was considering the option of paying the shareholders dividends in the form of XRP. A similar kind of practice is also done by its subsidiary named MorningStar. Recently, on August 31, the foreign exchange arm of the firm also launched CFD trading. This has been launched for cryptocurrencies like Bitcoin, Ether, and XRP.
The crypto sector is in a bull market, and frequent evidence comes from anonymous traders who post their five-, six- and seven-figure investment returns as screenshots on Crypto Twitter.
This condition creates a FOMO-like situation where everyone gets greedy. The temptation to boost potential earnings by twenty times or more is often irresistible for most novice traders.
Today, almost every cryptocurrency exchange offers leveraged trading using derivatives. To enter these markets, a trader has to first deposit collateral (margin), which is usually a stablecoin or Bitcoin (BTC). However, unlike spot (regular) trading, the trader cannot withdraw from a futures market position until it has been closed.
These instruments have benefits and can improve a trader’s outcomes. However, those who often rely on incorrect information when trading futures contracts end up with heavy losses rather than profits.
The basics of derivatives
These leveraged futures contracts are synthetic, and it is even possible to short or place a bet on the downside. Leverage is the most appealing aspect of futures contracts, but it is worth noting that these instruments have long been used in stock markets, commodities, indexes, and foreign exchange (FX).
In traditional finance, traders measure daily price change by calculating the average closing price changes. This measure is widely used in every asset class, and it’s called volatility. However, for various reasons, this metric isn’t helpful for cryptocurrencies and can harm leverage traders.
To be brief, the higher the volatility, the more often an asset price presents wild oscillations. Contrary to the expectation, moving up by 7% to 10% every day represents a low volatility indicator. This happens because the deviation from the mean is small, while random fluctuations between a negative 3% to a positive 3% present a much wider range.
Markets with very low volatility are perfect for leverage
Knowing the general range of how an asset oscillates is extremely important when opening leverage positions. Take the British Pound Sterling (GBP), for example, and one will notice that its volatility is usually below 1% as surprise aggressive daily price changes are unusual.
FX markets are relatively stable markets when compared with stocks and commodities. Therefore, some regulated brokers offer even 200x leverage, meaning a 0.5% move against the position would cause a forced liquidation.
For a cryptocurrency trader, the Swiss Franc’s (CHF) daily change versus the U.S. dollar would likely be seen as a stablecoin.
However, the 3.4% daily Bitcoin volatility hides a more dangerous price fluctuation. While measuring daily closing prices for traditional markets makes sense, cryptocurrencies trade non-stop. This difference potentially creates much wider movements within the same day, although the daily closing often masquerades it.
The average change between the Bitcoin intraday high and low of the past 180 days is 6.5%. As shown above, these ‘intraday moves’ surpassed 10% on 25 occasions. Meaning, in reality, BTC price oscillations are much larger than expected for a 3.2% daily volatility asset.
To put things into perspective, a 5% move in the wrong direction is enough to liquidate any 20x leveraged Bitcoin position. This data is clear evidence that traders should really consider risk and volatility when leverage-trading cryptocurrencies.
Fast profits are nice, but what is more important is being able to survive the usual daily price swings to hold on to those unrealized gains.
Although there’s not a magical number to set the best leverage for every trader, one must account for the effect of volatility when calculating liquidation risks. Those aiming to keep positions open for more than a couple of days, aiming for 15x or lower leverage, seem to be ‘reasonable.’
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.
Here’s how Bitcoin’s intraday volatility complicates leverage trading
YFI’s technicals suggested that the cryptocurrency possessed bullish strength to sustain its rally. VeChain was projected to move sideways within a fixed channel. Lastly, Litecoin traded within $330-$300 – an area that needed to be defended against bearish pressure.
Year-to-date gains of 210% may be modest when compared to some other alts in the market, but a rise above $55,000 indicated bullish progress for YFI– one that could see sharper gains over the coming months. A breakout above $55,000 had already fueled a 50% jump in value to above $83,000, but a broader market pullback complicated matters. Unable to fully take advantage of its rally, YFI noted choppy movement over the past few days.
Healthy volumes and buying pressure have allowed the price to trade above $63,000-65,000 support. OBV’s uptrend attested to buying activity in the market. Awesome Oscillator’s green bars also conformed with OBV’s stance. There was some resistance around $83,000 and a break above this could see another price swing. Conversely, a breakdown could see losses towards $48,000 or $43,000.
An ADX reading of 20 showed a weak directional market as VeChain traded between $0.203 and $0.1666. Low volatility was also evident from the constricted nature of Bollinger Bands. Considering its technicals, VET would likely continue to see some rangebound movement over the coming days.
A rise above $0.203 could spur some additional buying but gains would likely be capped at $0.254-resistance.Having said that, a breakout from $0.254 could see a shift of market dynamics towards the bullish side and volumes must be observed for such an outcome.
On the daily chart, Litecoin traded within a buy zone of $330-$300. The current area needed to be defended from a sell-off towards the 50-SMA (not shown) around $266. While the 4-hour chart did register a series of bullish candlesticks, bearish sentiment still prevailed on the daily timeframe.
The Squeeze Momentum Indicator highlighted bearish momentum and a dip below half-line would present a sell signal. This would also lead to a breakdown towards the 50-SMA. RSI floated around neutral-50 but did point north at the time of writing. If the present buy area is retained, a comeback above $330 would become a possibility, however, broader market cues would likely dictate LTC’s trajectory.
U.S. City to accept crypto payment for utility bills
TL;DR Breakdown Williston to accept crypto payment for utility bills. More tech adoption to be recorded by Williston. Williston, a city in North Dakota, USA, has announced plans to begin accepting crypto payment for utility bills from residents. It becomes the first city in North Dakota to adopt crypto payment. Hercules Cummings, Williston City Finance […]
Williston to accept crypto payment for utility bills.
More tech adoption to be recorded by Williston.
Williston, a city in North Dakota, USA, has announced plans to begin accepting crypto payment for utility bills from residents. It becomes the first city in North Dakota to adopt crypto payment.
Hercules Cummings, Williston City Finance director, said they have partnered with BitPay, one of the largest crypto payment service providers in the U.S., to help them convert the coins from crypto to fiat in real-time.
Crypto payment steps for Williston
Firstly, the city council said it would monitor how residents respond to crypto payments as only utility bills are going to be paid with crypto.
The city said if residents respond positively to making payment for utility bills with crypto, it would be expanded. They would begin accepting crypto payment for landfills, permits, and licenses.
Residents who intend to pay utility bills are to visit website of the city of Williston, enter their account information to receive an emailed BitPay invoice, and choose their digital wallet and the crypto in which they want to pay.
Rebate citizens can enjoy using crypto to pay utility bills is reduced commission as Exchanges only charge 1 percent for every transaction, unlike other payment services, which can charge up to 3 per cent.
How North Dakota keeps embracing new tech
The city finance director said that his city is only responding to a growing trend and technological changes.
He revealed that crypto represents an innovation for the city’s finance department and a significant step to take the lead in the state and nationwide. Cummings also said that it is just one out of many things that will be rolling out of the finance department.
Williston is the third government entity in the U.S. to embrace cryptocurrencies as adoption takes a fast pace in the country. Wyoming is one of those states, which registered Ripple as an entity and has several crypto-friendly laws.