GMEX Technologies has announced that the Blockchain Board of Derivatives will be the latest exchange to implement the firm’s Fusion product, an integrated, centralised and distributed exchange platform solution. BBOD says it is looking to attract multiple diverse participants and provide liquidity by establishing a venue where futures and swaps on Ether and Ethereum-based tokens can be traded. The exchange is partnering with GMEX to deliver a technology solution aimed to attract both retail investors and deliver the scale and functionality to meet the needs of the institutional marketplace, it says.
Other cryptocurrencies will continue to catch up with bitcoin this year, but this is by no means a bad thing for this nascent industry, says Galen Stops.
“Whether it works out or not, the bitcoin story definitely has further to go. And regardless of its success or failure, it seems increasingly likely that virtual currency, in one form or another, is here to stay” – “Does Bitcoin Have a Future?” (Profit & Loss, December 2013).
A lot has changed in the intervening years since Profit & Loss published the above statement in conclusion to its first ever feature length article on bitcoin.
The price of bitcoin has dropped significantly following new reports that authorities in South Korea might ban the trading of cryptocurrency exchanges.
As mainstream news outlets started reporting on comments made by the South Korean Minister of Justice, Park Sang-Ki, that a bill is being prepared to ban the trading of cryptocurrencies, the price of bitcoin fell from $14,932 at 12:04am BST on January 11 to $12,884 by 4:20am BST, according to data from CoinDesk.
At the time of writing, 5:55pm BST, the price has recovered to $13,746, which is still a 7.5% decline in the overall value compared to this earlier high.
The schism between the blockchain providers and cryptocurrency users that want to in some way overturn the current financial system and those that want to work within it, was highlighted by comments made at the Swell conference hosted by Ripple this week in Toronto.
On the opening day of the event, former US Federal Reserve chair, Ben Bernanke, made some fairly bearish comments regarding the future of bitcoin. He essentially said that the need for authorities to prevent criminal transactions occurring represents an existential threat to this particular cryptocurrency.
You can read the full Profit & Loss coverage of Bernanke’s speech here, but the key takeaway regarding bitcoin was that he believes it is “working against, rather than with, the regulators”.
Despite a growing desire from some mainstream regulated financial services firms to trade bitcoin and other cryptocurrencies that are based off a public blockchain, there doesn’t seem to be many solutions on the horizon for the Know Your Customer (KYC) challenges this presents.
At the Sibos conference being held in Toronto this week, Elisabeth Rochman, financial services chief technologist at Hewlett Packard Enterprise, noted that a lot of the “BigTech” firms – such as Google and Facebook – are behind the curve compared to banks when it comes to looking at use cases for blockchain.
At the very start of June, Profit & Loss published an article looking at why demand for cryptocurrencies had spiked in 2017, with the price of bitcoin rising over 200% between January and the latter end of May.
Subsequent to that, demand continued to grow, with the price of bitcoin reaching $4,950 by the start of September. Meanwhile ether – the native cryptocurrency of the Ethereum network – went from $8.29 at the start of the year to $388 by September.
As P&L’s resident cryptocurrency enthusiast I’m excited by some of the developments that have occurred in this space over the past few months, because it could signal the start of these digital assets moving towards the financial mainstream.
To help explain why I think this is such an interesting time in the cryptocurrency space, I explain how I first became interested in them after joining Profit & Loss, that I refused to buy bitcoin when it was at $1,000 because “it will never go higher than this” (it’s now at $4,300) and why recent regulatory developments could have significant implications for financial services firms looking at trading cryptocurrencies.
Digital currency exchange, Coinbase, has raised $100 million in Series D funding.
The round was led by IVP, with participation from Spark Capital, Greylock Partners, Battery Ventures, Section 32 and Draper Associates. Founded in 1980, IVP has invested in more than 300 companies, 106 of which have gone public. Notable IVP investments include companies such as Dropbox, Netflix, Twitter, Slack and Snap.
“Coinbase experienced unprecedented growth over the last year, and we have now exchanged over $25 billion of digital currency for our customers. We’ll be using this new funding to continue scaling even further,” says Brian Armstrong, co-founder and CEO of Coinbase, in a blog announcing the news.
Profit & Loss talks to John Deters, chief strategy officer and head of multi-asset solutions at CBOE, about the potential for cryptocurrencies such as bitcoin to trade on regulated exchange platforms.
Profit & Loss: You recently announced a deal with Gemini to use its bitcoin market data to develop your own bitcoin derivatives and indices. What was the thinking behind this deal?
John Deters: We’ve been observing the evolution of the cryptocurrency space, and of bitcoin specifically, for some time. In parallel with that, we’ve been thinking about what sort of structures might work well for these products.
It seemed, not for the first time, like the cryptocurrency bubble had burst yesterday, when the price of Bitcoin tumbled 22% and Ether – Ethereum’s native cryptocurrency – similarly dropped 23%.
As Profit & Loss previously reported, these cryptocurrencies – the largest two available by market capitalisation – have been trending up rapidly in 2017, reaching record highs at the start of June.
Yet Bitcoin went from a valuation high of $2,823 on Wednesday to a low of $2,189 on Thursday, according to data from Coindesk. Likewise, the data showed that the price of Ether dropped from $395 to $303 over the same period of time.