Crypto’s Last Week
This edition of “Crypto’s Last Week” accounts for some of the most notable, and crypto-related — institutional, investment, or regulatory — news published between Saturday, October 31, 2020, and Friday, November 06, 2020.
This past week, Deribit, the world’s largest derivatives exchange by volume, registered all-time highs on call options with a substantial out of the money strike price of $32,000 and $36,000 per bitcoin for contracts expiring on January 29, 2021.
Since BTC has not yet surpassed the 2020 highs of $14,098 reached in October, these approximately 8,000 contracts are an extremely bullish bet that there will be a minimum 126% to 155% increase in the price of one bitcoin be the end of January, making the 2018 BTC all-time high of $20,000 look like a simple step from where BTC is currently trading.
What would cause such a bullish position? You might ask. Well, there is a wide range of causes, starting with the intrinsic demand for BTC being higher than the amount available, therefore raising the price. Moreover, volatility in the crypto, stock or bond markets due to the current economic and health crises caused by COVID19 could be a valid reason, or even the results of the current US elections, after the winners take office in January might push the price to all-time highs.
Another common question might be, why is this important or even relevant? Well, even though cryptocurrency markets are a drop of water in an ocean when compared to major markets around the world such as real estate, commodities, securities, or derivatives, the rising flow of capital towards BTC as a hedge against inflation and devaluing currencies has gotten stronger by the year and 2020 has made headlines for large institutions or individuals allocating substantial amounts of their reserves or savings towards this digital asset.
Finally, the options market is one of many gauges of market sentiment towards the future value of an asset, in addition, Deribit accounts for over 75% of BTC options open interest and over 80% of the volume, meaning that if there is a platform that could reflect a potential rise or fall, it is possible that Deribit is the most accurate.
Since the launch of Polkadot, Digital Finance Group (DFG), led by its CEO James Wo, has been closely observing developments in what is expected to be among the most advanced networks to engage and create new platforms addressing a plethora of unsolved issues within the blockchain-as-a-service (BaaS) ecosystem.
Most recently, DFG has been directly involved, in the investment of both the Polkadot network as a whole, while also supporting specific projects that aim to address certain gaps that could be efficiently solved through the powerful interconnectivity mentality that has been part of the Polkadot motto since its origins.
Some examples include Bifrost — a DeFi and Staking service for PoS tokens, which include staking and liquidity. Darwinia — a decentralized heterogeneous cross-chain bridge protocol focusing on decentralized cross-chain token swap, exchange, and market. Acala — A decentralized finance hub and stablecoin platform powering cross-blockchain liquidity and applications.
Finally, James Wo, speaking at the latest Web3 Forum, shared thoughts such as the primordial value the team of any particular project or concept has to push the boundaries set in a rapidly evolving industry. Adding, the benefits the Polkadot network has regarding its latecomer status when compared to the industry’s reference point, Ethereum, because of important factors such as the indirect lesson advantages gained precisely by following Ethereum’s growth and mistakes, also highlighting the value the Asian and specifically the Chinese community and market has when pushing for global adoption.
With what seems to be the early stages of a bull market, and BTC having reached year highs, there are a great number of networks, platforms or projects, that have been quietly but diligently working towards mass adoption and implementation, that will see a rise in value, and subsequently, a considerable inflow of capital, filling coffers that will drive the next stages of development and expansion in this evergrowing and aggressive ecosystem.
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