Building Next Crypto Market Bull Base: What to Watch
Bitcoin may not immediately grow but the next few days would be crucial to its future as well as for all cryptocurrencies. From Asia to Europe, initiatives that can create a confluence to push price movement globally later are in the offing.
Physical Bitcoin futures are going to Asia for the first time next month. CoinFLEX (Coin Futures and Lending Exchange) targets Asian retail customers with the physically-delivered futures. The aim is to tie the futures price to an underlying asset like Bitcoin thus allowing every investor involved to know what to get at a given expiry of settlement. This ensures better use of the asset more than for speculation or manipulation, CoinFLEX CEO Mark Lamb told Bloomberg adding that the Bitcoin market is currently building infrastructure, usage and adoption unlike the excitement of the 2017/2018 boom.
Launching the futures from Hong Kong gives their platform an edge to reach a global target since 98% of this market is controlled by offshore and Asian-based exchanges. This is unlike the limited jurisdiction imposed on alternatives in the U.S. that are CFTC-regulated – about 1% – 2%. Lamb believes this pattern would continue as many traders are discouraged by the U.S. attempt to clamp down on leverages and the timeframe these futures offer.
People in Japan may not immediately gain from this news since instruments like Bitcoin futures were recently barred in its markets despite being a major spot for cryptocurrencies. However, Japan is likely to approve its first exchange-traded funds to track digital assets, according to reports that the country’s Financial Services Agency is currently gauging industry interest in this area.
Whether an ETF will revive the appetite of Japanese retail investors after $500 million was stolen from Tokyo-based Coincheck exchange last year will be known by March when its bill be submitted. If it gets legislative approval, the ETF will tap into Japan’s $335 bln ETF market (about 75% owned by the central bank) after ratification by early 2020.
India’s purported legalisation of cryptocurrencies may come earlier though. For the first time, the Indian government considering a friendly stance on cryptocurrencies. This will be huge for its grown remittance market – where Facebook wants to tap into with its proposed stablecoin – and the country’s over a billion people.
The launch of DX Exchange this week is the first time an opportunity would be presented to Europeans to buy digital securities with cryptocurrencies. It allows shares of major Nasdaq-listed companies like Facebook, Tesla, Apple available to be traded as asset-backed security tokens – digital versions of financial securities like stocks and bonds – within regulatory ambit.
There’s the expected launch of the Bakkt platform later this month (to which Hong Kong billionaire Li Ka-shing has now been associated) and the U.S. SEC’s likely approval of the first Bitcoin ETF in February to access the U.S. ETF market worth $3.7 tln.