CBOE CEO Reveals What is Keeping Out Wall Street’s Billions From Cryptocurrency Market?

During the conference at a media luncheon on Jan 16, 2019, Ed Tilly, CEO of CBOE (Chicago Board Options Exchange) indicated what is hindering the Growth of Bitcoin Futures and keeping the Wall Street money out of the cryptocurrency market. According to him, Electronic Traded Notes (ETNs) is keeping out wall street’s billions.

Why ETNs are must for the success of Bitcoin Future?

Since Electronic Traded Notes can be denominated in smaller amounts, retail investors can easily access them. On the other hand, an institutional investor who would use Bitcoin futures needs to have a separate account set up to enter into the market. Tilly conveys the importance of ETN as the entry point for institutional investors. He says;

“The power of having that future there is also having an ETN that is more attractive to retail, and then institutions can lay off risk on the listed futures market”,

He asserted that both the products are critical to each other – it becomes a base for both market, wall street and main street. Nevertheless, he sees ETN is easily accessible to average investors and doesn’t have a higher barrier to enter into the market, whereas, Bitcoin futures would demand ‘significant amount of legwork’.

Absent that leg and introducing trackers or notes, I think we will be in this, ‘It trades every day, but it is not the story.

Govt. shutdown delaying the launch of Cryptocurrency products

He says that the regulators are always reluctant to approve ETNs and in tenure of a government closure, it is even more difficult to predict the launch of new products like Ether futures. Moreover, Coingape reported SEC’s latest order on freezing all pending proceeding doesn’t necessarily change the status of Bitcoin ETF Approval. Tilly says that ‘we cannot move for future products;

“I have two regulators that are not taking calls right now, that doesn’t mean there is nothing we are interested in. It means nothing is going to happen in this government shutdown.”

Furthermore, as far as the ETF’s are tied with the regulators, they’re left with a difficult question. With this he says;

“How do I protect the US customer from manipulation in a market that I don’t regulate?. You answer that question, you get your first ETN.”


Regulators are Still Uncertain on Cryptocurrency regulations

The launch of first CBOE’s bitcoin futures in 2017 when the Bitcoin prices reached nearly $20000 was a historical entry and the open interest for the future counts 5306 contracts. However, after a year, the number of open interest declined to 3420 contracts. With this, Tilly also talks about the success behind CBOE’s Volatility Index (VIX) futures which significantly has 370,354 contracts in open network on Thursday, 17th Jan 2019. Consequently, he adds that there are a number of financial products in connection with the VIX contract.

“Why is VIX successful? Really calls upon the pool of liquidity in the S&P 500. Oh, and there is an institutional futures contract that is traded at the CME. There is a most successful ETF, SPDR. There are trackers and replicating notes that lever up that exposure. All of that works together.”

While appreciating VIX’s contract, he adds that the crypto market has also tried offering new financial products to the market but regulators are uncertain to approve. Tilly link the growth of bitcoin with the approval of ETFs by regulators however, we have seen SEC in the month of August 2018 has already rejected 9 ETFs including Winklevoss Bitcoin Trust.

Seems like Govt. shutdown is affecting the crypto market and product launches are getting delayed. Further, the rumors that Trump might call for an emergency situation if true is not a very good sign for the cryptocurrency market. 


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Author: Tabassum
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Bitcoin Bulls Are Storming Wall Street’s Crypto Trading Desks

  • OTC desks across crypto are seeing bulls surge the market
  • That’s a sharp reversal from the end of 2018, a number of trading firms said

 

Wall Street’s trading desks offer a glimmer of hope for the floundering cryptocurrency market.

Buying pressure has increased at many of the so-called over-the-counter trading desks across the crypto world. The bullish sentiment mimics recent price action across the spot exchange market for crypto and is a sharp reversal from the environment at the end of 2018, numerous trading firms said.

One of the largest over-the-counter trading firms in crypto, Cumberland, tweeted Tuesday that the imbalance between buyers and sellers spiked by 60% over the last week. “Historically, our OTC trading is relatively balanced between buyers and sellers,” the firm said. “Over the last week, our OTC buy/sell ratio (by notional value) has increased approximately 60% towards counterparties buying.” Again, Cumberland isn’t alone.

Genesis Trading’s CEO Michael Moro said his firm also saw more buy orders flood in relative to the end of 2018 when a sizable number of crypto investors were selling for tax purposes. “I’ll echo Cumberland’s sentiments,” he said in an email. “Year-end saw quite a bit of selling for numerous reasons (e.g. tax loss selling and liquidation of crypto donations).”

“As the year turned, the selling pressure from such activities has subsided, and we have seen more buy-side interest pick up,” he added.

OTC desks oversee billions of dollars worth of institutional crypto trading on a daily basis. And in some respects, OTC trading paints a better picture of where the crypto market is from an institutional perspective as that’s where the largest trades are executed. As Monica Summerville, director of fintech research at capital markets consultancy Tabb Group noted in Forbes, “The big deals have to go OTC. A lot of the exchanges limit the order size, so you have to break up your orders, and that’s just fatal.” Summerville estimates that the OTC market is approximately two to three times larger than the trading activity across retail exchanges, including Kraken, Coinbase, and Binance.

Elsewhere, Galaxy Digital also says the tide has turned. “Galaxy’s trading desk saw robust tax-driven trading activity into year-end from asset manager and treasury accounts,” the firm said in a statement. “In early January, much of the flow reversed to buy back previously sold assets. Additionally, we have seen increased buying from Asia and EMEA traders, while some active sellers took a pause to start the year.” It’s a similar story at New York-based Paxos.

The firm, which operates both an OTC desk and an exchange, reports bullish trading activity in January.

“The nature of most of our trading flow so far this year has been buy tickets from emerging market traders,” said Paul Ciavardini, head of OTC trading at Paxos.

As for Circle’s OTC desk, the firm saw elevated sell pressure in December 2018 but that has “come back down in Jan 2019,” a spokesperson said in an emailed statement. “Sells by notional were slightly higher in December, but have started to reverse in early January,” the statement added. “Separately, we are seeing greater activity in trading alts and stablecoins in the first weeks of 2019.”

Still, there’s always one outlier. DV Chain CEO Garrett See said that his firm hasn’t seen a material difference between activity this month and the end of 2018.

“In January, it’s a pretty even between buyers and sellers, with marginally more buys than sells, but not materially more,” he said.


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Author: Frank Chaparro
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HBUS Launches Crypto Billboard Campaign Mocking Coinbase And Wall Street

The newer HBUS cryptocurrency exchange has taken its message to the streets with a new billboard campaign.

According to a blog post by the exchange themselves, they are the first in the nation to do this, and we find nothing to the contrary. However, there have been other Bitcoin-related billboard campaigns, like the one Genesis Mining ran to troll Warren Buffet.

First Exchange in the US to Do Billboard Campaign

The billboard slogan is “Evolved Crypto Trading” and pokes fun at Coinbase and Wall Street, illustrating that they are less evolved than HBUS. Wall Street is depicted as the primate level of crypto trading while Coinbase is shown as Homo erectus.

courtesy: HBUS

HBUS is the exclusive US partner of Huobi, a massive Asian exchange which consistently finds itself in the global top 10 by volume. At time of writing, it was 4th over the last 24 hours. HBUS had done almost $400,000 over the past 24 hours at time of writing. To stimulate trading on the exchange, they are eliminating trading fees for the remainder of the year.

No Fees For The Rest of 2018

We decided to launch this campaign, because no U.S.-based digital currency exchange has done a campaign like this before. The industry has seen its share of “online” gimmicks and we just wanted to get back to some of the basics of advertising that continue to play a major role in brand awareness and credibility. San Francisco is at the heart of the technological revolution and of technological “evolution”.

Crypto is in desperate need of a revitalization in trading. Many smaller traders have been washed out by the downturn that’s taken place throughout 2018. As HBUS CEO Frank Fru says:

There’s no question that digital assets have taken its share of hits this year. We wanted to give crypto traders a break when it comes to the high fees they regularly have to pay when trading on other exchanges. It’s time American traders are given freedom and more options when it comes to what they want to buy when it comes to digital assets.

HBUS does not have the full range that some exchanges, like Montana-based Poloniex, which is owned by Arizona-based Circle, but if traders are able to take advantage of it without paying fees, there’s certainly a benefit to that. The exchange does have a variety of markets including all of the major pairs that people look for. No word yet on what Coinbase, also based in San Francisco, will do in response.


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Author:  P. H. Madore
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There’s A Giant Bitcoin Rat on Wall Street And It’s Staring Down the Fed

There’s a towering inflatable rat on Wall Street and it’s found a temporary home in front of a branch of the world’s most powerful bank.

Claws out, fangs fierce, the art piece installed Tuesday is an homage to the giant rats inflated by union protesters as a way to point a finger at companies for mistreating employees. But this latest rat has been updated for modern times. Instead of a dull brown, it’s covered in colorful code and math equations in an ode to bitcoin.

The massive art piece was just installed as a sort of “protest” designed to get viewers to think critically about the state of economics and money management. “Bitcoin will take you apart,” the rat seems to argue from its perch in front of the Federal Reserve Bank of New York’s iconic stone exterior. On its piercing blue eyes, its pupils spell out the letters “PoW,” short for proof-of-work, bitcoin’s underlying algorithm.

Not a permanent installation, it’s expected to be on display for a few days according to artist and ex-hedge fund manager Nelson Saiers, who wants to use the piece to direct attention to The Fed, perhaps the world’s most powerful bank because it controls the U.S. dollar.

While this control is intended to keep the U.S. economy running smoothly, critics argue that central banks devalue money and that it’s inner-mechanics aren’t as transparent as they should be (an opinion that has a lot of clout in bitcoin circles).

As if a giant rat staring angrily at the Federal Reserve didn’t make this point already, Saiers specifically chose to set loose his creation on Maiden Lane, named after the entity that bailed out the giant companies AIG and Bear Stearns during the 2008 financial crisis.

But while rats have a long history in protest, it arguably carries added symbolism for cryptocurrency enthusiasts. Remember the time Warren Buffet called bitcoin “rat poison squared?”

You could think of the art installation as a kind of commentary on that, too.

Saiers told CoinDesk:

“Warren Buffett called bitcoin ‘rat poison squared’ but if the Fed’s a rat, then maybe rat poison is a good thing.”

Pushing buttons

But if his latest project draws more than a few confused stares this week, know this sort of protest art isn’t exactly new for Saiers.

Actually, the former mathematician has earned the nickname “The Warhol of Wall Street” with paintings that depict the darker side of finance, including the market crashes and other complexities that can impact greatly those who understand it the least.

Saiers’ work has aimed to go beyond critiquing money. He’s also taken a stand against non-violent drug crimes by hanging football jerseys spelling out the first 100 or so digits of pi (the connection, in his mind, being that pi is an irrational number and arresting someone for smoking pot is similarly “irrational”.)

However, this is his first piece related to bitcoin. While at first glance it might look like it, it’s really not an anti-Wall Street art piece. The rat is art, after all, so it’s really up to the viewer’s interpretation.

But Saiers gives viewers a few things to think about. For one, he thinks the rat gets the bitcoin philosophy across in an easy to understand way. “The sculpture’s supposed to kind of reflect the spirit of Satoshi and what he’s trying to do,” Saiers said, adding that bitcoin’s pseudonymous creator seemed to be “against bailouts,” like the one in 2008.

(When he or she first created and launched the cryptocurrency, they stuck a news clip of a bailout in the first block of the bitcoin blockchain, to be stored there forever, which many interpret as a criticism of banking and government ties.)

Saiers sees his art as a way for onlookers to learn about bitcoin and the Federal Reserve – both of them. “They each have their strengths and weaknesses. Satoshi is obviously very talented. The Fed has lots of talented people as well,” he said, not advocating for one or the other, even if they seem like conflicting

In short, he just wants people to just enjoy the silliness of it and maybe learn a thing or two.

“It’s art, so I hope they’re entertained by it. It’s informative, I hope people will learn [and] I’m hoping it’ll at least help people understand bitcoin better and be kind of faithful to what Satoshi would have wanted,” he said.

Rat symbolism

As for whether this could be achieved with a more attractive piece of art, Saiers seems most keen on making an impression. (“Bitcoin has left economics and has entered the public consciousness,” Saiers argued.)

Similarly, people sure seemed curious about the rat, with many passersby snapping selfies with it already. When Saiers and his friends first put up it up, they accidentally put it on private land. The security guards chased them off to the public sidewalk. But they did so kindly, as they all “got a kick out of the rat,” he said.

Again, Saiers isn’t expecting much controversy. Part of the fun (he believes) is that the art is ambiguous. In his mind, it’s unclear whether bitcoin or the Federal Reserve is the rat.

Saiers sees one other interesting connection. Like Satoshi, the famous street artist Banksy is pseudonymous, and he speaks about rats very fondly.

“They exist without permission. They are hated, hunted and persecuted. They live in quiet desperation amongst the filth. And yet they are capable of bringing entire civilizations to their knees. If you are dirty, insignificant and unloved then rats are the ultimate role model,” Banksy wrote in his book “Wall and Peace.”

Saiers thinks bitcoin might prove similar.

“People have been mocking bitcoin, but now it’s a $100 billion entity. It’s been scorned, but will it play a role in dampening the importance of central banks and fiat currencies?” Saiers said, adding:

“I’m not saying it will! But that’s why I chose a rat.”

White rat sculpture image via CoinDesk


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Author: Alyssa Hertig 
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Security Tokens to Bring 10% of Global GDP ($8 trillion) Into the Blockchain Ecosystem by 2024

Jeff Brown is a technology guru, analyst, and an angel investor for over 20 years now. He even attended and helped to develop first self-driving cars back in 2011th and even graduated the same astronautics program at Purdue University as also did Luis Armstrong, a man who walked the moon. And Mr. Brown bets on Security tokens and Blockchain.

Jeff attends a huge number exclusive cryptocurrency and blockchain event in New York what let Jeff become an “insider” in many blockchain and cryptocurrency related projects.
Brown is sure that the mainstream media doesn’t tell you much about the future of cryptocurrencies and adds, that crypto “insiders” are preparing to profit in the years ahead mainly from blockchain related technology and security tokens.

The wave of the security tokens boom is ramping up

According to Jeff, the New York Stock Exchange (NYSE) and NASDAQ top hedge fund managers and leaders in the blockchain industry are focused on the same thing: the creation of the security token industry. Brown said,

“One executive I spoke with expects security tokens to bring 10% of global GDP – roughly $8 trillion – into the blockchain ecosystem by 2024. That represents growth of 28X.”

Security Tokens to Take Over Wall Street

Security tokens make it much easier for companies to raise the capital they need to grow. Registering securities for a traditional IPO is a tedious, expensive process that requires companies to go through several layers of middlemen and costs millions of dollars on lawyers and brokers.

Security tokens will disintermediate those middlemen, which will reduce costs and simplify the process of launching a Security Token Offering (STO).
That will tear down the roadblocks currently preventing small businesses from raising capital which, in turn, will foster capital allocation to small-cap businesses that will drive economic growth.

And that is why security tokens will be the most robust asset class within 18 months.
Massive institutional capital will flow in from hedge funds, pension funds, and family offices. And the blockchain industry’s market cap will likely be in the trillions by early 2020 as a result.

That’s not just blind speculation it is coming from the highest tiers of Wall Street. Institutional players have not yet piled into the cryptocurrency market because they are waiting on a regulated token environment. The security token industry will provide that environment.


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Author: Karolis
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NYSE Owner’s Bitcoin Market May Have ‘Hidden Leverage,’ Wall Street Vet Warns

When Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), announced that it was launching a bitcoin market, the move was met with enthusiasm by many within the cryptocurrency industry as a vindication of the legitimacy of the asset class. However, others, including some Wall Street veterans, warned that the “financialization” of bitcoin could introduce elements of the fractional reserve banking system into the cryptocurrency market.

LIONBIT

Bakkt Says It Won’t Offer Leveraged Bitcoin Trading

Now, the head of Bakkt — ICE’s bitcoin market — is seeking to assuage some of those concerns. Writing in a blog post, Bakkt CEO Kelly Loeffler said that one of the platform’s key missions is to promote “efficient price discovery,” which means that the firm does not intend to allow clients to trade on margin or otherwise put a “paper claim on a real asset.”

She wrote:

“A critical element to price discovery is physical delivery. Specifically, with our solution, the buying and selling of Bitcoin is fully collateralized or pre-funded. As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset. This supports market integrity and differentiates our effort from existing futures and crypto exchanges which allow for margin, leverage and cash settlement. Coupled with a secure, regulated warehouse solution, you can begin to see how this market infrastructure can help more institutions and consumers participate in the asset class.”

That bitcoin contract, as CCN reported, will be a one-day futures contract that is settled in BTC rather than cash. The reason it is structured as a one-day futures contract rather than a conventional BTC/USD trading pair is that futures contracts are regulated by the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission (SEC). Per CFTC guidelines, Bakkt must provide a “warehouse” where the physical assets undergirding the products are stored.

TIP

Will ICE Secretly Offer ‘Hidden Leverage?’

Caitlin Long, who spent more than two decades on Wall Street and co-founded the Wyoming Blockchain Coalition, said that she was partially-pleased by Loeffler’s post, which answered some questions that she and others had been asking about ICE’s handling of bitcoin, specifically about explicit leverage and margin trading.

However, she noted that the post was silent on what she calls “hidden leverage,” through which institutions commingle and rehypothecate different types of collateral (bitcoins, physical USD, securities, etc.), which involves substituting them for one another on their balance sheet as well as allow multiple parties to declare ownership of the same asset on their financial statements.

These practices, Long says, are standard on Wall Street and could serve to taint bitcoin’s fixed currency supply with elements of the wider financial system, which relies on fractional-reserve banking.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author:Josiah Wilmoth
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Wall Street Demand For Crypto Rises as Exchange Activity Thrives in Bear Market

The interest of Wall Street firms towards opportunities in crypto custody and asset management has continued to increase despite the 80 percent correction the market experienced in 2018.

Sanford C. Bernstein & Co. analysts refuted recent reports about the struggle of cryptocurrency exchanges and stated that digital asset trading platforms have been recording solid volumes, generating large revenues.

LIONBIT

The analysts added that the strong performance of cryptocurrency trading platforms in a bear market or a downtrend led the demand for crypto from Wall Street firms to increase.

“As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms,” the analysts [said].

Will Banks Join the Crypto Sector?

Already, some of the world’s largest banks including Goldman Sachs and JPMorgan have disclosed their ongoing initiatives to serve clients interested in cryptocurrencies as an asset class.

In June, David Solomon, the newly appointed CEO and chairman of Goldman Sachs, said that the bank has been exploring the possibility of providing cryptocurrency-based derivatives. At the time, Solomon acknowledged, for the first time, that Goldman Sachs have been clearing Bitcoin futures on behalf of their clients.

“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too,” Solomon said.

It is possible, given the thriving business models of cryptocurrency exchanges, that Wall Street firms, hedge funds, and investment companies begin facilitating cryptocurrency trades, targeting US markets.

Twitter CEO Jack Dorsey’s Square and major stock brokerage platform Robinhood have been offering cryptocurrency trading services since early 2018, and have continued to express their optimism towards the increasing demand for the crypto market.

Both multi-billion dollar conglomerates have opted to maintain the profit margin of their cryptocurrency ventures as low as possible, most likely to appeal to investors in the cryptocurrency market first knowing that the two companies can monetize their cryptocurrency trading services at their demand.

Two months ago, Robinhood co-CEO Vlad Tenev, which secured a $5.6 billion valuation after the integration of its cryptocurrency business, said that the company is intentionally not making money on its digital asset trading app and will not do so in the foreseeable future.

“We don’t intend to make very much money on it at all for the foreseeable future. We intend to operate it as a breakeven business. The thinking behind that is what we’re really doing is building an ecosystem. Right now the products are investing products, so crypto slots in very nicely alongside the 10,000 plus other instruments that people can trade,” Tenev said.

TIP

When Will Wall Street Firms Enter?

Considering the confidence shown by Robinhood and Square in the cryptocurrency market, analysts have suggested that it will be difficult for Wall Street firms to prevent forming a venture related to the cryptocurrency market, as a long-term bet.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: JOSEPH YOUNG
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Bitcoin Remains Best Cryptocurrency according to Wall Street’s “Crypto King”

Bitcoin remains the best bet among cryptocurrencies because people are “functionally using it,” Bart Smith, head of digital assets at Susquehanna International Group, a global trading firm that are active in a wide range of markets, told CNBC.



He compared bitcoin to ethereum and smaller tokens built on the Ethereum platform by explaining that technologies such as smart contracts and decentralized apps “are very difficult [to use] and aren’t coming any time soon.”
“The use case for bitcoin is valid today, which is the currency of the Internet,” he said, adding that “it’s digital gold and it’s a cross-border money transfer which people use.”
While discussing bitcoin’s relative resilience as other tokens have sold off heavily, Smith, dubbed “Wall Street’s crypto king” by the show host, also mentioned two important price levels to keep an eye on in the bitcoin market; USD 5,800 and USD 6,800. (USD 6.362 at press time, according to coinmarketcap.com.)

Smith explained that we are now back at the same price level as “before bitcoin became a financial instrument,” referring to the time before the futures market for bitcoin was launched late last year.

“The price seems to be bouncing around [the two price levels], it kind of gets to USD 6,800 and then runs out of steam, and eventually it’s going to break out of that range,” adding that “I think that will be the indicator of new money coming in.”

However, China’s Center for Information Industry Development, an organization affiliated with the Chinese central government, wouldn’t agree with Smith. In its recent ranking of 30 cryptocurrencies bitcoin now is only 17th.



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Author: Fredrik Vold
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Traders With Pockets Full of Crypto Quit Wall Street

Millennials who made money trading digital assets in their spare time are breaking away from top firms.

Join in the fun and play on the world’s First Hybrid on-line Casino with BTC and Fiat currency payments. Check on-line for latest promotions.

Whether cryptocurrencies and the technology that powers them will reshape the financial system remains to be seen. What’s not in doubt is their ability to transform the career paths of bright young minds on Wall Street.

Adrian Xinli Zhang was climbing the ranks at Deutsche Bank AG in New York when he discovered Bitcoin. The 29-year-old made enough money trading digital currencies in his spare time to leave the German bank in March, the same month he was promoted to director, people familiar with the matter said.

At Goldman Sachs Group Inc., Jonathan Cheesman, 36, and Justin Saslaw, 28, are among at least three front-office employees in New York who quit the bank this year after making personal profits from cryptocurrencies, said people with knowledge of the situation, asking not to be identified. In London, Asim Ahmad pocketed enough from investing his savings in Ether to walk away from BlackRock Inc.

“I’m in a position where it doesn’t make sense to work at BlackRock anymore,” said Ahmad, who advised pension funds on investments in alternative assets and hedge funds while at the world’s largest asset manager. “The one-day volatility of my portfolio is higher than my salary, so if I get a few investments right then I’ll have made the same as my yearly wage and everything else on top is a bonus.”

Officials for BlackRock, Deutsche Bank and Goldman Sachs declined to comment on their employees’ investments or their departures.

While the Wall Street establishment debates whether cryptocurrencies will become a profit center or a legal liability, some employees have gotten wealthy enough from personal investments in digital assets to turn their backs on promising jobs at top firms. A small but growing group of finance professionals has built up a big enough financial cushion to eschew the safety net of a monthly salary.

Instead of heading to the beach or squandering their trading proceeds on luxurious living, some of the new digitally-moneyed have become such ardent believers in the power of blockchain, the technology behind Bitcoin and other digital assets, that they’re starting their own businesses. Ahmad says he now helps run a fund that invests in blockchain ventures with a positive social or environmental impact. Zhang is working on a trading platform for digital assets, according to a person familiar with the matter.

Zhang, formerly a trader on the centralized risk desk at Deutsche Bank, started investing in cryptocurrencies in his spare time last year and has traded more than $1 million worth of the assets, the person familiar said. He exchanged tips and trading ideas with colleagues, including Yao King, head of program trading and exchange-traded fund trading for the Americas, who also made sizable personal profits from crypto trading, said people familiar.

Aside from just buying and selling coins, some seek to profit from inefficiencies in the market, such as the variance in the price of Bitcoin on different exchanges and the difference in pricing for futures contracts of varying expiration dates. When the first Bitcoin futures started trading on a Sunday evening in December, King stayed up all night and at one point his trades accounted for a third of all open interest in the March Bitcoin future, according to people familiar with the matter.

When Ahmad first came across Ether in 2016, the same year he joined BlackRock in London, he invested all the savings he had available from six years working for an investment consultancy in Northern England, or 10,000 pounds ($13,250). While declining to say how much money he made from his investments, which included participation in initial coin offerings, he said Ether cost about $10 when he invested. It now trades above $500 and cost more than $1,400 earlier in the year.

“If you start mentally spending this money it will hurt you when it falls,” said Ahmad, who quit BlackRock in March. “If you enjoyed the volatility on the way up you have to accept it falls as hard if not harder at times.”

It’s not only financial professionals who saw the extreme volatility and immature market infrastructure of cryptocurrencies as a money-making opportunity. Scammers and criminals have also targeted the market, prompting regulators from China to the U.S. to scrutinize digital assets.

Authorities worry virtual currencies are susceptible to fraud because exchanges are not actively pursuing cheaters, wild price swings make it easy to push valuations around and digital assets aren’t currently subject to regulations like those that govern stocks and bonds. The Justice Department has opened a criminal probe into whether traders are manipulating prices, while the Securities and Exchange Commission is investigating initial coin offerings.

The whipsaw ride in cryptocurrencies in the past six months, which saw Bitcoin trade between around $6,000 and $20,000, has fueled debate among laymen and Wall Street luminaries alike over whether financial institutions should seek to make money from digital assets or avoid them like the plague. Whether they embrace it or not, the rise of crypto has forced the biggest banks and money managers to acknowledge an asset class that could previously be dismissed as a side-project for libertarians or a playground for criminals.

While many on Wall Street preach the virtues of blockchain, opinion is divided on the benefits and longevity of cryptocurrencies. Digital assets have even proven divisive within firms, with managers often at odds with subordinates, said Adam Grimsley, a former BlackRock fixed-income specialist who co-founded a crypto hedge fund in London called Prime Factor Capital.

“You’ve seen a bifurcation internally at many larger houses where senior managers are very skeptical about crypto, while graduates and younger team members are very positive,” said Grimsley. “The youngsters may have less intellectual baggage and may be more open-minded, but they also have less responsibility for managing risk and working out the practicalities of bolting on crypto to the existing business.”

And while their seniors work out the institutional stance, the juniors are leaving.

“Crypto is certainly a market that’s pulling away real talent from financial services,” said Chris Matta, 28, who left Goldman Sachs’s money management unit last year to co-found an investment firm for digital currencies called Crescent Crypto Asset Management.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Alastair Marsh
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Wall Street slips ahead of Fed decision

U.S. stocks were slightly lower on Wednesday, with declines in biotechnology and insurers negating Apple’s rise after strong results, ahead of the Federal Reserve’s policy announcement.

Expectations the U.S. central bank will sound more hawkish on policy tightening kept investors wary of big market moves, especially after currency markets were roiled this week by the dollar’s surge to 3-1/2-month highs against a basket of currencies.

The U.S. two-year Treasury yields US2YT=RR, most sensitive to monetary policy, hit a 9-1/2-year high after data showed U.S. private-sector payrolls for April came roughly in line with market forecasts, cementing expectations for a rate increase in June. [US/]

Despite U.S. companies being on track to post their strongest quarterly profit growth in seven years, worries about inflation and rising raw material costs have weighed on investors’ minds.

Apple (AAPL.O) was a bright spot, rising 4.1 percent after it posted resilient iPhone sales in the face of waning global demand and promised $100 billion in additional stock buybacks.

Its suppliers Cirrus Logic (CRUS.O), Lumentum Holdings (LITE.O) and Skyworks Solutions (SWKS.O) were all up between 2.5 percent and 10 percent.

“The market is on a wait-and-see mode until the Fed announcement, as well as any implication out of China, Mexico, Canada with regards to trade,” said Lindsey Bell, investment strategist at CFRA Research in New York.

Investors kept an eye out for developments around U.S.-China trade talks as a Trump administration delegation is expected to visit Beijing on Thursday and Friday for talks with top Chinese officials.

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At 11:29 a.m. EDT the Dow Jones Industrial Average .DJI was down 41.35 points, or 0.17 percent, at 24,057.70, the S&P 500 .SPX was down 4.35 points, or 0.16 percent, at 2,650.45 and the Nasdaq Composite .IXIC was up 7.77 points, or 0.11 percent, at 7,138.48.

“It’s refreshing to see Nasdaq leading the way even though everything is more or less flat … you’re seeing tech return to leadership category which is kind of what the market hasn’t had in the past several weeks,” said Bell.

MasterCard (MA.N) rose 2.7 percent after it reported a better-than-expected quarterly profit, boosted by higher consumer spending on credit and debit cards.

The gains kept the S&P technology index .SPLRCT in the positive territory, up 0.52 percent.

On the other end of the spectrum was Snap (SNAP.N), whose shares plunged more than 17.9 percent, after the Snapchat owner fell short of Wall Street forecasts for revenue and regular users.

Biotechnology stocks also took a hit on Gilead Sciences’ (GILD.O) 6.1 percent drop after the company reported a lower quarterly profit as sales of its flagship hepatitis C drugs fell.

Insurers MetLife (MET.N), AIG (AIG.N) and Prudential Financial (PRU.N) were all down after disability insurance provider Unum Group (UNM.N) reported a lower-than-expected profit. Unum shares fell about 16 percent.

Advancing issues outnumbered decliners for a 1.31-to-1 ratio on the NYSE and for a 1.53-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and 16 new lows, while the Nasdaq recorded 56 new highs and 25 new lows.


 

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Author Sruthi Shankar

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