BitMEX Probe On Next Global Crisis: Peril of Retail Banking & Payment System

BitMEX research tries to revert question of “When is the next global financial crisis going to happen?” In this report, BitMEX argues that the focus of financial risk has shifted from banks to asset management industry; and a “repeat of 2008” that is retail banking deposits and payment systems being under threat is unlikely. The fragility is rather most significant in corporate debt investment funds and unconventional debt investment vehicles.


It endeavors the issue of Bitcoin and crypto enthusiasts and investors asking about the next crisis that is driven with the assumption that it will occur every decade or so, will have a positive impact on Bitcoin price and will result in questioning the integrity of banking and electronic payment systems. For Bitcoin price, it argues, if Bitcoin “does respond well in the next crisis that will be a huge positive for Bitcoin and the store of the value investment thesis.”


Bank Balance Sheets in Developed Markets Are Lively

Bank management and regulators have driven in the shadows of 2008 and as a result, bank balance sheets and capital ratios have significantly strengthened. The focus shifts to main western banks that have not expanded their balance sheets at all since the global financial crisis, Over the last decade.

Rise in Leverage in the Asset Management Industry


The data show that, unlike the banking sector, the asset management industry broadened considerably since 2008 meanwhile, leverage also appears to have increased.


New Corporate Debt Market Vehicles


The replacement of the role of the banks in the corporate debt markets has resulted in the rapid growth of interrelated, non-mutually exclusive investment structures. The non-bank mechanisms for providing corporate with financing viz. Collateralize Loan Obligations (CLOs), Leveraged Loans, Private debt deals, and Bond fund ETFs and mutual funds eventually increased.


Corporate Debt Markets Status


Corporate debt levels have rose since 2008, with gross debt of Russell 3000 companies sums up to US$11 trillion, compared to just over US$8 trillion at the time of the last crisis. Corporations have favored from the new investment products and low-interest rates to lift money at record levels.


A Portfolio with a “Lesser Extent” of Bitcoin


Banks are vital to the financial system and society than asset managers, mentions the report and if asset managers come under pressure, retail and corporate deposits should be safe. Meaning the coming crisis could be less intense than in 2008. However, the “potential for government intervention to mitigate the impacts of the crisis may be more limited than in 2008.”


The data does not seem to be righteous on the precipice of a major crisis, states BitMEX Research, “it could be several years away.” It concludes with the advice to adjust a portfolio with long-dated corporate bond ETF, hedge funds specializing in volatility, VIX calls, gold, and “maybe to a lesser extent, even Bitcoin.”

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Future of Digital Tokens: Nil, Says CEO

Barry Silbert, CEO and founder of Digital Currency Group and Grayscale Investments, said that the majority of digital tokens won’t have any value in the long run.


On an interview with CNBC, Silbert said “I’m not a believer in the vast majority of digital tokens and I believe most will go to zero.” He added that, “Almost every [initial coin offering] ICO was just an attempt to raise money but there was no use for the underlying token.”


ICOs experienced a boom in late 2017– early 2018, followed by a bust as prices dropped and state and federal regulators broke down on projects that were ongoing afoul of securities laws.


Coin-telegraph reported that data from Coin Schedules shows that ICO valuations are back to levels just above those seen in January 2017. The data displays that last month, $291.6 million was curbed through ICOs, which is around 19 times less than the $5.8 billion raised in March last year.


Despite his bearish views on ICO tokens, Silbert still vibe positively about Bitcoin (BTC), in spite being an early investor. While Bitcoin has “a really ugly technical chart” in Silbert’s opinion, it has “won the race to be digital gold.”


Mike Novogratz, a former Goldman Sachs partner and founder of crypto merchant bank Galaxy Digital, said that Bitcoin is unique among cryptocurrencies. In regard to Bitcoin’s use as a potential store of value, Novogratz said:
“There’s 118 elements on the periodic table, and only one gold […] Bitcoin is going to be digital gold, a place where you have sovereign money, it’s not U.S. money, it’s not Chinese money, it’s sovereign. Sovereignty costs a lot, it should.”

 

Silbert’s Digital Currency Group is one of other companies that formed the Blockchain Association, the purported first lobbying group representing the blockchain industry in Washington D.C. rest founding members of the organization include Cryptocurrency exchange and wallet service Coin base and technology startup Protocol Labs.

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Test net Decentralized Exchange launch date out by Binance CEO

Cryptocurrency exchange Binance, CEO Changpeng Zhao tweeted the date of release test net version of its new decentralized exchange as Feb. 20.
Binance DEX, aims to provide a decentralized basis for Cryptocurrency holders to trade tokens, removing liability and security hurdles related to traditional, centralized platforms.


The test net release will be public, with Zhao requesting feedback from users in the same tweet.


The date follows previous announcements with more details about Binance DEX, which will include support for Cryptocurrency hardware wallets. This feature will allow users to trade while retaining control of their private keys, says Zhao.


Promises of a test net had circulated since December, with Binance since launching an over-the-counter desk for large volume traders and other expansion features.


At the time DEX was announced, Zhao added that he anticipated it running either in tandem with the original Binance platform or even replacing it altogether, depending on market reactions.


A company spokesperson confirmed in January, Binance is planning to expand into two new markets as in 2019.

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Ripple-Based Remittance Firm Send-Friend received a huge investment from Ripple, MasterCard and Barclays.

On Feb. 11, according to a press release, Ripple (XRP), the MasterCard Foundation, MIT Media Lab and Barclays in a funding round, invested in Remittance company Send-Friend.


The firm raised $1.7 million from investors such as Tech stars, Mahindra Finance, 2020 Ventures and 8 Decimal Capital in the round, to enhance its remittance service, which allows users to send money to the Philippines using blockchain.


To Overcome the lengthy process of traditional banking systems, Send-Friend uses Ripple’s xRapid product for cross-border payments, converting between USD, XRP and Philippine pesos.


Send-Friend co-founder and CEO, David Lighton, announced ‘This investment will allow us to build out our team, focus on community engagement, and marketing efforts.’ Send-Friend will feature “fees that are 65% lower than the industry average.” as per the press release.


The total number of customers to go over 200 is just because of Send-Friend, which was among the 13 new financial institutions that recently joined Ripple’s payment network, RippleNet.


Cross-border payments and remittance services at scale continue to be a struggle for many Crypto firms, stated by Bill Barhydt, CEO of crypto wallet provider and payment startup Abra, last month.

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By Summer 2019 Moscow Gov’t to Launch Blockchain-Enabled IT Innovation Cluster.

On Feb. 11, Russian news agency TASS reported, by summer 2019, A blockchain-based city innovation cluster will be launched by The Moscow municipal government.


According to Alexey Fursin, Head of the Department of Business and Innovation of Moscow, This platform for the city’s IT innovation cluster will help participants to get effective partners and information about their products and equipment.


Platform’s entrants will be able to receive financial support through grants from the Moscow government, as per Alexey Fursin.


This platform is based on the state-supported city navigation hub dubbed Moscow, and is currently improving and it’s in final stages of development, According to the official.


Recently announced by the Russian Federal Service for Supervision in the Sphere of Education and Science, they will deploy blockchain technology in the country’s main graduation examination, the Unified State Exam (USE).


A blockchain-enabled platform for tracking natural diamonds was introduced by Russia’s Ministry of Education and Science last month, in order to guarantee the authenticity of diamond products across the supply chain.

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Here is why Bitcoin Price got Majorly Increased.

Since it’s December 2017 peak, the most popular digital Currency (Bitcoin) lose over 80% of its value. On Thursday, Bitcoin price fell below $3,400. However, Cryptocurrency investors had some relief last week.


Rising towards the $3,650 mark on Sunday, Bitcoin prices have risen and maintained over the weekend, which is a promising sign as compare to it’s 2017 rally, when it’s value increased nowhere from $1,000 to almost $20,000. However, investors should not expect too much too soon, according to Nigel Green, chief executive of financial consultancy firm deVere Group.


Nigel Green also mentioned ‘It was a relatively sudden jump, and, of course, positive news for those currently holding Bitcoin. However, the price only reached the top of the trading range and investors should not be popping champagne corks just yet.’


The Bitcoin price is increasing and decreasing tremendously in a matter of hours, as a result of small Crypto events and similar forces were likely to thank for last week’s sudden rally, according to Nigel Green.
There are some great news for Bitcoin traders, Nigel Green Stated ‘First, there are widely published reports that according to a leaked interview with a commissioner, a Bitcoin ETF could imminently secure approval from the US securities watchdog.’


A bitcoin exchange-traded fund and a publicly-traded investment fund, will possibly one day be approved, as per Robert Jackson Jr, a commissioner at the US Securities and Exchange Commission (SEC).
It’s not only Bitcoin that will be impacted from such future events, with other Cryptocurrency prices so closely linked to Bitcoin, other currency such as Ethereum and Ripple can also expect to get the rewards of Bitcoin’s future success.


Nigel Green concluded, ‘Bitcoin is the flagship Cryptocurrency and, as such, we can expect when its values climb, it will drive prices of other major digital currencies such as Ethereum and XRP.’

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In Latest Research, BitMEX Safeguards Insurance War Chest

BitMEX describes its increasing insurance fund – currently worth over $75 million – as a “needed” reservoir for holding its unlimited upside model of leveraged trading, citing the “unique challenges” related to operating outside the institutional financial system and its safeguards.


CryptoCompare’s most recent exchange review states, the Seychelles-registered exchange hosts the vast majority of the world’s bitcoin perpetual derivatives/futures trading, consistently in the orbit of 90-95% – more than the US-regulated CBOE and CME markets altogether.


Unlimited Upside
BitMEX Research compare their operations to those of their institutional competitors, such as the CBOE and CME also they enumerate several layers of protection available to those institutions, BitMEX must cope to not have.


Emphasizing that solvency is especially important for institutional actors, whose market positions can be so large that failure to support trades could result in a risk to financial/social stability.


Hence BitMEX’s mechanic of reclaiming the entirety of a losing trader’s position after it reaches its margin limit, also know, as “liquidating,” which occurs in lieu of the equivalent “margin call.” BitMEX utilize liquidation to pay winning traders, adding to the insurance fund – if and only if market flow is “tighter than the maintenance margin.”


BitMEX make the case that this 21 thousand bitcoin fund is needed to cover gains owed to traders, pointing out that the fund has been entirely liquidated before and could happen again.


Criticisms
Others perceive this giant fund as excessive, and even as perverse incentive for BitMEX to trade against their own customers – allegations which the exchange denied.


Independent crypto researcher Hasu has in no uncertain terms called the fund “larger than it needs to be” and speculated that BitMEX may use the fund as a “second additional income stream other than commissions.” By way of evidence, he observed that money goes missing from the fund periodically.


While taking issue with the fund’s size, Hasu ultimately considers it a secondary concern. His “main concern” is with the status of the fund’s ownership; namely, the insurance fund is squarely controlled by BitMEX rather than “an external insurer or industry consortium.”


CryptoGlobe reported last month on the possibility that US authorities could shut down the offshore exchange, due to failure of adequate measures in keeping North American users off its platform.

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Testnet Decentralized Exchange launch date out by Binance CEO

Cryptocurrency exchange Binance, CEO Changpeng Zhao tweeted the date of release testnet version of its new decentralized exchange as Feb. 20.
Binance DEX, aims to provide a decentralized basis for Cryptocurrency holders to trade tokens, removing liability and security hurdles related to traditional, centralized platforms.


The testnet release will be public, with Zhao requesting feedback from users in the same tweet.


The date follows previous announcements with more details about Binance DEX, which will include support for Cryptocurrency hardware wallets. This feature will allow users to trade while retaining control of their private keys, says Zhao.


Promises of a testnet had circulated since December, with Binance since launching an over-the-counter desk for large volume traders and other expansion features.


At the time DEX was announced, Zhao added that he anticipated it running either in tandem with the original Binance platform or even replacing it altogether, depending on market reactions.
A company spokesperson confirmed in January, Binance is planning to expand into two new markets as in 2019.

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Fraudulent MetaMask Crypto Malware banned from Google Play

Decentralized app (DApp) MetaMask, faces new problems from Cryptocurrency scammers after malware impersonating the tool appeared on Google Play, Cyber security Company Eset reported Feb. 8.


In November, MetaMask confirmed its plans to launch a mobile app, which ended up being the target of the latest malware issue. MetaMask, which is one of the oldest Ethereum (ETH)-based DApps, has fallen victim to malicious schemes even before.


The malware, which replaces computer clipboard information in an attempt to steal Cryptocurrency, was banned by Google at the beginning of the month after a tip-off from Eset researchers.


Known as a ‘Clipper,’ the malware replaces copied Cryptocurrency wallet addresses with an address belonging to an attacker trapping people’s funds, sending it elsewhere without the user noticing.


The discovery marked the first time such malware had made it past Google’s vetting procedures, the security firm notes.


“The clipper we found lurking in the Google Play store, detected by ESET security solutions as Android/Clipper.C, impersonates a legitimate service called MetaMask,” Eset explained, continuing:
“The malware’s primary purpose is to steal the victim’s credentials and private keys to gain control over the victim’s Ethereum funds. However, it can also replace a Bitcoin or Ethereum wallet address copied to the clipboard with one belonging to the attacker.”


Last year in July, Google developers discarded the app from Google Play altogether, leaving only fake impersonations. A subsequent report from MetaMask revealed the action was unintentional.

 

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Upheaval of Crypto’s After Market rise, Bitcoin hold over $3,600

Saturday, Feb. 9 —Bitcoin (BTC) is holding steady above the $3,600 price point as Coin 360 data shows, major Cryptocurrencies are facing a mix of mild gains and losses, following a major market surge since yesterday.


On Friday, Feb 8. BTC gained over $200 reaching a multi-week high of $3,691 throughout the day. The top currency continued to trade consistent today, before a balance to press time around $3,660.


BTC daily transaction volume is gradually growing. As Cointelegraph reported earlier this week, the past highs are to be seen as of January 2018, when world’s top currency valued to $20,000.


Ripple (XRP), currently the second largest Cryptocurrency, has shed about 1 percent in price on the day and is now trading near $0.31. Its market capitalization is over $12.7 billion — about $260 million bigger than the next largest crypto, Ethereum (ETH).

 

ETH price is increasing around $119. Week wise the currency mostly traded sideways near $110, falling to an intra-week low of $103 on Feb. 6. Yesterday’s market returned back ETH value as of late January.
Back this day, total market capitalization of all Cryptocurrencies spiked over $122 billion, before taking a fall back down to $121 million later, according to CoinMarketCap. The daily trading volume for the last 24 hours is around $20.2 billion.


Binance Coin (BNB), Maker (MKR) and Litecoin (LTC) are the major gainers on the day. BNB, currently the 10th largest coin by market cap, has gained nearly up to 3 percent, seeing fairly steady growth since Feb. 6. MKR is up 3.2 percent, while LTC is up 3.5 percent on the day. since yesterday litecoin is on a double digit rise, claimed to be 4th largest Cryptocurrency.


Among the top twenty coins, Bitcoin Cash (BCH) and Tron (TRX) is on a loss for the day, with about 2 percent as of press time.


In industry news, Bakkt, the much-certain digital assets platform operated by the Intercontinental Exchange (ICE), has closed its first acquisition. The move marks the finalization of an acquisition of assets in futures commission merchant Rosenthal Collins Group.


In a win for adoption, Argentina’s state public transport card SUBE (Sistema Único de Boleto Electrónico) can now be topped up by using Bitcoin.

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