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21. 03/04/2019 08:28
Bitcoin naik hingga 20% dan harganya hampir menyentuh 70juta!
Dalam 3 hari terakhir ini, Bitcoin naik hingga 20% dan harganya hampir menyentuh 70juta!
22. 02/04/2019 09:29
Top gainers Doge 20.7%
Top gainers di hari Selasa ini adalah Doge, sementara top losersnya adalah ACT. Besok hari libur nih, semangat terus menjalani hari Selasa ini ya! Semoga profit dan yang pasti harus tetap bersyukur
23. 31/03/2019 18:43
The Ultimate Irony of Crypto Trading

We have all witnessed armies of “introducers” trolling around LinkedIn and Telegram advertising their access to buyers or sellers of bitcoin, coupled with hundreds of wannabe over-the-counter (OTC) trading desks whose only method of trading is to call wholesale market makers.

The irony of this is amazing, considering that one of the most important goals of bitcoin and other cryptocurrencies is to “eliminate middlemen” and remove frictional costs from the financial system. Today, however, bitcoin trading is done by more middlemen than in traditional finance, with the result that frictional trading costs are far higher than for non-digital assets.

Before delving into the silliness of the current market structure for trading crypto, it is important to note that I am a fervent believer in the potential for crypto to revolutionize the capital markets, eventually.

I have, on the record, stated that the ability of crypto market structure to support global capital formation and trading will eventually mean that all financial assets will trade digitally.

My reasoning is based on the ability of crypto exchanges, serving clients around the world, to trade the same asset against a variety of different currencies, cryptocurrencies or stablecoins. This can potentially eliminate a wide variety of intermediaries from markets that currently serve one geography trading in one currency per instrument. That being said, the current crypto OTC market is littered with intermediaries, all of whom extract their own commission.

Consider the following workflow diagram that represents a typical transaction in crypto today:

In this example, the investor is “represented” by an introducer, who wins from among five introducers that all talk to that investor. The winner contacts five OTC desks to “source liquidity” for its client. One desk is chosen, and it, in turn, contacts three market makers and chooses one for the trade.

The market maker then gives the client a price, after checking where they believe they can trade the order; the transaction is done with the client and the market maker trades out of the position via an exchange.

This model is, of course, quite inefficient. Paying a commission or implied spread to four different counterparties makes little sense, but even worse is the fact that each of the OTC desks and market makers contacted knows about the order’s existence. This, in turn, makes it likely that the market would move before the trade is consummated, magnifying the cost to the investor.

All is not lost, however, as there are legitimate options for investors that want to trade efficiently. For example, the most sophisticated large wholesale market makers have built excellent systems for trading across exchanges and other market makers. In addition, agent desks with smart order routing systems are being established. From the perspective of investors, however, it can be hard to discern each firm’s real capabilities. That makes it difficult for investors to find the best trading desk to suit their needs.

My advice to investors is to ask the following questions when evaluating a trading firm:

1. Does it trade against my order flow as “principal”? (I.e., does it take the other side of the trade by committing their own capital?)

The answer is vital, as it tells you immediately if you are facing off with a proprietary trading desk. If the answer is “yes” that is neither bad nor good, but it does have important implications – it means that you are likely trading without having to pay an extra intermediary (good), but, unless the desk contacted you first, you should only trade with them if you need immediacy. That is because immediate liquidity comes with a cost, and you end up paying too much in the implied spread.

Additionally, if you contact multiple desks to source your trade, you are leaking a lot of information to the market, and desks will often “pre-hedge” ahead of consummating the trade. That is very expensive as it amounts to legal “frontrunning” that will move the price against you.

If, however, the desk you are talking to does not commit capital, that is also neither good nor bad, depending on their process and relationships. If they are acting as an agent and have a bonafide “natural” counterparty to the trade or if they have a sophisticated algorithmic trading platform, they can provide substantial value. In the case of “natural” counterparties, however, be suspicious as most of those claims in the crypto market tend to be false.

Algorithmic platforms built for the crypto markets are typically the most cost-efficient trading alternative. Once again, be careful to understand if the desk you are talking to trades for their own account also. If they do, ask for their procedures in writing that stop them from trading ahead of or alongside your order. If they don’t provide that, assume that they are going to use your trade to make trading profits.

2. How and where does the firm source liquidity and what does it charge to do so? Is that charge reflected as commission or a markup/markdown from the price?

Asking where your OTC desk is sourcing liquidity is also vital. If it relies exclusively on other OTC desks, find another one. Why do you need an intermediary desk to talk to firms that will take your call themselves? That means you are paying an extra desk, for no reason. In addition, you would be losing control over your order. Sadly, such desks are very common and probably make up the bulk of the trading universe. If, however, they have a robust platform with access to a combination of OTC desks and exchanges, the next question becomes key.

3. What electronic trading tools does the firm utilize and how do they interact with “public” markets?

If your OTC desk uses a combination of single exchange or OTC desk interfaces, be extremely suspicious.

It is almost impossible for a trader to simultaneously survey all markets and calculate the optimal pieces of the order to send to markets over an order’s full life. The answer you should be looking for is that the desk has an algorithmic trading system with maximum connectivity and access to data.

That statement is considered self-evident in other asset classes, but not in crypto. Now that such tools for trading crypto exist, it is time for crypto investors to take notice and demand their agents use them.

In conclusion, it is about time for investors in the crypto markets to start caring about best execution, which will help them earn greater returns while improving the market structure overall.

That is important as such improvement will help attract reluctant institutional investors that are leery of rapid price moves and the difficulty of discerning the price of liquidity.

24. 30/03/2019 16:54
Canadian Municipality Set to Accept Bitcoin for Property Tax Payments

A municipality in Canada is set to accept bitcoin for property tax payments starting next month as part of a one-year trial.

The Town of Innisfil, Ontario, announced Thursday that the cryptocurrency payment option will be offered in partnership with Toronto-based digital assets trading platform Coinberry.

Starting April, approximately 36,000 residents of the town will now see bitcoin (BTC) as a payment option on the municipality’s website. Other cryptocurrencies like bitcoin cash (BCH), ether (ETH), litecoin (LTC) and XRP could also be added in the future, according to the statement.

Using Coinberry’s cryptocurrency payment processing solution Coinberry Pay, residents will be able to pay taxes in bitcoin in Innisfil’s digital wallet.

Coinberry will then process those funds “in accordance with strict adherence to existing financial regulatory requirements” and “instantly” convert them into Canadian dollars and transfer it to the municipality. Coinberry is a Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)-registered firm.

Innisfil mayor Lynn Dollin said:

“There’s no doubt that cryptocurrency is growing in usage and popularity. By getting into this now, we are making sure our municipality is ahead of the game, and signalling to the world that we truly are a future-ready and innovative community.”

Back in November, the U.S. state of Ohio also allowed businesses to pay taxes in bitcoin, in partnership blockchain payments processor BitPay. Ohio is also expected to extend the service to individuals in the future.

25. 29/03/2019 09:32
Top Cap and Delta Cap: New Metrics for Spotting Bitcoin Price Trend Reversals

Believe it or not, there are more ways to anticipate the future market value of bitcoin than through practicing technical analysis or by observing network activity developments.

While valuable in their own right, thanks to researchers Willy Woo and David Puell, several new experimental bitcoin valuation metrics were released in February that combine the two fields to create a more holistic view of bitcoin’s market.  

Sample sizes are small in the cryptocurrency markets, with the oldest, bitcoin, having existed just 10 years, but two of the newly released metrics termed “Top Cap” and Delta Cap” have shown to be effective at identifying the tops and bottoms of bitcoin’s wild market cycles thus far.

Delta Cap

Proposed by Puell, the metric that successfully caught both bear market bottoms in 2011 and 2015, and that is known as the Delta Cap, is calculated as follows:

Delta cap = Realized cap – Average cap

Average cap =  “cumulative sum of daily market cap values / age of the market in days.”

Realized cap = “UTXOs are aggregated and assigned a price based on the BTCUSD market price at the time when said UTXOs last moved”

Resembling a long-term moving average that is touted for offering price support and resistance, the delta cap has shown to have the same effect by providing price support at roughly $2.50, the bottom in 2011, and $176, the bottom in 2015.

As can be seen above, delta cap is making a case for bitcoin having bottomed out once again, a point made evident by the fact that its price bounced off of the metric during its drop to $3,200 at the end of 2018,

Indeed, delta cap may be pointing to bitcoin’s market leaving its bearish trend, but there could be more nuance to the situation than first meets the eye.

Bitcoin has only ever bottomed out and escaped one of its infamous bear markets after the delta cap and average caps have collided with eachother, or came very close to it, as can be seen in both 2011 and 2015.

At the time of writing, delta cap is about $1,600 higher than the average cap, theoretically suggesting bitcoin’s price will either have to wait for the average cap to rise and meet the delta cap, or the delta cap will need to fall to meet the average cap by way of more significant market depreciation before a true bottom can form.

Top cap

Proposed by Woo in collaboration with Puell, top cap aims to achieve the opposite of the delta cap, in that is has been experimentally configured to pinpoint the tops of bitcoin’s explosive bull markets.

Top cap = Average cap * 35

According to Woobull.com, the multiple of 35 was found to pinpoint bitcoin historical tops.

As can be seen, the metric also resembles a moving average and effectively provided resistance at $35 in 2011, $237 in 2013 and once again at around $1,000 in the same year, all of which were precise market tops followed by significant, albeit temporary depreciation.

Most recently, bitcoin’s price came in contact with the top cap when its market reached peak euphoria and an all-time high near $20,000 in 2018. At the time of writing, bitcoin’s price is still roughly 80 percent below the all-time high.

Putting it all together

When both delta and top cap are plotted on the same chart, a “valuation Bollinger band” is created as Woo puts it, where the two metrics create the anticipated boundaries of bitcoin’s market movement.

Currently located at $48,724, the top cap paints a rosy picture for the future of bitcoin if it indeed endures another boisterous bull market, although the creator Woo thinks $90,000 is a better estimate “at a minimum on the early trajectory” for bitcoin’s next significant market top. 

 

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