Bakkt has become the latest crypto firm to get a BitLicense.
This morning, the New York Department of Financial Services announced that Bakkt had become the 29th BitLicensee.
First granted to Paxos in 2015, the BitLicense is New York’s program for regulating virtual currency firms. With it, Bakkt will have new access to offer crypto trading in the financial center of the U.S.
The NYDFS also took the opportunity to plug its other crypto initiatives, including a techsprint that aims to find new ways of getting data from firms to regulators in real time.
While New York’s regulation has a reputation for hawkishness, Manhattan’s status as a financial center continues to make access to the jurisdiction extremely attractive to businesses looking to engage in all sorts of trading activities. When PayPal was looking to get into crypto, the firm waited for New York’s first conditional BitLicense before making their plans public.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.
Author: by Ray Schuetz
This month’s Ethereum options expiry suggests ETH’s upside is limited
Ethereum price has been in an uptrend since the start of the year but key options indicators suggest overcoming the $2,000 level will be a challenge.
Published on March 11, 2021
To date, Ether (ETH) price has gained 85% in 2021, and options traders are still highly optimistic about the altcoin’s short-term performance.
The upcoming March 26 expiry holds over 96,000 ($172 million) call option contracts open interest between $2,240 and $3,520. Does a 25% or higher gain correctly reflect the current market sentiment, or are these traders simply over-optimistic about Ether’s odds?
Even though the effective price for the right to acquire Ether at a fixed price on March 26 is much lower, these options cost buyers at least $2 million. If Ether fails to increase by 25% from the current $1,808 price in two weeks, these $2,240 call options will be completely worthless.
As shown above, the call-put ratio is relatively balanced at 1.07, and the more bearish put options above the $1,800 strike are nonexistent. Meanwhile, bullish traders have crowded the scene above $2,240, partially because of their low price. The cost per option contract over the past couple of weeks ranged from $6 to $40.
Even if these call option holders previously bought while Ether was trading below $1,400, it would make sense to close the position and lock in profits. These options will lose value over time as the March 26 deadline arrives unless the price rises above their respective strike price.
Therefore, either these traders effectively expect Ether to break $2,240 in two weeks, or the options are being used in more complex strategies. Cointelegraph previously explained how $10,000 Ether call options are often used on calendar spreads.
To assess traders’ optimism level after Ether marked a local $1,880 top on March 9, one should look at the 25% delta skew.
Whenever the options market is unwilling to take downside risk, the indicator shifts negatively. On the other hand, a positive 25% delta skew indicates traders are demanding less premium (risk) for upside protection.
The above chart shows the indicator ranging from 5 to negative 10, which is considered a neutral zone.
Had option traders effectively been bullish, the upside-protection call options would have been trading at a premium.
There’s a possibility, as previously stated, that investors are using a more complex strategy that involves different expiry dates or strikes. Still, if these options have been bought exclusively for upside leverage, it certainly doesn’t reflect the overall sentiment as measured by the skew indicator.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Ethereum upgrade that will destroy coins sparks anger among miners – with some planning to fight back | Currency News | Financial and Business News
The planned upgrade to the Ethereum network that will start to destroy ether coins has angered many of the cryptocurrency’s miners, with some trying to organize a form of strike to demonstrate their opposition.
On Friday, Ethereum blockchain developers approved a major change to the network that runs the ether cryptocurrency. It is set to overhaul the bitcoin rival’s auction system, under which users send tokens to miners to pay for transactions to be completed.
Under the changes, known as EIP-1559, users will send a base transaction fee to the network that would then destroy or “burn” ether tokens, reducing the number of coins in circulation. The changes are scheduled to come into force in the summer, most likely in July.
One Twitter user said the proposed changes showed that Ethereum network managers’ attitudes towards miners were “absolutely disgusting.”
Some miners are now attempting to rally support to disrupt the Ethereum network to express their opposition to the changes, by redirecting their mining power to Ethermine.org – a pool of miners – for 51 hours on April 1.
The idea is that miners could show they have enough power to alter the network themselves, according to a popular cryptocurrency YouTuber called Bits Be Trippin’, whose comments were reported by Cointelegraph.
Others have been discussing going on strike by shutting down their mining power, which could also disrupt the Ethereum network. “We are necessary, we maintain this network secured and fast. We deserve our gains,” one Twitter user said.
It is not yet clear whether the miners’ plans will come to fruition. And the changes to the Ethereum network have plenty of support, with many users excited that the reduction in coins could boost the price and save them on transaction fees.
Justin d’Anethan, a sales manager at the cryptocurrency exchange Equos, told Insider this week it could be a recipe for “explosive” price growth. The ether price has soared more than 130% in 2021 to $1,774.
Tim Beiko, a ConsenSys product manager overseeing the implementation, told Decrypt the EIP-1559 changes would come into force in the summer in an event known as “London” no matter what.
“If we find a serious vulnerability that could not be fixed in time, we would remove it, but aside from that, it would go into London,” he said.