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TIS THE SEASON...
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BEQUANT Crypto&Coffee

For the ardent proponents of all things digital, yesterday left like a celebration as markets reacted to the news that online payments company PayPal announced support for cryptocurrencies. As per the press release, the service will enable its customers to buy, hold, and sell Bitcoin, Ether, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet. Furthermore, it is worth noting that PayPal's service does not allow Bitcoin or other cryptocurrencies to be withdrawn or deposited. 

Once users buy the coins, they stay in your account until users sell. It was without a doubt an incredibly strong vote of confidence in the growing cryptocurrency market, such move would not have been made lightly and longevity of assets were strongly scrutinised. Without taking away the significance of the development for broader adoption, the key caveat is that merchants will not receive payments in virtual coins. In terms of what this means for the market, Bitcoin and other assets may gain from here on sentiment play, but the real winners will be the proponents of tokenised assets, including the fast-growing market for NFTs which are expected to undergo an exponential growth phase as platforms seek to extract capital value using Decentralised Finance (DeFi) platforms.

The offering might not be perfect in the eyes of core crypto community but it is a huge shift for the payments industry. The aforementioned extraction of capital, be that through NFTs or tokenised assets is also something that will drive further adoption of cryptocurrencies. As these narratives mature, speed and cost effectiveness of these transactions will come under greater scrutiny, which is why in the midst of the Bitcoin buying frenzy, the actual value buying may be in the assets such as Ripple (XRP) and Stellar (XLM).

It is also worth highlighting that the squeeze higher came amid the ongoing uncertainty surrounding OKex and also as Bitmex’s status as the key venue for derivatives was put under spotlight. In fact, while the open interest (OI) on Bitmex continued to flatline, the OI on OKex actually surged to almost $1bln. The bullish tone is similar in the options space where call demand for outstripped that for puts and interestingly, the vol surge that took place was observed right across the term structure.
Elsewhere, CoinDesk reported citing WSJ that US administration officials and House Speaker Nancy Pelosi broached the possibility of passing the pandemic-relief package after the Nov. 3 election, indicating that a deal might not be able to be reached before then. White House economic adviser Larry Kudlow said on CNBC negotiators were running out of time to get a deal passed before the election as talks went on past a Tuesday evening deadline set by Pelosi.

Finally, “Anything you can do, I can do better” mantra was at full force in the world of Decentralised Finance, with Harvest Finance (FARM) enjoying 40% increase in the total value locked (TVL). On the other hand, yearn.finance (YFI) saw another wave of unwinds, with the TVL down 17% at the time of writing (rotation trade out of YFI and into FARM).

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