Wednesday, February 13, 2019

An uncommon lifeline 😳

February 13, 2019

Selling Crypto Derivatives Could Help Keep the Lights On

Cash is tight for many businesses in the space that had majority of their liquid assets tied in cryptocurrencies.

As the value of the tokens fell, so did their runways, and operations are slimming down to accommodate the problem.

But now some businesses are getting creative and actually betting against their own assets to generate cash in the short term.

Here's the trade

Companies bet the price of Bitcoin (or another digital asset) will stay below a certain price level after a certain time period.

If it is below that price level, the company is paid in cash and gets to keep its digital assets. Meanwhile if the price goes above, the company is forced to sell its digital assets to compensate the trade.

In short, it's like a covered call option.

A very special covered call…

While Bloomberg reports the trades are happening with Wall Street pros, there is no public solution for this type of trade in crypto yet.

Actually, companies are negotiating their own terms with financial firms to take these trades and hopefully, find some short term cash.

QCP Capital, a firm facilitating the trade, worked with an ICO project last month to create a three-month contract. Anything Bitcoin price above $4,200 at expiry, the ICO liquidates its 250 Bitcoin to pay, anything below $4,200, the ICO gets $66,250 in its bank account.

EXCHANGE

Cryptopia is Getting the Green Light from Regulators but Stays Offline

Following a hack that resulted in up to $23 million worth of cryptocurrencies lost, New Zealand-based exchange Cryptopia is getting the green light from regulators to continue operations, but it continues to stay offline.

According to a report from The New Zealand Herald, local authorities are no longer preventing the exchange from relaunching as the exchange now has full control of their systems and facilities.

Still, however, the company's website remains offline and social media accounts have remained dead since January 28th.

Looking forward

It's unclear whether or not the exchange has plans to reopen as Cryptopia founders didn't respond to the Herald for comment.

That seems to be a recurring theme during this time since the exchange has released relatively little details about the hack and whether or not they will refund users.

For now, victims of the hack are anxiously waiting for their assets to be returned with a possible joint lawsuit of more than 40 traders already brewing.

ANALYSIS

Ethereum Daily Mining Rewards are Dipping to Lowest Levels Ever Reported

According to Etherscan, new Ether (ETH) is being mined at its lowest level ever reported.

The chart shows only 13,370 new ETH being created on February 10th while previous levels hovered around 19,000 ETH at the beginning of 2019.

The reason? A spontaneous spike in mining difficultly that propelled the metric 19% in one day.

Difficulty bomb delay

Still, the difficulty is nowhere near the so-called "difficulty bomb" that is looming over the network as developers work to delay it.

The feature was put in place to deter miners from continuing on the network even after the Proof of Stake algorithm takes place.

But this algorithm change won't come so soon. Already the difficulty bomb has been delayed and will be delayed again later this month as Ethereum's hard fork Constantinople gets activated.

BITS

But wait, there's more...

🇰🇷 South Korea's largest foreign exchange bank has filed up to 46 blockchain-related patents.
💰 Mike Novogratz claims Bitcoin will replace Gold since "Sovereignty costs a lot."
💳 Binance adds credit card purchasing for XRP tokens.

MEME