Cryptocurrency News Now!: Is Bakkt the catalyst?📈

Monday, July 22, 2019

Is Bakkt the catalyst?📈

July 22, 2019	View in browser

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Today's top reads

Bakkt's impact on bitcoin
Has Ethereum been neglected?
VC funding declines sharply
Hashrate is booming

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Market update

COIN	PRICE	7-DAY
BTC	$10,484.50	+ 0.42%
ETH	$221.00	- 1.83%
XRP	$0.323	+ 3.18%
LTC	$95.74	+ 7.43%
BCH	$316.44	+ 6.13%

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1. Bakkt's impact on bitcoin

Today Bakkt is set to begin "testing" its physically-settled bitcoin futures exchange for the first time since announcing its arrival just short of a year ago.

While today's launch won't significantly affect the price of bitcoin, it's upcoming futures might. In a nutshell, here's what history tells us:

The introduction of futures helps to reduce asymmetric information and thus, aids in better price discovery. Researchers claim this is why bitcoin fell back to reality shortly following CME and CBOE's futures launch.
The volatility of the spot market tends to decrease as investors hedge their positions.

But bitcoin has already had futures for more than a year with CME and CBOE's splash into the market in late 2017. The difference with Bakkt? Physically-settled futures. A.K.A. A real possible demand for the underlying asset.

So how did gold react to futures? In 1974, gold dropped almost 50% just two years after futures were introduced. In the long term, however, gold had plentiful returns since that timeframe.

Though there are too many differences to count between 1974's trading environment and 2019's, it's an interesting comparison considering bitcoin dropped a similar amount shortly after the first futures were introduced to the cryptocurrency.

But regardless of the initial reaction, it's bullish. More oversight and institutional adoption are exactly what the U.S. Securities and Exchange Committee (SEC) needs to make a better decision on lingering ETF approvals.

2. Has Ethereum been neglected?

While bitcoin has had its resurgence recently, ethereum has been fairly quiet. Actually, bitcoin has dominated most altcoins this summer, which seems expected considering most of these projects were actually hot air. But ethereum's lack of gains is interesting considering it's strong support in the industry.

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3. VC funding declines sharply

According to a new CB Insights report, venture capitalist funding for blockchain companies has declined sharply following 2018's record $4.1 billion invested. Now, following the close of Q2, CB Insights is predicting that startups will only bring home $1.6 billion across 454 deals this year.

But besides the steep decline, there are a few key trends you should know...

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4. Hashrate is booming

Bitcoin's hashrate is now more than 7 times higher than it was when bitcoin peaked at $20,000 in 2017. The metric, known broadly as an indicator for the network's security, has been growing almost astronomically since the start of 2017 - taking a brief retracement during the crypto bear market.

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6. We're staking

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