Swiss bank to allow betting against cryptocurrency

Asset management firm Vontobel from Switzerland will start a new futures product aimed to let customers bet against the price of bitcoin
17 November 2017   1167

The company will launch two mini futures which will let investors to make a profit if the bitcoin price drops.The futures will be listed on SIX Exchange this Friday.

The advantage of a mini-future certificate in comparison with a futures contract is a limited loss potential.

According to Eric Blattmann, head of public distribution of financial products at Vontobel, the launch of futures coincides with the desire of traders to expand the ways of trading cryptocurrencies.

We have seen big demand for our long tracker certificate from investors interested in playing the upside potential of bitcoin and now they have also the possibility to hedge their position or go short.
 

Eric Blattmann
Head of public distribution of financial product, Vontobel

After CME Group Inc., the world’s biggest exchange, claimed it would start bitcoin futures next month it can contribute to appearance of two-way price movement which shows the cryptocurrency starts to gain mainstream acceptance as a financial instrument.

Bear Market to Hit Mining Hard

BitMEX research division presented an analysis of the impact of market decline on the mining industry
11 December 2018   75

The cryptocurrency market has experienced a marked decline over the past weeks. The BitMEX research division presented an analysis of the impact of these events on the mining industry. Bitcoin hash rate has fallen by 31% since the beginning of November, which is equivalent to the capacity of 1.3 million Bitmain S9 devices. From this, BitMEX concludes that miners as a class are in a difficult situation, however, they may have different conditions, and those who pay more for electricity, are forced to turn off their equipment first, while others may still be quite viable.

The decrease in the price of Bitcoin by 45% since the beginning of November has already caused two recalculations of the complexity of mining to the lower side - by 7.4% and 15.1% on November 16 and December 3, respectively. The first recalculation turned out to be the largest since January 2013, the second - since October 2011.

Bitcoin mining revenue fell from $ 13 million per day in early November to $ 6 million per day in early December. The fall in the size of the miner's encouragement turned out to be even more rapid than the fall in the price of cryptocurrency. This is due to the delay in recalculating the complexity of mining. For the six-day period ending December 3, 21.8% fewer blocks were mined than expected, since the miners left the network before recalculating the difficulty. As a result, in addition to reducing the size of the miners' encouragement in dollar terms, due to lower asset prices, they received 21.8% less bitcoin awards.

One of the popular reasons for the recent decline in the cryptocurrency market is that miners sold bitcoins to cover their costs of hash warsin the Bitcoin Cash network. The monitoring platform Boltzmann recorded an unusually large sale of Bitcoin by the miner on November 12, that is, 3 days before the hard fork of Bitcoin Cash.

BitMEX assumes that the actions of miners over the past weeks could have played a significant role in reducing the market, however, recommends not overestimating their value and reminds that in a bearish trend, prices continue to fall regardless of asset movements and news.