weekly roundup – Coinbase IPO | Crypto Facilities | DeFi Market Surge
A week of extremes: Last week, we saw events in 2020 turn even stranger when the price of spoof cryptocurrency Dogecoin spiked hard all week thanks to a viral challenge on TikTok. And bitcoin’s one-year correlation to the S&P 500 hit record highs as the leading cryptocurrency continued to trade in lockstep with traditional financial markets, reaching a multi-year high of 0.79 on Wednesday, according to data from Skew, who also tweeted that bitcoin had its third best quarterly close ever.
Here’s our weekly roundup of the industry news and big reads. Don’t miss the interview with our CEO on the latest episode of Blockchat which we’ve included this week.
Coinbase Readies Landmark Stock Listing
Coinbase is reportedly preparing to list on the US stock market sometime in early 2021. The SEC would have to approve Coinbase’s listing application and should it be approved, Coinbase would be the first crypto exchange to go public in the US. Coinbase could pursue the listing later this year or early next year, sources who spoke to Reuters say. The company has not yet registered its intention to go public with the SEC, but has been in talks to hire investment banks and law firms. However, Coinbase has scheduled its first-ever investor day for 14th August, amid the rumours – often a harbinger of a planned direct listing.
Meanwhile, the exchange’s blockchain analytics division has recently secured a 4 year contract with the U.S. Secret Service according to public records.
It’s not just Coinbase eyeing the public markets. Crypto lender BlockFi is also planning a public market debut according to its CEO, Zac Prince. The firm is looking to hire a CFO to manage investor relations and “position the finance team for late-stage investment, acquisition, and/or IPO.” Apparently, the firm could go public as early as the second half of 2021.
Record Bitcoin Options Market Volume Shows Institutions Keen on Crypto
Record surges in regulated bitcoin options market volume signals increasing interest and participation from institutional investors.
CryptoCompare’s Exchange Review published last week analysed monthly trends in the cryptocurrency exchange market and found that crypto derivatives volumes have begun to taper off after peaking this May. Crypto derivatives volumes dropped 35.7% in June to $393 billion.
The overall trend which was also observed in the spot markets can be partially explained by the lack of volatility currently seen in bitcoin and the majority of crypto assets within the market.
Despite the drop in overall volumes for the derivatives markets, regulated options seem to be gaining popularity. In June, the total volume for bitcoin options on the Chicago Mercantile Exchange (CME) rose by 41% to reach another all-time monthly high with 8,444 contracts traded. Meanwhile, BTC futures traded on CME decreased by 23% in June which was still the second biggest month in 2020.
Kraken-Owned Crypto Facilities Becomes First Crypto Firm to Receive MTF Licence in the UK
According to a press release last week, Crypto Facilities, also known as Kraken Futures, announced it had been granted a Multilateral Trading Facility (MTF) licence from the U.K.’s Financial Conduct Authority. The licence will allow for institutional clients to trade on the futures platform who would otherwise be prohibited by law from trading on unlicensed exchanges.
The news marks Crypto Facilities as the first and only licensed derivatives platform offering exposure to leveraged cryptocurrencies in the European Union, according to the company. Jesse Powell, the co-founder and CEO of Kraken, said sophisticated investors will now be able to access crypto derivatives in the EU “for the first time.”
DeFi Hits $2 Billion in Total Value Locked
The decentralised finance (DeFi) market continues to see outsized demand with now more than $2 billion in total value of collateral “locked” in open finance protocols, according to DeFi Pulse. The Block Open Finance Index, a novel metric for quantifying growth in the Open Finance industry which aggregates vertical-specific metrics – including outstanding debt for lending, transaction volume for payments, and DEX volumes – has grown more than 10 times within the last month.
The surge in the DeFi market appears to be a result of “yield farming” craze, or because people are trying to secure the highest possible yield from various DeFi products and protocols.
Steven Livera Podcast: How Many Bitcoins Are Being HODLed?
Crypto Dollars: The Story so Far
Nic Carter and Matt Walsh of Castle Island Ventures have written a compelling overview of the evolution of digital dollars, an interesting read for anyone trying to keep up with what’s happening in stablecoins (fiat-backed as well as synthetic) and central bank digital currencies.
Our Founder and CEO, Oliver von Landsberg-Sadie, joined Iconic Holding’s Pat Lowry on the latest episode of Blockchat to explore the banking needs of crypto companies, how the FCA is tackling regulation in the space and how BCB is servicing the major crypto exchanges.