From Mark Cuban calling for crypto regulation to China's bitcoin mining crackdown: 7 key crypto moments from the past week

From Mark Cuban calling for crypto regulation to China’s bitcoin mining crackdown: 7 key crypto moments from the past week

Owner Mark Cuban of the Dallas Mavericks reacts against the Miami Heat during the second half at American Airlines Arena on February 28, 2020 in Miami, Florida.

From China’s bitcoin mining crackdown to billionaire investor Mark Cuban’s DeFi investment crash, a lot happened in crypto over the past week. With the top cryptocurrencies by market value remaining in the red Monday afternoon, here are seven things worth knowing.

1. Kim Kardashian West was paid to advertise a digital coin on Instagram

Influencers, such as the D’Amelio family and Tana Mongeau, have started to post paid advertisements on their social media platforms for different digital coins and exchanges. Kim Kardashian West made headlines after posting an ad for altcoin ethereummax on her Instagram story on June 13 to her 228 million followers. Followed by a short clip of her speaking to her camera about ethereummax with “#ad” written at the bottom of the screen, Kardashian West posted text: “Are you guys into crypto???” “This is not financial advice but sharing what my friends told me about the ethereum max token!” the post read. She added several hashtags, including #ad, which is required in order to disclose that her post is paid for.

2. China’s bitcoin miners are migrating

3. Maxine Waters forms ‘digital assets working group’

During a House Financial Services committee hearing on central bank digital currencies, or CBDCs, committee chairwoman Rep. Maxine Waters, D-Calif., announced the creation of a “digital assets working group.” “As cryptocurrencies, central bank digital currencies and other digital assets enter the mainstream, the Committee will look at how digital assets have begun to enter many aspects of our lives … and consider how to devise legislation to support responsible innovation that protects consumers and investors while promoting greater financial inclusion,” Waters said Tuesday. Members of the working group will also work on matters related to the possible creation of a CBDC in the U.S., she said.

4. The World Bank refuses to assist El Salvador’s implementation of bitcoin as legal tender

El Salvador passed a new law to adopt bitcoin as legal tender on June 9, becoming the first country to do so. But, the World Bank will not assist El Salvador in implementing it, Reuters reported Wednesday. “We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” a World Bank spokesperson told Reuters. “While the government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.” Earlier on Wednesday, the finance minister of El Salvador, Alejandro Zelaya, said the country did seek technical assistance from the World Bank.

5. Mark Cuban calls for regulation after his DeFi token investment crashed

6. Goldman Sachs ramps up bitcoin trading

Goldman Sachs is trading bitcoin futures with Galaxy Digital, the crypto merchant bank founded by Mike Novogratz, CNBC reported Friday. “Our goal is to equip our clients with best-execution pricing and secure access to the assets they want to trade,” Max Minton, head of digital assets for Goldman’s Asia-Pacific region, said in a statement. “In 2021, this now includes crypto, and we are pleased to have found a partner with a broad range of liquidity venues and differentiated derivatives capabilities spanning the cryptocurrency ecosystem.”

7. MicroStrategy now owns over 100,000 bitcoins worth around $3 billion

Ethereum faces largest ever options expiry as bears appear to dominate

Ether (ETH) faces its largest options expiry ever on June 25 as nearly $1.5 billion out of $3.3 billion notional open interest (OI) in ETH options will expire. June’s expiry has over 638,000 ETH options contracts in its purview, accounting for 45% of the total open interest in these options.

Although it’s the largest options expiry in the history of the derivative product, the open interest in ETH options OI hit its all-time high of nearly $5.5 billion on May 20 soon after ETH had hit its all-time high of $4,362 on May 12.

The huge expiry amid the ongoing market-wide pull is indicative of increased interest in the ETH derivatives market despite the token trading in the $2,270 range, 47.61% lower than its all-time high from mid-May. Luuk Strijers, chief commercial officer of crypto derivatives exchange Deribit, told Cointelegraph:

“The put call ratio for the June expiry is 0.79, which indicates there are more calls outstanding versus puts (64,000 more). This is indeed indicative for bullish sentiment, however, the majority of this OI is held in contracts quite far away from the current ETH price, indicating a low likelihood of expiring in the money.”

Although, Robbie Liu, analyst at the Market Insights team of OKEx — a cryptocurrency exchange — pointed out what this gap in price indicates, “The expiry is still dominated by the bears since a significant amount of call options are a long way off the current price. For example, the largest OI is concentrated in strikes at the mark of $3,200 for call options.”

Call options contracts allow holders to buy Ether at a predetermined price on the date of expiry, while put options contracts allow them to sell Ether under similar pre-requisites. Under usual circumstances, call options are used to supplement bullish strategies, while put options are utilized as hedges against negative price movements of the underlying.

The max pain price for this record expiry is $1,920. This price being the point where the largest number of options are at a loss, it is highly unlikely that the price of ETH will drop more than 10% from its current trading range. Although, as witnessed on May 19, a day now more commonly known as Black Wednesday in the cryptoverse, seasoned investors would never say never.

Strijers further explained the impact of the growing open interest in terms of the number of contracts: “Due to the growing size of our open interest pool, we notice our options expiries are becoming more and more important liquidity and risk transfer events creating a virtuous circle.”

He also added that even though the notional open interest of the ETH options has decreased in terms of United States dollar value due to the decline in the spot price, the open interest measured in contracts has barely been impacted by the price drop. This indicates the sustained interest in the Ether derivatives market despite the price slump.

CME data shows rising institutional demand

The Chicago Mercantile Exchange, the world’s largest derivatives exchange, launched its Ether futures product on Feb. 8 earlier this year. The highly anticipated launch witnessed more than $30 million of volume on the first day of trading on the exchange.

According to a report by OKEx, the launch of CME Ether Futures comes as a “nod of approval” from the most widely used exchange for derivatives products. Richard Delany, a senior analyst from the OKEx Insights team, opined further that, “This does indeed appear to have attracted significant institutional interest to the number two cryptocurrency.”

However, Delany also pointed out that market conditions and context surrounding the launch are quite different when compared to the launch of CME’s Bitcoin Futures in December 2017. The launch of the CME’s Bitcoin (BTC) futures came during an extended bear market when interest in digital currencies had waned across the board, and the product provided exposure to the flagship cryptocurrency for institutions unable to access channels available for retail investors. Delany added:

“In the more than three years since CME BTC futures launched, familiarity with such crypto trading instruments has proliferated, leading to massive growth in both CME BTC futures and their newer ETH counterparts. Despite the recent market correction, interest in cryptocurrency generally remains much greater than in early 2018.”

According to data provided to Cointelegraph by the CME, its Ether futures contract had an average daily volume (ADV) in May of 5,895 contracts, and the average open interest in May is 3,082, which is equivalent to $6.86 million in notional value.

The record trading day for the CME Ether futures contract was on May 19, which amounted to a total of 11,980 contracts, or $26.5 million worth of options. The record for open interest of 3,977 contracts came through on June 1, equivalent to $8.82 million at the current market price of the token.

The large open interest holders (LOIH) in this derivatives contract also hit a high of 45 on May 25, with the average for May being 37 LOIHs. Each LOIH holds at least 25 futures contracts, which are equivalent to 1,250 ETH or $2.7 million in notional value at least at the time of writing. However, Strijers explained why this growth was limited, “CME has realized around $400 million in ETH open interest. Growth of this amount is somewhat limited due to the lack of current yield, which was a big driver for CME volumes.”

However, the spokesperson from CME also mentioned that currently, it doesn’t have a plan to include additional cryptocurrency products like Ether options in their product suite, which includes Bitcoin and Micro Bitcoin futures, Bitcoin options and Ether futures.

Correlation between BTC and ETH

Ether’s correlation with Bitcoin saw a drop in early May to the sub 0.6 levels due to completely independent price movements that Ether made during that period. The one-month correlation was between 0.7 and 0.8 in April before dropping to 0.5–0.6 in early May, but it rebounded drastically to 0.9 in early June, holding high levels since.

BTC/ETH 30-day correlation

However, in the recent BTC rally to $41,000, ETH showed rather limited price movement, consistently trading in the $2,400–2,500 range throughout the rally, which was driven by the news of El Salvador becoming the first country to accept Bitcoin as legal tender. Liu pointed out, “In the recent past, the rebound of ETH has not gained as much momentum as BTC, with the price of ETH/BTC having fallen 20% since its June 7 high.”

Related: An asset for all classes: What to expect from Bitcoin as a legal tender

Since the positive price trend for BTC before May 16, Bitcoin has been steadily dropping to around the $35,500 mark, dragging ETH along with it to trade in the $2,200 range, which amounted to a 6% drop in 24 hours. Liu mentioned why ETH could take longer to rebound from the ongoing price slump than BTC:

“If we look back to the beginning of 2018, ETH likewise set its all-time high price a month after BTC topped out. And then ETH/BTC experienced a two-month decline before the trend reversed. It will take longer for the market to reverse ETH’s momentum.”

However, for the Ethereum network, June brought in improvement in one important aspect: gas fees. The network transaction fees for both Bitcoin and Ethereum hit a six-month low on June 1.

This change occurred in June, nearly two months after the Berlin hard fork took place on April 13, which was the initial step that the network is taking toward addressing the highly concerning gas fee issue that has been plaguing the network for a long time. Liu opined further:

“The constant high gas fees in March and April were clearly a major reason for the transfer of funds to EVMs and sidechains, which led to the total value locked in BSC surging. Also, in the mid-May sell-off, Ethereum gas fees spiking above 1,000 gwei caused DeFi participants to start moving to Polygon.”

Even though the lower gas fees can be purely a result of lesser transactions and congestion in the network rather than a scalability fix to the network, it still brings much-needed relief to investors and decentralized finance users alike.

As the price momentum in the top two cryptocurrencies continues to drop, it will be interesting to observe the changes that this $1.5-billion bear-dominated expiry will bring for the Ethereum network and the price of its token.

Kim Kardashian Fangirls ETH Max: What is Happening? By DailyCoin

Kim Kardashian Fangirls ETH Max: What is Happening?

Max has a heavyweight fangirl – Kim Kardashian.

The socialite posted about the project to her over 228 million followers on Instagram.

Kim Kardashian is not the first celebrity to publicize ETH Max, with Floyd Mayweather and Paul Pierce showing support.

Launched about a month ago, ETH Max has garnered significant steam following some impressive marketing schemes.

Ethereum Max is an ERC-20 token that was launched about a month ago. It reached the public eye following clever marketing strategies which saw a host of influencers subtly advocate for the token. The latest of these is Kim Kardashian who posted about the Ethereum Max token to her 228 million+ followers.

Before her post, sports personalities, Floyd Mayweather and Paul Pierce have already advocated for the project. Kim Kardashian’s post is iconic for the crypto community, and is most likely the crypto promotion with the largest social influence.

Ethereum Max has gone on to strike some enticing deals of its own; recently it was the “exclusive cryptocurrency for online ticket purchasing” for the Mayweather vs. Paul fight.

Kim Kardashian: New Fangirl

On Monday, cryptocurrency circles were agog with diverse opinions after Kim Kardashian made a post that could be construed as an advertisement for a crypto project, ETH Max.

Excerpts from the post indicate that it should not be taken as financial advice and that “Ethereum Max has burned 400 trillion tokens” of their admin wallet, as a means of giving back to the Ethereum Max community.

Kardashian’s post acknowledges that it is an advertisement. This is not the first time that Ethereum Max has received publicity from celebrities; undefeated boxer Floyd Mayweather wore an Ethereum Max-themed T-shirt to the 2021 Conference that took place in Miami.

Aside from Kim Kardashian and Floyd Mayweather, Paul Pierce tweeted about Ethereum Max stating that he had made more money with the token than working for ESPN.

The Hall of Famer and ex Bolton Celtic forward made the tweet concerning his departure from ESPN saying,

“I made more money with this crypto in the past month than I did with y’all in a year.”

On the Flipside

The delay in the release of the Q3 roadmap by Ethereum Max after the Mayweather v Paul bout casts a shadow of doubt on the network.

Ethereum Max currently trades at $0.0000001477 representing a 15.31% decline over the last 24 hours.

Ethereum Max

Ethereum Max launched roughly a month ago and has a total supply of a staggering 2 quadrillion EMAX.

Breaking away from the norm, 100% of the token were released in the open market, and utilitywise, EMAX, an ERC20 token, was made with the intent of providing users with the security and wide capabilities of the Ethereum blockchain.

So far, Ethereum Max has delivered two promising prospects. On May 26th, Ethereum Max issued a press statement stating that it is the exclusive cryptocurrency for the purchase of online tickets for the widely anticipated bout between Floyd Mayweather and Logan Paul. In another related development, the project released a press statement saying that it had struck a lucrative partnership with Miami’s Groot Hospitality, making the token payment for two nightclubs.

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