Author: coins520

BTSE, a derivatives exchange which focuses on futures trading, launched in 2019 has announced today it will be donating 80000$ to the open source peer to peer payments processors BTCPay.

The entirety of the 80000$ will be given to one of the main contributors of the project Andrew Camilleri. Also going by the name ‘Kukks’. The donation will enable Kukks to work full time on the project. In BTCPay’s blog post Kukks shares his own thoughts.

Even though it’s been rough financially, it was worth it. I’ve learned more in this past year and a half than I have in my entire career combined, all thanks to BTCPay Server and its community.

Kukks

BTCPay which is entirely supported by donations describes itself as “an open source, self-hosted payment processor for Bitcoin and other cryptocurrencies”. The main aims of the project are to eliminate fees, KYC, and middlemen when transacting Bitcoin. All things we associate with typical payment processors.

BTSE joins a collection of 5 other corporate entities supporting the BTCPay project. Alongside community donations. CEO of BTSE, Johnathan Leong had this to say on Twitter.

We see @BtcpayServer as an important infrastructure within #Bitcoin‘s ecosystem, and we want to support its development.

Johnathan Leong – CEO of BTSE

Bitcoin was and is founded on community, charity, and voluntary work. It’s encouraging to see the continuity of these principles all these years later.

The crypto exchange industry has rapidly developed over the past two to three years. We saw the rise of cryptocurrency derivatives. Platforms like BitMEX, Deribit, and FTX seemingly came out of nowhere and consumed the market share of more traditonal exchanges like Coinbase, Bitfinex, and Binance. Now, In steps Interdax.

Interdax aims to even further develop the industry in a different but interesting way. Through gamification. Primarily trading competitions.

The Foundations of Interdax

Interdax was founded all the way back in 2017 by a team of former financial professionals. Hailing from the New York Stock Exchange, NASDAQ, and Goldman Sachs among many others.

Though they were founded in 2017 they remained relatively quiet until late 2018 continuing to develop the platform until they eventually came out of their dark lit room to announce their project. Eventually launching it in beta in 2019.

The Interdax Platform

On its surface Interdax is your run of the mill derivatives exchange. Having what you would expect. A straight forward user interface. Fees for trading are the industry standard. Opening and closing orders is smooth and easy. It has all your standard order types. Limit, stop limit, market, and stop market orders.

Liquidity

Liquidity is okay. Not the best, but certainly not the worst. You will have trouble getting filled if you are trading large sizes but medium to small traders will have no issues. And if the platform can continue to attract more users then these liquidity problems will begin to lessen.

Trading Pairs and Margin

Another issue I have is the lack of trading pairs. At the time of writing there is only one trading pair. A Bitcoin perpetual swap contract. Although understandable that an exchange in its infancy has only one trading pair it would be nice to have more.

Interdax offers the much loved support for up to 100x leverage.

Security/KYC and AML

In terms of security Interdax has standard 2FA as well as support for PGP email encryption.

Interdax though having offices in London is registered in Seychelles. This means that its not subject to strict KYC and AML laws. KYC is thus not required on the Interdax platform.

Interdax Trading Competitions

But reviewing a standard derivatives exchange like above is not really what this article is about. We’re trying to see what new ideas Interdax are bringing. And those new ideas are its trading competitions.

How They Work

Trading competitions aren’t very complex. You simply trade for an allotted time period with a certain amount of capital and the winner is the one who has the highest return.

Competitions on Interdax work exactly like this. You trade for a certain time period and the winner is the one who has the highest return. Also recieving a prize in Bitcoin on top of their earnings from the competition.

How to Sign Up

Signing up for a trading competition is very simple. You simply navigate to the battles tab on the top of the screen as shown.

Once there you will be presented with this screen below. It lists all the current active and future tournaments you can join. It gives information on the prize as well as the required ‘trading stack’. The trading stack is essentially the amount of Bitcoin you will be trading with. You need to have this in your account balance to enter the competition.

During my time using the platform the required trading stack for competitions varied from to 0.01BTC to 2BTC so there’s something for everyone.

To join the competition you click view and will be presented with the screen below. Click join to get signed up.

After clicking join you will be asked to move Bitcoin from your account into your battle sub-account. You can cancel any time before the competition starts and these funds will be moved back into your main account. Similarly after the competition ends these funds will be moved back into your main account plus or minus any profit or loss.

Congrats you’re all signed up. Once the competition begins you can view the leader board and competition from the battles tab to see how you’re doing.

Other Exchange Competitions

Interdax is not the first exchange nor the largest to do cryptocurrency trading competitions. Back in 2019 FTX launched its ‘Battle Royale’ trading competition very successfully with hundreds of traders entering. The competition lasted a number of weeks. But, it seems FTX only used that as a marketing ploy to draw in new users to the platform. They have only ran one smaller competition since.

In comparison to the competition Interdax seems like the only exchange that is actually committed to running consistent competitions for traders with constant open competitions for every type of trader. From ‘Saturday Skirmish’ to ‘Weekly Warriors’.

Conclusion

Interdax is not without a number of flaws which have been pointed out in this article. Lack of trading pairs and liquidity issues to name the main two. But these issues will fix themselves if the platform can continue to grow.

What Interdax does do right however is it trading competitions which I feel is the selling point that will generate the most interest. Crypto trading competitions are good in the sense that if you are an active trader you have nothing to lose. If you lose money that’s money you would of lost anyway on another platform. But if you trade successfully you can manage to net a nice bonus.

Having been in around crypto trading circles for a number of years now there has always been strong demand for attempts at gamifying crypto trading and if Interdax can continue on their positive path forward chances are that they will successfully meet that demand.

One of the major players to emerge from the cryptocurrency industry last year was FTX. Launching in mid 2019 on the back of an incredibly successful quantitative trading firm Alameda Research they took the exchange industry by storm becoming one of the top 5 exchanges by volume in a matter of weeks.

One of major keys to success that allowed FTX to become so prominent so quickly was its heavy focus on innovation. Having new and unique trading products such as altcoin indices or leveraged tokens brought droves of traders to the platform. And this innovation looks like its going to continue with the launch of options contracts.

Options contracts are a somewhat complicated financial product and their complexity goes well beyond the scope of this article. In the most simplest of forms they allow someone to buy or sell a specific asset at a certain price within a certain time frame. Buying an options contract when you expect it to go up is a ‘Call’. This is opposed to a ‘Put’ which is a contract to sell an asset at a specific price. You can get a better understanding of options here.

Options trading is not new, already doing billions of dollars in volume on traditional financial markets. However their growth in cryptocurrency markets is. They were first popularly launched by Deribit in 2018. But remained relatively difficult for large players to use fully due to liquidity issues. However the final quarter of 2019 brought a lot more interest.

With this growth of interest more exchanges are launching options trading. OKex recently launched options on their platform. The giant that is CME Group also just launched options trading contracts based on futures. We wouldn’t be surprised to see other giants like BitMEX dip their toes in soon.

FTX Options Trading in its first day alone did 1700BTC in volume.

Options contracts aren’t particularly exciting in themselves. What is interesting though is what they represent. They represent the somewhat continued exponential growth of sophistication in cryptocurrency markets. Whether this increased sophistication is a good thing or a bad thing is for you to decide..

BitcoinSV (BSV) has been shrouded in controversy over the past few months. One of the leading figures within the BSV camp and alleged creator of Bitcoin, Craig Wright has been involved in a number of legal battles. The main one being the Dave Kleiman estate case which alleges that Craig Wright infringed on Kleimans intellectual property to Bitcoin and defrauded him of Bitcoins.

The judge presiding over the case ordered that Craig Wright pay half of his Bitcoin mined between 2009-2013 to Kleiman. However Judge Reinhart stated the court was not required to state whether Craig was Sathoshi Nakamoto or not, or the amount of Bitcoin that Craig Wright has control over.

Craig Wright also tried to sue Peter McCormack of the ‘What Bitcoin Did’ podcast for libel in the UK.

However has BSV turned a corner? Seemingly so. As of writing BSV is up over 25% against Bitcoin on the day.

BSV also has some key fundamental events ahead which may contribute to the surge. The standout being the Coingeek conference on February 20th. Coingeek conferences are the major show pieces for BSV throughout the calendar year and highlight many future improvements to the BSV network and community. Previous Coingeek conferences have caused large price rallies.

Further, BSV has the Genesis hardfork occurring on February 4th. This fork will remove pay to script hash (P2SH). This came after Bitcoin developer Gregory Maxwell pointed out that it could be exploited via replay attack. The attack is done via a transaction being broadcast on BSV could risk being replayed on the BTC chain. However, the attack would require a dishonest miner to cooperate.

Maxwell was harshly criticized within the BSV community for failing to responsibly disclose this exploit, pointing out in his posts how to carry out the attack. Craig wright also described P2SH and Softforks in general as “Cancers”.

Though BSV is up and 25% and seems to have turned a corner hostilities between the different Bitcoin camps remains as potent as ever.

Binance came under scrutiny yesterday after a small number of Twitter users pointed out strange price behavior just before Ravencoin was listed for margin trading.

The controversy arose from what appears to be some form of insider trading.

At approximately 05.30 UTC time Ravencoin had a considerable price surge of close to 13% in 2 hours. Two hours later at 07:30 Binance announced via their official Twitter and Blog that Ravencoin will be added to their list of margin assets. The price chart below sums it up well.

Being added to the list of margin assets on Binance allows traders to use leverage to long or short Ravencoin.

The price surge before the announcement was even made lead some people to believe insider trading had occurred. Either with internal Binance staff themselves, or that the information was leaked to individuals outside of Binance early.

This is not the first time exchanges have been accused of insider trading. The most notable example was back in 2018 when Coinbase was accused of insider trading surrounding Bitcoin Cash.

The end of the decade is steadily encroaching so there is no better time to reflect back at the altcoin market over the past few years. The highs, the lows, the in between. And in doing so peak behind the curtain about what might happen in 2020 and beyond.

2017

Everyone remembers the glorious cryptocurrency market of 2017. It’s how many of us originally found out about Bitcoin and cryptocurrency. A time of complete financial euphoria. A period when it was harder to lose money than it was to make it. Waking up in the morning and checking Blockfolio to find that your portfolio was up 100% overnight. Coins going up 300% in an hour because they got listed on some obscure Korean exchange. People selling Binance accounts for 3000$ when they closed registrations. Telling your family to go all in over the dinner table at Christmas or Thanksgiving. Cryptocurrency plastered on the front page of the New York Times. The shenanigans with John McAfee pump and dumps. The list goes on and on.

2018

If 2017 was the year of euphoria, 2018 was the year of complete and utter despair. The year started off strong with the altcoin market continuing to pump to new all time highs. However, after January it took a turn for the worst.

The first emotion in cryptocurrency circles was complacency. “This is just a correction before we head for new all time highs” was a popular phrase. The perpetual green candles on the price charts had left people in a state of delusion unable to contemplate a reality where prices didn’t go up. The next emotion was worry. “What happens if this keeps going down?” This was closely followed by denial, then panic, anger and then finally capitulation.

Though Bitcoin dropped from 20,000$ to 3000$ the altcoin market was hit even worse. The selling seemed unstoppable. The XRPUSD chart sums it up best. A drop from a high of $3.30 to $0.22. But you can put in any altcoin here and get very similar results.

2019

This brings us up to the current year. Bitcoin started off the year strong with its price surge from 3000$ up to just under 14,000$. There was again a sense of skeptical optimism. However Bitcoin at the time of writing has fallen 50% from its local highs and the sense of dread is slowly creeping back.

Altcoins on the other hand were somewhat lagging behind. Some altcoin markets had a great start to the year. For example the exchange tokens such as BNB, LEO, and Huobi token all had a sharp increase in price before correcting. Coins like Tezos and Chainlink also went on their own runs.

However a surge in the altcoin market as a whole has not occurred and many altcoins continue to bleed and sell off.

2020 and Beyond

By looking at trends in these recent years we can speculate on what might occur in the altcoin market in future years. I will put forward some hypothesis arguing in favor and against the probability of future altcoin bull runs like 2017.

Why There Won’t be any Future Bullruns

The Rise of Derivatives Exchanges

You may ask what the rise of derivatives of exchanges has to do with the altcoin market. But lets look at the actual nature of altcoin markets. I think its a fair assessment to make that altcoin bull markets aren’t generated because there is genuine value in certain altcoins but rather they are created based around pure speculation and greed. People only buy altcoins because they want to get rich quick.

Now the rise of crypto derivatives exchanges such as BitMEX, FTX, and BTSE to name a few fulfills the exact same role. A way to get rich quick. These exchanges offer up to 100x leverage so now instead of buying altcoins people can simply gamble with 100x leverage on the price of Bitcoin.

There is no Value in Altcoins

This is perhaps the most simple of our explanations. Investors see little to no value in altcoins. Lets be honest with ourselves the altcoin market is ridden with projects that are going nowhere and have little value propositions. Sure, there may be some projects which check all the boxes. But lets ask ourselves is there really over 50 billion dollars of value in the altcoin market?

Lack of Retail Interest

The altcoin market is primarily driven by retail traders if there is no retail interest it is unlikely that altcoins will go up. If we look at current Google trends we see that there is very little search traffic for Bitcoin at the moment in comparison to 2017. If however Bitcoin goes on another bull run this may attract retail investors back to the space.

Why There Will be Future Bullruns

Human Greed

A bet against alt coin bull runs is a bet against humans ever being greedy and FOMOing again. I for one am never going to bet against that.

The Actual use of Cryptocurrency

If there is one thing for sure that will cause altcoins to go up is the actual use of coins and networks. Using these networks will cause increased demands for coins thus increasing the price. If people stopped using the Euro or Dollar tomorrow would they still be valuable? Probably not and Cryptocurrency is the same.

There has been increased interest in the use of cryptocurrencies especially in the corporate world if this trend can continue and coins can feed this demand then prices will rise.

Increased Regulation Certainty

Altcoins have always been in a grey area in terms of regulation in a number of juristicions namely China and the U.S. The U.S has remained rather strict in certain areas. However the president of China Xi Jingping has began to advocate for blockchain technology. If regulation can open up in these areas it may allow larger players to get involved.

In Conclusion

Altcoins have been around for quite a while at this stage this isn’t their first long term bear market and I doubt it will be their last. The future of the ‘Alt Season’ phenomenon is currently uncertain, it is anyone’s guess whether we see the likes of 2017 ever again. However I do think altcoins are here to stay.

As you may know there are a variety of strategy’s in trading. You may have heard of fundamental analysis where traders take all available information about a given market and derive a value based assessment about whether it is a buy or sell. There is also technical analysis which identifies trading opportunities in price trends and patterns seen on charts. However, one which you may not of heard is order flow analysis. Order flow analysis is a method that attempts to anticipate price movements based on the current orders that are visible in the market. It is this type of trading that TensorCharts is trying to make more prominent in the cryptocurrency market.

How Does Order Flow Analysis Work?

There are hundreds of different strategies within both technical and fundamental analysis based strategies. Order flow analysis is no different. In this article we will give a brief run down of some simpler strategies so you can get a feel for how order flow trading works. It will be up to you to manipulate these strategies for your needs and hopefully make profitable trades as a result.

Reading the Tape

This strategy is order flow trading in its simplest form. It is essentially reading the order book and making trades based off of this. For example if we take the below orderbook from BitMEX on TensorCharts. We see that there are large sellers on the book from 7330 to 7350 and so we may choose to sell.

This is a perfectly reasonable strategy and many people use it successfully. However there are a number of flaws with it, One issue is order spoofing. Order spoofing is the act of placing fake buys or sells on the market in order to spook the market and drive it in a desired direction. This can cause issues in our strategy as we may take trades based on large orders that may be removed. The infamous S&P500 flash crash of 2010 is an extreme example of what order spoofing can do to a market. Another issue is that most exchanges allow for traders to hide their orders from the order book so again we may miss crucial pieces of data.

Technical Analysis Confluence

This strategy takes elements from both technical analysis and order flow analysis. In the below image our red box shows our white resistance line and our yellow block from TensorCharts which represents a large resting sell order. Price went up above our resistance line and the large resting sell orders before continuing downwards again. The use of order flow analysis and technical analysis can be a powerful combination to first identify a support or resistance line and then try to identify whether it will hold based on orders in the market.

Scalping Liquidations

This strategy is perhaps the most exciting of our 3 strategies, yet, the most likely to induce heart attacks. It involves fast paced trading on low time frames (primarily on one minute candles) you can use what ever leverage you want but if you want to make it worth your time you are most likely going to have to use higher leverage due to low time frame nature of these trades.

This strategy relies on data from BitMEX so it is recommended you create an account there. To get started on this strategy you’ll want to navigate to the ‘BitMEX stats’ tab on TensorCharts. Highlighted Below.

You will be presented with an interface like the one below. You again want to focus on our beautiful red boxes. The box on top is just your standard Bitcoin price chart, the box on the bottom represents liquidations on BitMEX and is where our strategy lies. You can read the BitMEX documentation to fully understand how liquidations work. But Essentially liquidations create large market cascades which typically reverse.

We first want to identify these large liquidations typically I look for liquidations above at least 5 million and then buy/sell them. In the below chart notice how large liquidations typically reversed.

This strategy requires very stringent risk management as things can go badly very quickly. As mentioned this strategy is very fast and heart palpitations are probable. My average holding time for these types of trades is less than 45 mins you want to take profits relatively quickly as the market can always turn sharply against you. I use this strategy in conjunction with reading the order book to recognize if selling or buying is going to continue or if there is large orders coming in. Again I want to reiterate. If you want to use this strategy make sure you’re using stop losses and take profits quickly.

These three strategies only scratch the surface of order flow trading. Don’t be afraid to dig in and do your own research on different strategies or come up with your own.

Markets

TensorCharts has support for a number of different exchanges. Such as Binance, BitMEX, Bitfinex, and others. It even has support for some traditional markets such as CME currency, agriculture, energy, and metal futures. One slight problem I have is that even though TensorCharts has support for a number of crypto exchanges, there are only a few pairs listed on each exchange. For example, BitMEX only has XBTUSD and ETHUSD and is missing all of its altcoin futures contracts. Binance also lacks altcoin pairs. I don’t typically trade altcoins but if you do this is something you may want to keep in mind.

Scripting

TensorCharts has support for scripting so if you have programming experience that option is available to you. Javascript is the language used. TensorCharts has an active Discord where you can ask whatever questions you may have.

To Conclude

As the cryptocurrency market has grown over the past few years profitable trading has got increasingly more difficult. If you want to be a successful trader you really need a strong edge and a large trading tool belt. TensorCharts is one of the essentials in mine. Whether you’re brand new to trading or have been around the block everyone can find value in TensorCharts and orderflow analysis in general.

Traders are up in arms on Halloween night after a rather ‘spooky’ pricing error hit a number of top cryptocurrency exchanges and trading platforms.

The error is believed to have been caused by Coinbase going offline which put the index pricing of certain derivatives exchange out of line with the actual price. Index pricing is needed on derivatives exchanges such as FTX to ensure that the price of the derivative corresponds to the actual price of the underlying physical Bitcoin.

Perhaps the biggest exchange by volume that was effected is Deribit. Which does close to 500,000,000$ in buying and selling on average a day. The pricing error caused their popular Bitcoin perpetual swap contract to fall 2000$ to 7750$ a Bitcoin.

Deribit in the past few minutes has released a statement saying that trader equity will be brought back to normal levels of 9160$. However trades will not be rolled back. This effectively means traders who used stop losses and/or were liquidated will be refunded.

One slightly smaller derivatives exchanges was also effected by a similar pricing error. That exchange being BTSE which sharply increased in price to 15000$ before whipsawing back to 6500$. Support teams in BTSE’s telegram chat have said all issues are working on being resolved and traders will be compensated. Their market has remained down for 5 hours at the time of writing.

There has been a huge rise in the number of exchanges offering their own exchange tokens. The early days were brought about by Binance’s BNB token. Which launched during the famous bull run of 2017. Since its launch, returning over 13000%. Other major Exchanges like, Bitfinex, Huobi, Bitmax, Kucoin, among others have all launched their own exchange tokens since. The newest exchange token to be launched is FTT. Backed also by a brand new derivatives exchange FTX. But where does FTT fit into this already competitive market? Does it have good value propositions? Lets find out, this is our FTT Token Review.

The Exchange Itself

To review an Exchange token without reviewing the exchange itself would be futile. You can have the best value propositions ever but if you’re exchange is poor then your token will reflect that. We have previously gone in depth on the FTX Exchange in our FTX Exchange Review. However we will cover it briefly here.

As previously mentioned FTX is primarily a Cryptocurrency Derivatives Exchange. Derivatives trading is where the vast majority of cryptocurrency trading occurs and it is this market that FTX is targeting. The current market leader being BitMEX which has traded over 1 Trillion dollars in the past year alone.

FTX is currently giving BitMEX a run for its money. BitMEX’s essential monopoly on cryptocurrency derivatives trading lead them to complacency. Issues with downtime, order submission errors, among others all allowed FTX to pick up the pieces as traders looked for alternatives.

One of the main hurdles exchanges have right out of the gate is liquidity. If you don’t have liquidity you cannot attract users. FTX had this issue solved right from the beginning having been born from one of the largest liquidity providers in crypto Alameda Research.

FTX having solved the liquidity problem had the opportunity to put 100% of their attention towards innovation and innovate they did.

To put it in perspective BitMEX the major derivatives exchange in crypto only currently has 8 markets. Whereas FTX has over 100 tradeable pairs. Not only does it have a large quantity of markets but of these markets some are brand new. FTX has markets for leveraged tokens, indices for privacy coins, altcoins, and DeFi tokens, prediction markets, hashrate futures. Its innovative features such as Quant Zone which allows users to create quantitative trading scripts directly on the platform, and its trading competitions have enticed many traders to sign up for the exchange.

The Tokens Value Proposition

FTT’s token utility is not too dissimilar to something like Bitfinex’s LEO token. However, there are some unique elements.

Much like LEO and Binance’s BNB, FTX carries out token buy back and burns based off of revenue generated by the exchange. Currently 33% of all fees earned by FTX will be used to buy and burn FTT tokens. The thought process behind buy and burn schemes is to drive up the price of FTT tokens by continuously reducing the supply. What is however unique to FTT is the concept of socialized gains in which a portion of money added to the exchanges insurance fund will be used to buy back FTT.

The insurance fund is something exclusive to cryptocurrency derivatives exchanges and ensures users on the exchange are liquidated properly should their not be enough liquidity from traders to close someones position.

We’ve performed backtests and live simulations to see how FTX will fare during large market movements. While other futures exchanges suffered from clawbacks, FTX managed to net increase their insurance fund by a sizeable amount thanks to its unique backstop liquidity provider program. For instance, during a recent market move, Okex incurred ~$3 million of clawbacks. Meanwhile, our demo simulation which mirrored positions on OKEx demonstrated no clawbacks and a net gain of a million to our insurance fund.

FTT Token Whitepaper

Holders off FTT get the standard fee reduction on the exchange depending on how much FTT they hold. The fee reduction applies to both the live markets and OTC trading.

FTT can also be used alongside USD, USD Stablecoins, and BTC as collateral (to prevent liquidation) for trading on the exchange.

Conclusion

We pointed out the requirements for a successful exchange token at the beginning of this article. You need a solid exchange, which can generate consistent liquidity and attract new users. And you need a token that is actually worth something which will encourage people to buy it. You can’t just print a new ERC-20 token and throw some marketing behind it. Value propositions such as buybacks, and fee reductions, competition entrys, among others are absolute crucial.

In terms of both a solid exchange and token value propositions FTT has both