Are Traders Exploiting The Bitcoin Futures ETF Roll?

Bitcoin Is Again Flirting With The 50-Week MA

The latest moves in crypto markets, in context Edited by Omkar Godbole December 17, 2021 Sponsored by     Bitcoin (BTC) See the latest price here Ether (ETH)  See the latest price here If you were forwarded this newsletter and would like to receive it, sign up here.  Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: Are Traders Exploiting The Bitcoin Futures ETF Roll? Technician's Take: Bitcoin Is Again Flirting With 50-Week MA And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. Today's show will feature guests: Max Chafkin, author of "The Contrarian" Fred Pye, founder and CEO of 3iQ Irina Karagyaur, head of metaverse growth, Unique Network – Omkar Market Moves by Shaurya Malwa and Omkar Godbole Crypto markets took a tumble in early Friday as financial regulators in the U.S. and U.K. took measures to curb growing inflation concerns earlier this week.   Bitcoin followed a slide in global technology stocks, falling nearly $1,000 to $46,800 during Asian hours. Tokens of Terra (LUNA), a high-speed blockchain, were among the only cryptocurrencies to post gains with a 6% increase over 24 hours. They rose to a high of $67 Thursday before retreating to $64 on Friday.   Tokens of Elrond, Mina, and XDC network were the biggest losers among all coins with a market capitalization of above $1 billion, data from CoinMarketCap showed.    A stand out among altcoins was YFI, the governance token of the Ethereum-based DeFi project Yearn Finance. YFI jumped 18% on after its developers announced the completion of a $7.5 million buyback, for 282.4 tokens, from the open market.     "Cryptocurrencies and the traditional market are trading down today in an initial response to various Central Banks around the world cutting back on bond purchases and other stimuli introduced at the onset of the COVID-19 pandemic," said Bod Reid, founder of crypto payments tool Everest, in a Telegram message.   Traders front-running bitcoin ETF?     According to Bank for International Settlements, the predictable rebalancing behavior of the ETF may also give rise to 'front-running' incentives, motivating investors to purchase longer-dated bitcoin futures in anticipation of the ETF rolling into those contracts.    The futures-based exchange-traded funds (ETFs), which went live in October and November, gain exposure to bitcoin through regulated futures contracts trading on the Chicago Mercantile Exchange (CME) rather than owning the cryptocurrency. So, unlike ETFs that invest in stocks and gold, these futures-based ETFs must keep moving long positions from one expiry to another in a bid to mimic the cryptocurrency's price performance.   That leaves the door open for traders to buy the next month's contract and sell the expiring contract ahead of orders from ETFs. The funds end up paying more to buy the next month's contract and receive less for selling the current month, leading to a bigger rollover loss.   However, there are no signs of traders exploiting the known rebalancing. "We haven't noticed any front-running specifically related to rolling the BTF futures," Bill Cannon, head of ETF portfolio management at Valkyrie Investments, told CoinDesk. "Liquidity has been healthy and there haven't been any issues with execution."   "To successfully front-run, you need to be able to predict the short-term price moves of the underlying [asset] with relative confidence; the volatility of bitcoin and the crypto asset-class makes that a particularly difficult task, fraught with risk," Sui Chung, CEO of CF Benchmarks said in a Telegram chat. "What makes crypto products unique, therefore, is that the volatility of the underlying essentially makes front running unviable." Read the full story here: Valkyrie Counters BIS, Says Concern on Bitcoin ETF Front-Running Is Misplaced A Message from Bybit In case you missed it, Bybit is giving away up to $3,000 in bonuses to each new Bybit user! All you have to do is join the community and make a first ever deposit. The more you deposit, the higher your rewards. Plus, stand a chance to win 0.1 BTC or 1 ETH when you trade at least $100,000 in Spot and Derivatives combined. T&Cs apply. Event ends Jan. 3, 2022, 10AM UTC. *Terms and conditions apply. Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Top Gainers: There were no gainers Friday among the CoinDesk 20.  Top Losers:  Polkadot (DOT): -9.5%, Sector: Smart contract platform Internet computer (ICP): -8%, Sector: Computing Cosmos (ATOM): -6.8%, Sector: Smart contract platform  Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.  Technician's Take by Omkar Godbole Bitcoin Love Affair With 50-Week MA Continues Bitcoin's weekly chart (Source: TradingView) Bitcoin is again flirting with the long-held 50-week moving average. A firm UTC close under the key line on Sunday may invite more selling.  A Message from Amber Everyone wants to build wealth with simplicity and security. But how?   WhaleFin is a digital investing experience offering easy portfolio management tools, attractive investment yields, and access to the emerging digital lifestyle. With over $1T in volume traded, WhaleFin offers personalized, compliant, and secure service across dozens of digital assets in 150+ countries. And every investment on WhaleFin helps protect aquatic habitats and reduce atmospheric carbon by supporting WDC and Moss Earth.   Find out more ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:   AccuWeather Partners With Chainlink to Apply Weather Data on Blockchain, State of India's Crypto Ban and More   "First Mover" hosts speak to Senior Vice President of Business Development at Accuweather, Paul Lentz, as the company is now teaming up with Chainlink to apply weather data on the blockchain. WazirX Co-founder and COO Siddharth Menon shares crypto market analysis and the state of India's crypto regulation. Plus, CoinDesk Managing Editor for Global Policy & Regulation Nikhilesh De sheds light on relevant regulatory news. Latest Headlines DeFi 'Rug Pull' Scams Pulled In $2.8B This Year: Chainalysis 'Rug pulls' accounted for 37% of all scam revenue this year compared to just 1% in 2020. Terra One of Few Cryptos in Green While Bitcoin, Others Slide Gains from a brief rally following the Federal Reserve meeting earlier this week were erased amid a slide in global markets. Japan's Crypto Exchanges Grapple With Travel Rule as Deadline Looms The country's crypto exchanges want to stagger implementation of the rule, which will require them to share customer data on transactions above a certain threshold. Justin Sun Is Retiring From Tron – But Not Crypto Bitcoin's volatility makes front-running the ETF monthly rolls unviable, one observer said. Valkyrie Counters BIS, Says Concern on Bitcoin ETF Front-Running Is Misplaced The wall street bank sees blockchain as one of the most disruptive technologies since the advent of the internet. Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.  First Mover A newsletter from CoinDesk Were you forwarded this newsletter? 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