Huobi Futures to launch bitcoin options on 1 September - HedgeWeek

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Huobi Futures to launch bitcoin options on 1 September - HedgeWeek Posted: 31 Aug 2020 02:58 AM PDT Huobi Futures, the crypto derivatives market of Huobi Group, is to launch bitcoin (BTC) options for trading on 1 September 1st at 10:00 UTC.  The new options product follows the successful roll-out of Huobi Futures' Perpetual Swaps earlier this year and aims to give traders more ways to create arbitrage and hedge risk in the crypto market. Similar to options in traditional financial markets, Huobi's BTC option is a derivative product that gives users the right, but not the obligation, to buy or sell BTC at an agreed upon price and date. Call options give the options buyer the right to buy the underlying asset at a specified price on the expiration date, while put options give options buyer the right to sell a specified amount of an underlying asset at a specified price on the expiration date. "As investors brace for prolonged economic uncertainty across global financial markets, the influx of institutional capital and other forms of 'smart money' into digital assets like Bitcoin are driving a surge in demand for more diverse trading products," says Ciara Sun, Vice President of Global Business at Huobi Group. "Our new options product was launched in response to market demand and this economic new reality. With this latest addition to our growing line-up of derivative products like Perpetual Swaps and Futures, we're giving users a robust set of tools to execute more sophisticated trading strategies." Huobi's exchange-traded BTC options are quoted in USDT and offered in increments of weekly, bi-weekly, and quarterly options. Options on Huobi are European Options, a version of an options contract that limits execution to its expiration date. When the options expire, the arithmetic average of the index prices in the last hour is used as the delivery price. Both the options buyer and seller can close positions before the expiry or hold until the expiration date. As more sophisticated investors enter the crypto market, Huobi has experienced a surge in derivatives trading volume, which is indicative of the broader market. In the aggregate, growth in crypto derivatives trading volume is now outpacing that of spot trading. According to data analytics company Cryptocompare, cryptocurrency derivatives trading volumes climbed 32 per cent in May of this year to a new record high of USD602 billion, compared to 5 per cent growth in total spot trading volumes. With the surge in derivatives trading, options can provide lower risk as the maximum loss an options holder can incur is the options Premium, with no limit on gains. When used in conjunction with other trading strategies, options can also help traders hedge against risks like extreme market volatility. Sun adds, "Financial instruments like options don't guarantee profits, but they do provide traders with greater flexibility and more opportunities. More importantly, we're giving users access to an options product backed by the security and reliability they've come to expect from a global exchange like Huobi." In the coming months, Huobi Futures plans to add options support for other major cryptocurrencies.

Grayscale: Bitcoin Market ‘Looks Like 2016, Before Historic Bull Run’ - Cointelegraph Posted: 21 Aug 2020 12:00 AM PDT A new report by crypto fund manager Grayscale Investments argues that the current Bitcoin (BTC) market structure "parallels that of early 2016 before it began its historic bull run." Grayscale predicts that demand for Bitcoin will significantly grow as inflation accelerates, highlighting the need for a scarce monetary commodity, bolstering the use-case of the cryptocurrency. The report identifies several on-chain indicators showing growing interest in crypto, noting an increase in long-term holding over short-term speculation, amid historic lows for the number of Bitcoin held on exchanges. Grayscale also notes that daily active addresses are at their highest level since 2017's all-time highs. The report asserts that loosening monetary policy from the United States' abandonment of the gold standard onwards have created cycles of debt-fuelled asset bubbles followed by aggressive quantitative easing. Grayscale notes the increasing dependence of the U.S. economy on quantitative easing (money printing) to stay afloat and that history shows it's an addiction difficult to quit.The S&P dropped 20% over three months in response to the Federal Reserve floating plans to reverse its monetary expansion in 2018. Despite the US dollar remaining "structurally strong relative to other currencies" the report asserts that investors who are wary of inflation amid the "unprecedented monetary and fiscal stimulus" are searching for ways to protect against the ever-expanding money supply — bolstering the case for Bitcoin as a store of value. Grayscale cites the scoring system used by hedge fund manager Paul Tudor Jones to assess Bitcoin's attributes against cash, gold, and financial assets and determine the market's growth potential. Quoting Jones, the report noted: "What was surprising to me was [...] that Bitcoin scored as high as it did. Bitcoin had an overall score of nearly 60% of that of financial but has a market cap that is 1/1200th of that. It scored 66% of gold as a store of value, but has a market cap that is 1/60th of gold's outstanding value." "Something appears wrong here and my guess is it is the price of Bitcoin," Jones concluded.

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