Bitcoin futures on its 10th birthday

Ledger wallet support has finally come to IOTA.

I tested it all out on Friday morning and it works flawlessly. No more storing IOTA on exchanges or USB flash drives.

If you own any IOTA I would highly recommend now storing it on a Ledger hardware wallet.

The benefits of using a hardware wallet are hard to overstate. Basically, if you own crypto, you should be storing it on a hardware wallet. I have covered this before, in detail, here.

If you currently own IOTA and store it on an exchange or on the old wallet, you can download the new Trinity desktop wallet with Ledger integration from trinity.iota.org.

Bakkt announces futures market will open on 12 December

If you’re a regular reader, you’ll know Bakkt is a story we have been following closely. If you’re not, here’s a short summary:

Bakkt is a new trading platform created by ICE, who owns the New York Stock Exchange and many other major exchanges around the world.

It is basically the biggest recognition the traditional world can ever give to crypto. It will be a huge platform that will enable traditional institutions and their clients to start trading and investing in crypto.

And it will start trading bitcoin futures on 12 December.

Here’s a notice from ICE on the opening. And here’s the most important part:

ICE Futures U.S., Inc. will list the new Bakkt Bitcoin (USD) Daily Futures Contract for trading on Wednesday, December 12, 2018.

The Bakkt Bitcoin (USD) Daily Futures Contract is a physically-settled daily futures contract for bitcoin held in Bakkt LLC, ICE’s Digital Asset Warehouse, and will be cleared by ICE Clear US, Inc.

Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse, and will trade in U.S. dollar terms. One daily contract will be listed for trading each Exchange Business Day.

As I have said before, the important thing here is that these futures contracts will be physically settled.

Here’s an explanation on physically-settled futures from Investopedia (emphasis mine):

With a physical delivery, the underlying asset of the option or derivatives contract is physically delivered on a predetermined delivery date. Let’s look at an example of physical delivery. Assume two parties enter into a one-year (March 2019) Crude Oil futures contract at a futures price of $58.40. Regardless of the commodity’s spot price on the settlement date, the buyer is obligated to purchase 1,000 barrels of crude oil (unit for 1 crude oil futures contract) from the seller. If the spot price on the agreed settlement day sometime in March is below $58.40, the long contract holder loses and the short position gains. If the spot price is above the futures price of $58.40, the long position profits, and the seller records a loss.

So, as you can see, unlike cash-settled futures, like we saw open around this time last year, physically-settled ones will mean people actually have to buy bitcoin.

This is why Bakkt’s futures could have a massive impact on bitcoin’s price.

But futures are just one small part of what Bakkt will be doing. I’ll update you on more of that, and how it could affect the crypto markets, as its services launch.

MapleChange exchange “hacked” users’ funds lost

This is yet another example of why you should never store your crypto funds on an exchange. And it highlights why it is such good news that you can now store IOTA on a Ledger wallet.

When this first happened there was some debate as to whether the people who run the exchange had imply run off with everyone’s money, or if they really were hacked.

It didn’t help that immediately after the hack it shut down its website and all social media channels except Twitter.

Then on Twitter it announced no one would be getting their funds back:

It later claimed to be returning user funds of most altcoins, but not bitcoin or Litecoin.

CCN reports:

According to MapleChange, the attackers were able to do trades worth about 15 bitcoins, but they were only able to withdraw about 8 bitcoins as that was all that was actually available. It seems there were several issues with the exchange’s structure, that these problems could occur in the first place.

MapleChange took issue with reports on the hack and explained that they had “not disappeared,” though their website and social media accounts had been taken offline on Sunday. They maligned media outlets that they claim “spewed” regarding the exchange’s troubles, but were primarily upset about reporting that had insinuated that the exchange had at some point held 919 bitcoins. Quite the contrary, the exchange’s total volume was frequently under 2BTC.

The moral of the story here is, only use big, reputable exchanges like Binance, Coinbase, Bittrex, Gemini and Kraken. Or even better, decentralised exchanges like Kyber and AirSwap.

In decentralised exchanges your funds are never in the possession of the exchange. The exchange simply facilitates the trade and you send and receive your funds directly through your hardware wallet.

I’ve written about this before here.

Okay, that’s all for today.

Well, almost. I’d be remiss if I didn’t acknowledge bitcoin’s 10th birthday.

That’s right, the bitcoin white paper was first released on 31 October 2008, although it wasn’t until 3 January 2009 when bitcoin actually went live.

It will be interesting to see where bitcoin is in another decade’s time…

Until next time,

Harry Hamburg
Editor, Exponential Investor

PS Devcon 4 is taking place over this weekend (I say this weekend, as I’m writing this on Friday. But by the time you read this it’ll really be last weekend). Devcon is one of the biggest events in the Ethereum calendar and there are sure to be many big stories coming out of it. I’ll write an update on the most important developments next week.

Category: Cryptocurrency

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