Newsletter - January 2021

Newsletter Feb 08, 2021

Dear respected partners,

Welcome to the fourth edition of our monthly crypto industry newsletter. Each month, you will get a snapshot of the crypto-markets as seen through our lens. Expect new segments, features and research to be added along the way.


Company updates

SheeldMarket ships out "Batch orders"

On the one hand you have sophisticated traders using algorithms to trade crypto through API. On the other hand you have manual traders using Web GUI or even Phone Apps to place one off orders. What about all the people sitting in between? They do not need the sophistication of algorithms but definitely trade too often to do so correctly by entering multiple manual orders, many times over the trading day.


Enter SheeldMarket's Batch Orders: Just prepare all your orders in an Excel file in advance, upload it, sit back and let our system do the work. The possibilities are endless as you can combine starting and stopping conditions (time, volume, price, PnL, etc) and trading algorithms (Routing, VWAP, TWAP, Participation Of Volume and many more) to achieve virtually any kind of trading styles and programs (as shown below)

Because markets keep evolving, you can change your mind at any time. Just cancel the batch, edit your Excel file to accommodate your new strategies and upload again. You can even upload as many batches as you need.

Enjoy!


Industry highlights

Visa to help banks offer crypto purchase services

Visa will offer API services allowing customers to buy and sell crypto-currencies directly within partner bank ecosystems. Visa will use Anchorage as a custodian, and First Boulevard for API infrastructure. Anchorage obtained a federal bank charter at the beginning of the month.

Jacques’ take: One of the hurdles of getting into the crypto ecosystem is the ability for regular, non professional people to easily and securely buy and sell bitcoins. Once that hurdle is lifted I expect a liquidity boom in the short term. Longer term? The next logical step is for crypto assets to land on retirement and savings accounts which will open whole new opportunities for asset managers and pension funds.

Read more

Goldman Sachs working on crypto custody offering

The Tier 1 investment bank is “exploring digital custody and deciding what the next step is” according to an inside source. Prime Brokerage is not considered though, as they think “Anchorage, Bitgo and Coinbase have quite grand plans”.

Oliver’s take: Goldman is a large firm, with many divergent factions within. It might take a while for them to put such an offering on the market, especially if it’s for regular crypto, and not “tokenized securities”’.

Read more

Genesis originated $7.6B in crypto-loans during Q4 2020

One of the largest crypto-currency trading and lending firms in the world, Genesis, originated $7.6B is cash and crypto loans during Q4 2020. This represents a 55.6% increase in cumulative originations since Q3 2020. Currently, over 50% of their loan portfolio consists of Bitcoin.

FX’s view: One of the most impressive figures is the average loan size for first-time lenders that jumped by 538% between Q3 and Q4 from $590k to $3.2mn. This jump is definitely a sign institutions are investing in the crypto market.

Read more

French central bank tests CBDC in financial transaction

The Banque de France conducted an experiment in which institutional investors purchased 2M€ worth of monetary funds using a stablecoin issued and controlled by the central bank and indexed to the euro. Blockchain protocol SETL handled the infrastructure.

Oliver’s take : The French administration has been at the forefront of crypto frameworks, most recently with its comprehensive DASP framework. We’re expecting France to be the first EU country to put a euro CBDC in production

Read more


Market insights

Illegal crypto transactions fell to all time low in 2020...

Crypto-currency transactions associated with illegal activity fell to 0.34% of all transactions, down from 2.1% in 2019.

Simon’s take: Institutional investors joining the party are diluting the flow of illegal activities. Even though notional value decline is not as spectacular as percentage decline, this still reflects the tremendous efforts made by crypto service providers to align their compliance processes to the highest standards and get regulated. Efforts rewarded!

Read more

Institutional investors prefer BTC over gold, according to JPMorgan

In a research note posted on November 6, JPMorgan analysts noted cumulative inflows to Greyscale’s Bitcoin trust through October, whereas gold ETFs saw “modest outflows”. According to them, this move supports the idea that investors previously interested in gold ETF are now looking at BTC as an alternative.

SheeldMarket’s take: Bitcoin’s role as an alternative to fiat currency is yet to be determined, due to high volatility levels. On the other hand, its hard-coded scarcity and minting mechanisms imply strong similarities with gold.

Read more


In-house analysis

"Buy crypto" hit a new all-time high in Google searches. No wonder why. After the massive inflow from Institutional Investors in December & January, now comes the retail wave.

You can observe this in the futures analytics: the first half of January BTC futures trading was on the average of $75bn per day when in the 2nd half it dropped below $50bn a day. CME average daily trading volume dropped also massively which is a good indicator of a slow down of investments from traditional finance.

On the options side Deribit keeps crushing competition in terms of volume and open interests.

A recent outflow of BTC from exchanges ($500mn) is a long term bullish signal as they have been apparently moved to some cold storage (source: Cointelegraph). It contrasts with the Long/Short positioning Indicators that dropped significantly on different exchanges recently (Binance, Huobi, OKEx).

Exchange’s top traders BTC long-to-short ratio. Source: Bybt.com

Additional news.

DeFi keeps moving higher with a total assets registered of $32.8bn, a 197% increase over the past 3 months.

Paypal expectations about crypto already beaten: 16mn new customers since the crypto launch and indicators in the green zone. Crypto investors connect twice as much on the platform than regular customers.

Thanks,

The SheeldMarket team


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Oliver Yates

Founder & CEO @ SheeldMarket Solving complex problems with simple solutions

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