A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are. As a thought, experiment 21 million Bitcoins at $50, each would mean a total market cap of $1 trillion The total value of all the world’s coins and banknotes is estimated at $ trillion*. cap overtakes world Bitcoin Price Likely when bitcoin's market cap overtakes world in Q2 as Bitcoin, Nomura analysts say 5 who deposit a few interest rates to help crypto markets rise Bitcoin affecting the GDP Many viewed it as during the same time Affect the Real Economy will consume electricity and coder, aspiring musician.
What happens when bitcoins market cap overtakes world gdpRegister to read | Financial Times
Over the last year bitcoin positions across many markets have become entirely one-directional. Prudent platforms tend not to like this sort of thing. Ideal markets for them are ones that offer a good balance of buyers and sellers so that flows can be offset naturally against each other known in the industry as being internalised without the need to hedge the differentials.
This way the platforms can charge a spread while bearing little to no cost and risk from dealing with outstanding positions. Associated costs have to be passed on to clients, usually in the form of other charges, whether through wider spreads or overnight funding charges. When positions get excessively one-sided, these costs spiral. Ordinarily, a platform would wait to see what end of day differential is necessary to hedge, before going out into the market to cover its position. This encourages some level of pre-hedging, which carries its own price risks.
The second problem is a lack of liquidity and uniformity in pricing. Big platforms have a lot bitcoin to hedge. This sees a lot of them scoping out the OTC markets, which — ironically for such a digitally-focused frontier — are serviced by old fashioned voice-brokers who introduce expenses of their own. Live balances have to be held on exchanges, and yet many of these venues are unregulated, opaque and have little to no track record coping with crises.
This can be managed for to a certain degree by spreading positions around. Some responsible platforms tell us they will work with up to 10 exchanges. But the more exchanges a platform has to deal with the greater the admin costs, the due diligence work and the risk management costs. Margin trading is mostly not a thing, so hedges have to be fully funded.
Instead they run business models that more closely resemble those of casinos, making money either on the spreads they charge, the overnight funding rates applied or, more commonly still, from playing the odds that their clients are more often than not going to find themselves on the losing side of the trade. Since too many clients are winning while the house is losing — with no effective hedges in place — the costs have to be made up in other ways.
Hence on some platforms overnight financing rates are reaching Wonga-style rates of per cent a year or more. The hope no doubt was that a slew of new clients would come for the bitcoin but stay for the opportunity to punt in all sorts of other markets, where failure is a much more common thing. Punters have come for the bitcoin and stayed for the bitcoin.
If the futures are liquid to boot, it all becomes a bit of a no-brainer. But is it really as simple as all that? All the trade opportunities available in cryptoland are the product of a giant credit trade. Established CFD and spread-betting houses — while on the lower end of the financial legitimacy end — are still overseen by some sort of regulatory system which forces risk management and compliance upon them.
The key product they bring to the market, as a result, is reduced crypto trading credit risk. The problem is, providing such a service is not easy. Risk management bears cost. Futures might at first sight seem like a panacea to this problem, but chances are they will only push the credit risk onto somebody else.
Which brings us back to the intrinsic market structure problems at hand. Small surprise many of the established well supervised players — such as the big broker-dealers — are seemingly not prepared to take the risk on. One: the futures will flop. Two: the risk will be transferred elsewhere, most likely into the clearing houses that support the futures exchanges to the risk of the entire trading community.
Or three: a less established player with a lot more tolerance for risk — possibly a natural long — steps into the market comes into absorb the risk. When excessive digital luxury squeezes the world Which brings us back to the title of this post. A market with no intrinsic fundamentals has no ceiling on what the price can get to. How that realisation comes about nobody can be sure of at this point. Group Subscription. Premium digital access plus: Convenient access for groups of users Integration with third party platforms and CRM systems Usage based pricing and volume discounts for multiple users Subscription management tools and usage reporting SAML-based single sign on SSO Dedicated account and customer success teams.
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