Views from the Hehmeyer Trading Desk — Week of September 7, 2020
September Trends
Historically, September is a difficult trading month for Bitcoin - and 2020 appears to be no different for the asset as traders faced a bearish start for the month. For almost a week, Bitcoin stayed above the $10,000 support level after a fall from $12,100, even though Wall Street gave back some of its profits on the year. There could be several factors leading to the decline of Bitcoin, including large position holders taking profits, miners selling off their stashes, and the Bithumb controversy — a South Korean exchange that was reportedly raided by police (more on that under Headlines).
Even though Bitcoin has struggled so far during the month of September, the correlation between gold and Bitcoin remains at a record high. The positive correlation continues to validate the idea that both serve the same purpose as stores of value, and crypto sensitivity to movements in risk assets could lessen. Does that mean Bitcoin is an alternative inflation hedge to gold? Public companies and institutional investors have purchased Bitcoin in the billions increasing Bitcoin’s potential hedge against inflation.
Key Crypto Headlines
Bitcoins Correlation with Gold Hits Record High
“Bitcoin is now more closely tied to safe haven gold than ever, possibly bringing the cryptocurrency greater resilience to risk aversion in the traditional markets.”
Ether Traders May Be Hedging Against DeFi Slowdown: Analyst
“Options market data shows increased activity in ether (ETH) puts, or bearish bets. According to one trader, that reflects fears of a drop in prices led by a slump in decentralized finance (DeFi).”
Mastercard Launches Customizable CBDC Testing Platform
“Mastercard has launched a “virtual and custom” testing platform that will allow central banks to evaluate digital currency systems.”
Digital Asset Prices Have Cooled Off, but DeFi projects Continue to Attract Venture Capitalists
“The month of August saw a total of 11 DeFi-related investment deals, an 83% increase month-over-month. In total, $54 million was raised, with the average deal size being approximately $5 million and a median deal size of roughly $3 million. In a span of four days (Aug. 25 — Aug. 28), there were seven deals that raised $24.75 million in aggregate, nearly half of the total funding for the month.”
New Swiss Laws Provide Solid Ground for Blockchain and Crypto
“Swiss parliamentarians on Thursday passed a new set of finance and corporate law amendments that recognize the blockchain and cryptocurrency industry. As per a Swiss info report, the government has amended several laws ranging from company bankruptcy to securities trading.”
South Korean Police Reportedly Raid Bithumb for Second Time
“Bithumb, the largest cryptocurrency exchange in South Korea, is reportedly facing more police raids in Seoul.”
Hehmeyer Happenings
Hehmeyer CEO Chris Hehmeyer was featured on The Scoop podcast, presented by Bitstamp. Chris sat down “virtually” with host Frank Chaparro to discuss all things crypto: where Chris sees growth happening in the crypto derivatives market, what the current DeFi “euphoria” could indicate going forward, why Hehmeyer is going all in on crypto, and more. We recommend giving it a listen.
Partner and Managing Director David Nuelle will appear on a panel at today’s event “Deconstructing Derivatives,” presented by London Blockchain Labs, Outlier Ventures, and Vega. Virtually join “Derivatives Unchained — Looking to the Future” this afternoon at 2 PM CDT to hear David’s perspective on what is next for derivative products.
The Trading Show is quickly approaching, taking place virtually September 15–17. A few members of the Hehmeyer team will be featured on select panels listed below.
- Chris Hehmeyer: Keynote Panel, Future of Trading Technology — how will innovation disrupt trading processes as we know it? September 15, 10:00 AM
- Mike Ossowski: Liquidity in Crypto — adding stability to a young and fast-growing market. September 15, 1:40 PM
- David Nuelle: Digital Transformations — how will the future of capital markets be influenced by blockchain technology? September 16, 2:50 PM
