- Bitcoin daily high at USD 9,875
- Celsius Network breaks USD 1 billion in crypto deposits
- CME Bitcoin futures record fast growth this quarter
Bitcoin prices are still hovering in the same range, with a higher daily high of USD 9,875 (CoinDesk) so far, suggesting that another weekend piercing of the USD 10,000 barrier could be on the cards. Traders will be wondering if this is deja vu, since last weekend we saw a huge breakout, only for the past week to take down the price brutally to even USD 9,000 before the slow ascent began.
In any case, we now turn our attentions to decentralized finance (DeFi), with one of the largest such platforms for lending and borrowing has seen a record of USD 1 billion in total crypto deposits since it first appeared in 2018. Celsius Network claims to have returned some 80% of its total revenue to all users, paying out the crypto community some USD 17 million in interest payments, of which USD 12 million was in Bitcoin, and USD 3 million was in its native CEL token.
This is good news for many in the blockchain industry, who will see this as a sign of strength even despite the huge economic repercussions of this year as a result of stagnating growth and a pandemic lockdown still in effect. Earlier in March, Celsius CEO Alex Mashinsky said that theirs had been the first platform of its kind to finally turn a profit, as others like Maker DAO experienced huge losses when Black Thursday liquidated hundreds of users’ deposits.
Celsius also revealed last month that it had expanded its userbase by supporting tokenized gold, with other commodities to also be tokenized in the near future.
DeFi firms have been talking a lot about bringing financial and banking services to the unbanked, although this has yet to happen seriously. Celsius will look to address this and its CEO says they will provide the superior alternative through crypto. He explained that the Celsius app was designed in such a way that people would use it to bypass the “race, gender, credit score or job status” restrictions imposed on them by traditional finance:
“We look forward to the day when billions of people leave the antiquated traditional banks behind and choose to unbank with Celsius. We proved we can bring the power back to the people.”
Very big dreams from a DeFi platform but let’s give them the chance to make it work!
Meanwhile, blockchain data analysts Skew has put out fresh data that shows that the interest in Bitcoin derivatives interest is growing quickly in this quarter, propelled by leader CME Group, which offers Bitcoin options. This is based on the fact that during the past weeks, the brokerage has increased its share of Bitcoin options open interest by a distance, dominating the derivatives market.
#bitcoin options open interest growing fast this quarter
Notice the yellow part starting to emerge! pic.twitter.com/FTQWdRFEcy
— skew (@skewdotcom) June 5, 2020
Open interest is the total volume of derivative contracts yet to be settled. An all-time high was already set in May but that mark has been growing quickly. As of today, there is a total of USD 256 million in open interest, only USD 3 million short of the record. This compared to only USD 2 million in open interest at the start of the year. Skew summarized: “Bitcoin options open interest growing fast this quarter.”
When looking at it on wider timframes, Bitcoin markets continue to be dominated by exchange-based futures operators such as Deribit, OKEx, and LedgerX. Others who have been hyped like Bakkt, which is physically settled Bitcoin futures and not an exchange, has almost negligible figures when compared to CME, with just USD 69,000 in open interest.
Coin Metrics had earlier said that overall Bitcoin trading volume was mainly pushed up by derivatives markets. It said:
“Similar to other asset classes, derivatives markets in Bitcoin are several times larger compared to spot markets. If reported volumes are to be believed, gaining exposure through derivatives markets may be the most efficient path.”
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