Spot Bitcoin ETF options debut

November 19, 2024

Reading time: 5 minutes

Crypto breakthrough: Spot Bitcoin ETF options to start trading

Key points:

  • The U.S. is set to launch its first spot Bitcoin ETF options, with trading expected to begin on November 19.

  • This development is anticipated to significantly enhance market liquidity and attract a new wave of institutional and retail investors.

News - The imminent introduction of spot Bitcoin exchange-traded fund (ETF) options in the U.S. marks a pivotal moment in the evolution of cryptocurrency markets. Scheduled to commence trading on November 19, 2024, these financial derivatives will provide investors with the right, but not the obligation, to buy or sell shares of spot Bitcoin ETFs at predetermined prices. This move is expected to bolster liquidity, facilitate price discovery, and offer robust risk management tools, particularly appealing to institutional investors who play a central role in market dynamics.

Why it matters - The launch of spot Bitcoin ETF options is poised to transform the cryptocurrency landscape by introducing a regulated avenue for derivatives trading. Historically, Bitcoin derivatives have been underdeveloped, limiting the market's maturity and deterring institutional participation. With the U.S. equity markets accounting for 44% of the global equity market, the introduction of these options is expected to unlock unprecedented liquidity and depth, enabling a broader spectrum of investors to engage with Bitcoin in a regulated environment.

Implications for the market - The advent of spot Bitcoin ETF options is likely to attract significant institutional capital, fostering greater market stability and maturity. As derivatives markets expand, Bitcoin is expected to follow the trajectory of traditional equities and commodities, where derivatives trading volumes often surpass those of the underlying assets.

This development could lead to trillions of dollars in potential trading volume, enhancing price discovery mechanisms and providing investors with sophisticated tools for hedging and speculation. Moreover, the inclusion of retail investors in the derivatives market is anticipated to diversify the investor base, further contributing to the robustness and resilience of the cryptocurrency ecosystem.

DOGE rockets back to $0.40 amid crypto market frenzy

Key points:

  • Dogecoin has surged 11% over the past day, reclaiming $0.40 after a quieter period.

  • It has nearly tripled in price over the last 30 days, up by 188%. Moreover, Bitcoin continues its climb toward a new record, reaching $92,720.

News - Dogecoin (DOGE), the original meme cryptocurrency, is back in the spotlight after surging 11% over the past 24 hours to hit $0.40, according to CoinGecko. This marks the first time DOGE has reached this price since November 14, following a few middling days after a post-election rally that pushed the coin to a three-year high of $0.43.

The broader crypto market swell, largely driven by Bitcoin’s climb toward new heights, has played a significant role in Dogecoin’s recent momentum. Bitcoin reached $92,720 on Tuesday morning, just shy of its all-time high of $93,477 set last week.

Why the surge? - DOGE’s rise is tied not just to the broader crypto market rally but also to renewed enthusiasm surrounding Elon Musk, a longtime Dogecoin supporter. On Tuesday, Musk posted a reference to himself as "The Dogefather," echoing the nickname he gave himself during DOGE’s meteoric rise in 2021.

Additionally, Musk has been named co-leader of the newly announced "Department of Government Efficiency" (DOGE) alongside entrepreneur Vivek Ramaswamy by President-elect Donald Trump. The playful acronym and Musk’s association have likely fueled speculative interest in the coin.

Implications for investors - Dogecoin’s recent performance highlights its continued ability to capture market attention, particularly during bullish crypto cycles. As Bitcoin edges closer to another record, it’s clear that DOGE remains a key player in the meme coin space, with its price action often tied to the broader sentiment around market leaders and high-profile supporters like Musk. However, as with all cryptocurrencies, investors should remain cautious about volatility, especially in meme-driven assets like Dogecoin.

MicroStrategy to raise $1.75B leveraging 0% notes for Bitcoin purchases

Key points:

  • MicroStrategy plans to issue $1.75 billion in senior convertible notes at a 0% interest rate.

  • Proceeds are intended for additional Bitcoin purchases and general corporate purposes.

News - MicroStrategy, the largest corporate holder of Bitcoin, announced plans to raise $1.75 billion through the issuance of senior convertible notes with a 0% interest rate. The company intends to use the net proceeds to acquire more Bitcoin and for general corporate purposes.

Understanding 0% convertible notes - These convertible notes are sold at a discount and mature to face value if not converted before the maturity date in 2029. Being "senior" to common stock means holders have priority in the event of bankruptcy or liquidation.

MicroStrategy's Bitcoin holdings - With this potential acquisition, MicroStrategy could purchase approximately 19,065 BTC at current prices. The company currently holds 331,200 BTC, valued over $30.3 billion, following a recent $4.6 billion purchase. This year alone, MicroStrategy has acquired 142,050 BTC, worth around $12.8 billion at current prices.

Market reaction - Following the announcement, MicroStrategy's shares increased nearly 13%, setting a new closing high of $374.80 on November 18, 2024.

Implications for the market - MicroStrategy's continued investment in Bitcoin through innovative financing strategies underscores its confidence in the cryptocurrency's long-term value. This move may influence other corporations to consider similar strategies, potentially impacting Bitcoin's market dynamics and institutional adoption.

California court holds DAO members accountable under partnership laws

Key points:

  • A U.S. federal judge has ruled that participants in Decentralized Autonomous Organizations (DAOs) can be held liable for the actions of the organization under state partnership laws.

  • The ruling specifically pertains to Lido DAO, with the court identifying certain members as partners, thereby making them accountable for the DAO's activities.

News - On November 18, Judge Vince Chhabria of the U.S. District Court for the Northern District of California determined that Lido DAO qualifies as a general partnership under California law. This classification implies that members of the DAO may be held liable for the organization's actions. The lawsuit originated from investor Andrew Samuels, who alleged that Lido DAO's tokens were unregistered securities, leading to his financial losses. He contended that Lido DAO should have registered these tokens with the U.S. Securities and Exchange Commission.

Implications for DAO members - The court's decision underscores the potential legal risks for DAO participants. By classifying Lido DAO as a general partnership, the ruling suggests that members could be personally liable for the organization's actions, even if they are not directly involved in decision-making processes. This development may prompt DAO members to reassess their roles and the legal structures of their organizations to mitigate potential liabilities.

Impact on decentralized governance - This ruling represents a significant moment for decentralized governance models. It challenges the notion that DAOs, due to their decentralized nature, can operate outside traditional legal frameworks. Legal experts and industry participants may need to explore new strategies to ensure compliance and protect members from unforeseen liabilities.

The California court's decision to hold DAO members liable under partnership laws marks a pivotal development in the legal landscape of decentralized organizations. As DAOs continue to evolve, this ruling may influence how they structure their operations and engage with regulatory frameworks to safeguard their members.

Interesting facts

  • The world’s first blockchain-based domain name system (DNS) was created by Namecoin in 2011. It allows decentralized registration of domain names, making them censorship-resistant and secure from traditional DNS attacks like DDoS.

  • In 2019, a Bitcoin transaction of just 0.00000001 BTC (one hundred millionth of a Bitcoin) cost a fee of about 1,000 times the value of the transaction itself, demonstrating the volatility of transaction fees on the Bitcoin network during congestion periods.

  • The concept of "proof-of-stake" was first introduced by Sunny King and Scott Nadal in 2012 with the launch of Peercoin, a blockchain that uses energy-efficient proof-of-stake alongside traditional proof-of-work mechanisms to ensure network security.

Top 3 coins of the day

Hedera (HBAR)

Key points:

  • At press time, HBAR was trading at $0.14.

  • It was down by about 2.50% over the last 24 hours.

What you should know:

The daily chart showed HBAR recently breaking above its upper Bollinger Band, signaling strong bullish momentum. However, this breakout indicates potential overextension, as prices often retrace toward the middle band (20-day SMA) after sharp rallies. The Stochastic RSI was at 97.31 and 98.97, firmly in the overbought zone, suggesting that a pullback or consolidation could be imminent. Volume spiked significantly during the recent rally, confirming strong buyer interest. However, the current red candlestick and slightly reduced volume hint at profit-taking or fading momentum. Immediate resistance lies at $0.15, while the middle Bollinger Band around $0.10 may act as a key support level if a correction occurs. While the trend remains bullish, caution is advised due to overbought conditions.

Kaspa (KAS)

Key points:

  • At press time, KAS was trading at $0.17.

  • It was up by about 3.29% over the last 24 hours.

What you should know:

KAS was seen continuing its upward momentum on the daily timeframe, trading above the 9-day Simple Moving Average (SMA). This indicates sustained bullish sentiment in the short term. The SMA currently acts as dynamic support, helping to maintain the upward trajectory. The Chaikin Money Flow (CMF) at 0.16 reflects strong capital inflows and sustained buying pressure. A positive CMF value typically suggests accumulation by buyers, which aligns with the recent price gains. Volume has remained steady and slightly increased during the rally, confirming consistent interest from buyers. The next resistance level to watch is around $0.18, while support is seen at the 9-day SMA near $0.15. As long as KAS holds above the SMA and CMF remains positive, the bullish trend could persist. However, a break below the SMA could lead to a deeper correction.

Polygon Ecosystem Token (POL)

Key points:

  • At press time, POL was trading at $0.44.

  • It was down by about 2.67% over the last 24 hours.

What you should know:

On the daily chart, POL experienced a retracement after a strong rally in the past few days. The Parabolic SAR dots have been positioned below the price, indicating that the overall trend remains bullish despite the recent pullback. However, caution is warranted as the retracement could test lower levels of support. The RSI at 61.69 reflects healthy momentum in the bullish zone but still shy of the overbought territory. This indicates room for further upward movement if buying interest resumes. During the recent rally, trading activity saw a noticeable uptick, highlighting strong buying interest in the market. However, the emergence of a red candlestick alongside marginally lower trading volume could point to profit-taking or a weakening of bullish momentum. The next key resistance level to watch is around $0.46, while support near $0.38 could provide a safety net, aligning with prior price consolidation zones.

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