Crypto Exchange Launches ‘Shitcoin Futures Index,’ Offering New Way To Short Alts (#GotBitcoin?)
Crypto derivatives platform FTX has perhaps the most speculative and oddly-named futures index fund on the market: SHIT-PERP, or the Shitcoin Index Perpetual Futures. Crypto Exchange Launches ‘Shitcoin Futures Index,’ Offering New Way to Short Alts (#GotBitcoin?)
An index of 58 low market cap coins, SHIT-PERP includes projects like Waves, Grin, and Nano. It is flanked by two other low-cap indexes on the site, MID-PERP and ALT-PERP.
Following an incubation program under Alameda Research, the derivatives platform opened this past spring. FTX runs an over-the-counter desk, futures, indexes, and now spot trading. Based out of the Antigua and Barbuda, the platform is slowly adding spot and margin trading.
FTX’s connection to Alameda Research gives it deep liquidity, per FTX statements. Founded in October 2017, Alameda manages over $100 million in digital assets, trading between $600 million and $1.5 billion per day. The quantitative trading firm operates the second-best performing account on BitMEX and helped onboard staff from Jane Street, Optiver, Susquehanna, Facebook, and Google to FTX, according to FTX.
Regardless of the index’s name, FTX stands by its product which it launched in June. Speaking to CoinDesk, FTX Chief Marking Office Darren Wong said the index allows traders and investors to interact with coins in an innovative way. Wong listed three examples:
If you want exposure to a particular initial coin offering, but not the general industry, you can short SHIT-PERP. By shorting the greater alt market, you hedge your bets and limit your downside.
If you want to short low market cap altcoins in general, you can use SHIT-PERP. The indexed future is one of few ways to short low cap alt markets.
If you think bitcoin’s dominance is too high, you can buy all three of FTX’s altcoin futures indexes and sell BTC-PERP, the platforms Bitcoin futures index.
Surprisingly, Wong says the exchange trades a roughly on par with its other futures index, ALT-PERP, at roughly a few million dollars turnover. At the time of writing, the index was down 2.62%.
Nasdaq Lists New Decentralized Finance Index Including MakerDao, 0x, Augur
Nasdaq has added a new index that aims to offer the markets information on blockchain projects working in the decentralized finance (DeFi) space.
Called Defix, the index was launched by the London-based Exante brokerage – an early mover in the crypto industry that launched a bitcoin fund in 2012. Offered as a means for investors and traders to track “popular” defi-focused blockchain tokens, Defix lists projects including MakerDao, Augur, Gnosis, Numerai, 0x and Amoveo.
The index is listed by NASDAQ under the ticker DEFX, and can also be tracked on TradingView and Google, with a listing on Yahoo Finance planned in the future.
The news marks the latest index to be added by Nasdaq to inform its users. This year so far, the U.S. stock exchange has added dedicated indices for bitcoin, ether and XRP, as well as a wider crypto reference index from CryptoCompare.
This autumn, Exante is also to launch a fund based on the Defix index, saying it will be offered through a “secure, financially accredited agency.”
Tagomi Rollout Paves Way For Institutional Crypto Shorting
Crypto brokerage Tagomi released its borrowing and lending platform to the wider public, enabling investors to short cryptocurrencies like bitcoin and ethereum.
Tagomi’s COO Kevin Johnson told CoinDesk that its new platform addresses issues that stymie institutional crypto shorts.
Many large-scale investors could not short cryptocurrencies as rapidly as they might short an equity position because the existing borrowing process for crypto is too complex, Johnson said: “It’s multiple steps, it’s a lot of work.”
“First, you have to either find an exchange that’s able to lend, or talk to one of the centralized lending counterparties, negotiate rates, settle that, borrow, and then you could get to be in the process of actually selling the coin short.”
Johnson said this has been the biggest barrier for institutional investors.
CEO Marc Bharvaga said the service brings Tagomi closer to becoming a full-suite prime brokerage, which is how institutional investors prefer to manage their trading.
“Having a full prime brokerage functionality, which we now have through being able to do best execution, being able to custody, being able to lend, being able to short and there’s quite a few other things on the road map as we think about the [crypto] space,” Bharvaga said.
Tagomi completed a $12 million funding round in March, when co-founder Jennifer Campbell told CoinDesk then that it would expand its services to include lending and shorting.
Bitcoin Owners Are Giving Away Shitcoins To Support TOR Project
On the lighter side of things in the cryptosphere, some Bitcoin (BTC) owners have been donating altcoins to the TOR Project — a nonprofit organization primarily responsible for running “The Onion Router.”
For some Bitcoiners, the trend is a way of killing two birds with one stone — supporting the TOR Project and getting rid of “shitcoins.” As for the latter half of the equation, Bitcoiners appear keen to extend the running gag of altcoins being worthless.
“Donate Shitcoins, Stack Sats”
Earlier in September, Bitcoin maximalist and co-host of the “Tales from the Crypt” podcast Matt Odell posted a tweet urging people to support the TOR Project by way of donation. In a cheeky addendum, Odell added, “donate shitcoins. stack sats.”
Sarah Stevenson, fundraising director at the TOR Project, initially thought the donations were coming from members of the Stellar community, likely because of the influx of XLM tokens.
Bitcoiners swiftly corrected her conclusion, seemingly opposed to letting their attempted ribbing go unnoticed. They soon piled onto the thread, dropping Twitter soundbites like the “perfect
destination for my airdropped shitcoins” and “sounds like a good place to dump my shitcoins.”
Some of the donations reportedly came from recipients of the Keybase XLM airdrop. As previously reported by Cointelegraph, encrypted messaging platform Keybase partnered with the Stellar Development Foundation to launch a $120 million airdrop.
The Bitcoiners did, however, advise Stevenson and the team to quickly convert the donations into fiat. Data from CoinMarketCap shows a 45% decline in the XLM price since the start of the year. Stellar tokens are also down more than 93% from their all-time high of $0.8755 in 2018.
On Wednesday, the XLM spot price saw a 52% rise in a little under two hours, leading to speculation about the arrival of another altseason. The upward surge was followed by a steep retrace, reducing the initial 24-hour trading gains by more than half.
For Stevenson, the TOR Project appreciates the donations regardless of the subtext. In a private correspondence with Cointelegraph, the TOR Project’s fundraising director offered her thoughts on the matter, stating:
“I am generally a peace, not war kind of person but I welcome any activity that draws attention to the importance of financially supporting the Tor Project. Everyone benefits from the privacy and anonymity technologies we develop and maintain. As for the tangible value proposition for altcoins, I’ll plead the fifth because I prefer to be friends with everyone.”
At the time of publication, the TOR Project has received more than 21,300 XLM tokens, valued at over $1,200.
The crypto-Philanthropy Angle
Apart from the TOR Project, other nonprofit organizations are also asking holders of spare altcoins to consider donating in support of worthy causes around the world. Via its Twitter account, Bitcoin Venezuela called on people to send their unwanted XLM to support its Bitcoin for Venezuela Initiative.
According to another Twitter account, “The Giving Block,” there are other nonprofit organizations that accept XLM donations. Recently, cryptocurrency has seemingly taken on increased prominence in philanthropic work across the globe.
As previously reported by Cointelegraph, Fidelity Charitable — an independent public charity organization — has received more than $100 million in cryptocurrency donations since 2015.
Global aid organizations such as the United Nations International Children’s Emergency Fund — or UNICEF — have encouraged PC gamers in the past to mine cryptocurrencies with their computers and donate the earnings to support humanitarian aid efforts for children in Syria. There is also the Pineapple Fund from 2018, which donated more than $55 million in Bitcoin to numerous nonprofit organizations around the world.
Apart from using cryptocurrencies as an avenue for donating to charities, there is also talk of leveraging blockchain technology to improve the transparency of these organizations. An excerpt from Binance Academy’s post on the benefits of adopting crypto-philanthropy reads:
“Each cryptocurrency transaction is unique, which means that it is also easily tracked through the blockchain. The higher level of transparency and public accountability can ease donors’ minds and encourage them to give while also reinforcing the charity’s reputation for integrity. […] Funds can move directly from donors to charities, and the decentralized nature of blockchain makes it uniquely suitable for international transactions.”
According to Ethereum co-founder Joseph Lubin, there are observable elements of tribalism within the crypto space. Mati Greenspan, senior market analyst at eToro, quoted Lubin as saying:
“Ultimately we’re all on the same team. Yes, there’s a lot of tribalism but we’re all working towards similar goals.”
Lubin’s comments came during a session at the Ethereal Summit in Tel Aviv on Sunday. On the panel with Lubin were fellow Ethereum co-founder Vitalik Buterin and eToro CEO Yoni Assia.
The struggle for relevance among the major cryptocurrency projects formed a large part of the discussions at the event. The debate over whether any altcoin project can challenge Bitcoin’s dominance is one that often seems to draw myriad opinions.
As with any debate among groups holding strong opinions, the emergence of category-specific rhetoric — or, as Lubin puts it, “tribalism” — is likely. There are the Bitcoin maximalists whose position is that “Bitcoin is king” and all other altcoins are “shitcoins.”
To be fair, such a position might not seem extreme considering the many instances of exit scams among altcoin projects coupled with the poor price performance of the altcoin market.
This seemingly never-ending decline in altcoin prices becomes even more apparent when considered alongside Bitcoin. Bitcoiner and self-professed “toxic maximalist” Udi Wertheimer recently called out the leaders of altcoin projects like Bancor (BNT), writing:
“Shitcoin founders […] deserve all the fiery hate they receive from the community, and more. When you choose to sell your reputation for tens of millions, you don’t get to keep your reputation. Reputation can’t be double spent… not at scale.”
Another brand of Bitcoin maximalism, while agreeing that “Bitcoin is king,” says there is no harm in catching the frequent bounces in the altcoin scene and making money. Posting on Twitter earlier in September 2019, crypto analyst Josh Rager wrote:
“Bitcoin is king, I’m still Bitcoin maximalist, I like to make money though so I’ll invest in any tech that likely presents to give a solid ROI.”
If commentators like Matt Hougan of Bitwise Asset Management are correct, then 95% of all altcoins will die. Probable mass altcoin extinction aside, donating cryptos to charities while they still hold significant U.S. dollar value doesn’t seem like a bad idea.
Speaking Of Shitcoins….
Wells Fargo’s Stablecoin ‘Faster, Cheaper’ Than SWIFT, Says Exec
Banking giant Wells Fargo says its blockchain for internal cross-border money transfers is faster and more efficient than SWIFT, the global messaging system used by over 11,000 financial institutions.
Unveiled this week, Wells Fargo Digital Cash uses R3’s Corda Enterprise software to handle internal book transfers, when funds move from a payer’s account to a payee’s account at the same bank.
“When we move money across the world and we need to exchange currencies, we have to go through third parties such as SWIFT and other banks,” said Lisa Frazier, head of the Innovation Group at Wells Fargo. “That’s a long process and every time there’s a connection with external parties, it takes time and energy and effort.”
Using the digital cash would allow the bank to move funds 20 hours a day, up from only six to nine hours, five days a week when it relies on wire transfers and systems like SWIFT, Frazier said.
She Told CoinDesk:
“It’s faster than SWIFT, cheaper and definitely more efficient.”
Today, for internal book transfers between branches in different countries, the bank needs to use SWIFT. This is not the case for domestic internal book transfers.
The blockchain project, which will go into a pilot phase next year after a successful proof-of-concept, “will allow those locations to exchange digital cash among themselves,” Frazier said.
As with rival megabank JPMorgan’s JPM Coin, Wells Fargo’s digital cash will be backed 1-for-1 with the analog kind. “We will hold the fiat currency, so it’s a stablecoin, and we will issue digital cash tokens. These tokens are placed into digital wallets and then those tokens are able to be exchanged,” Frazier said.
Frazier said Wells Fargo has been avidly participating since 2016 in blockchain tests that she described as “external,” meaning other banks and financial institutions were involved. However, the bank has also been busy pursuing internal use cases for distributed ledger technology (DLT), she said.
“I think the surprise is, we have found a really solid internal application for DLT on our book transfers. By doing this we are streamlining the book transfer process and are reducing the use of intermediaries that can cause a delay in settlement. Therefore we are widening the operating window for clearing of FX wires cross-border,” she said.
The stablecoin project also happens to be the first project the bank has built using the paid-for version of R3’s DLT, which Wells Fargo has now licensed — with more to follow on the platform, the bank added.
SWIFT declined to comment, but the messaging system itself is collaborating with R3 on a number of projects, such as a proof of concept to connect the former’s gpi to the latter’s Corda to enable “off-ledger” payment settlement. The results of this PoC will be revealed at Sibos 2019. Corda Settler, the Corda Network’s open-source payments engine, has also been tested with the cryptocurrency XRP.
However, Wells Fargo scotched any suggestion the bank would be connecting its digital coins to anything outside its own internal payments systems.
“R3’s Corda Enterprise was selected as the platform for our first enterprise DLT network, not CordaSettler,” said a spokesman for the bank. “Wells Fargo Digital Cash is an internal settlement service which will not be associated or connected to any other potential digital cash solutions emerging in the financial services markets today.”
Alex Lipton, a former bank executive, trader and quant, said Wells Fargo’s coin is potentially very useful for simplifying the “bank’s byzantine internal processes,” but not something that will see much usage outside the bank and a handful of close partners.
“Large banks are so bad that they have to use SWIFT like everyone else, so in effect, they don’t differentiate between inside and outside of banks. So, a coin can help. But it is a sign of desperation,” said Lipton, now co-founder and chief technical officer at fintech firm Sila.
Another JPM Coin?
At first blush, Well Fargo’s digital cash may appear to be another JPM Coin, the much-vaunted technology built using Quorum, the privacy-centric version of ethereum developed by JPMorgan.
Although initially intended for payments between clients, the coin will eventually be used to digitally fund enterprise blockchain projects such as on-chain debt issuances, JPMorgan executives have said.
JPM also boasts 344 banks on its Interbank Information Network (IIN), which uses Quorum to eradicate pain points in the way information circulates within foreign correspondent banking.
Frazier played down any similarities between JPM Coin and Wells Fargo Digital Cash. “I think they are very different,” she said.
Wells Fargo is not a member of IIN, but Frazier hinted at a long-term plan for interoperability.
“Eventually in the future, there will be interoperable networks. As these emerging technologies come out of a nascent stage all kinds of things can happen.”
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