Bitcoin was in the depths of the bear market by the end of 2018, it dipped by 84% since its all-time high in 2017. The price of Bitcoin reached $3,122 in December 2018. Most people in the traditional market said that Bitcoin would go to zero; however, the price of Bitcoin has since surged by 191% as of May 27, 2019.
This rise in Bitcoin’s price is not surprising to people who have been through the bull market of 2017, but for the people in the traditional markets like Gold, Bonds, etc, Bitcoin’s parabolic rise seems like a meteoric surge. Many people argue that Bitcoin is not safe, but none of them bet against it, for the simple fact that Bitcoin outperforms almost every traditional asset out there.
Morgan Creek Digital’s Mark Yusko and Anthony Pompliano put a $1 million bet out in the open that Bitcoin will outperform the S&P in the next 10 years. There were no takers for this bet, which is more than enough proof that nobody is willing to bet against Bitcoin’s performance.
Over the course of 2019, Bitcoin’s price has reached a peak of 191.35% and at press time, was up by 153%, which when compared to other traditional assets is massive.
Charlie Bilello tweeted a comparison of the performance/returns of traditional assets and Bitcoin.
Bitcoin $BTC: +111%
REITs $VNQ: +20%
Nasdaq 100 $QQQ: +18%
Oil $USO: +16%
S&P 500 $SPY: +16%
Small Caps $IWM: +13%
EAFE $EFA: +12%
Investment Grade $LQD: +9%
High Yield $HYG: +9%
EM $EEM: +5%
Bonds $AGG: +5%
Commodities $DBC: +5%
Gold $GLD: +4%
Cash $BIL: +1%
— Charlie Bilello (@charliebilello) June 8, 2019
The returns for S&P500 is only 16% while as seen above, Bitcoin’s returns for 2019 is more than 100%. The emerging markets, which are said to track similar movements as Bitcoin are up by only 5%, the same can be seen with Bonds, Commodities and Gold stands at 4%.
A Twitter user @talgya, commented:
“Is listing these assets in this manner implying that they are all accessible via a regulated exchange for institutional/retail investors? If yes should $BTC be listed as $GBTC, if not should these be listed as tickers?”
Another Twitter user @edtechx, commented:
“I like these Tweets, would be amazing to thread them with additional Tweets (say) same tickers but 2yr/3yr returns as this gives much more context to the 2019 numbers.”
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ErisX goes all hands on deck to launch a Bitcoin Futures market
ErisX’s CSO, Matt Trudeau, detailed the company’s four important plans for the future, which includes launching a spot market, to secure a Bit License, DCO, and to launch a futures market.
ErisX currently has a DCM contract, which is a Derivative Contract Market that allows ErisX to run a CFTC-regulated futures exchange. However, ErisX aims to get a DCO [Derivatives Organization], which will effectively allow it to run a CFTC-regulated clearinghouse. A clearinghouse would mean that ErisX can take control of the custody of the assets and clear and settled trades.
The CSO explained the benefit of this, stating,
“There is some efficiency for firms like producers [like mining companies]; if they need to hedge their inventory or need liquidity on a spot market, they could do that conveniently on a single platform. “
Trudeau added that from the “post-trade standpoint” and “the collateral management standpoint,” ErisX would have cash, crypto, and the futures, all stored in their clearinghouse. This would boost efficiency since it would be available for all customers under a single platform. The CSO added,
“… so there is some efficiency in terms of managing collateral, if you don’t have assets on multiple platforms, it can all be in our clearinghouse.”
Apart from the aforementioned plans, Trudeau added that the crypto-industry needs to mature more and that ErisX plans to make a significant contribution to that. He added,
“The market is professionalizing and we think that in terms of what institutions are expecting from a trading/custody experience, we will bring some of the solutions to the market and that’s really the foundational pieces that they are looking in order to build their businesses on top of us.”
Apart from ErisX, LedgerX has also received a go-sign from the CFTC to settle Bitcoin Futures in Bitcoins. Other exchanges include Intercontinental Exchange’s Bakkt and Seed CX.
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