CFTC chairman, Heath Tarbert said on October 21 at the DC Fintech Week that Ether futures contracts are likely to be seen at some point during 2020, possibly within the next six to twelve months. He did note, however, that no company has made any move to signal that they would be launching such a product.
Though he was unsure about the volumes it would likely trade in, he said,
“I’d say it is likely that you would see a futures contrast in the next six months to a year. Now that we’ve provided at least a little bit more clarity on Ether’s eligibility for futures contracts, my guess is market participants will consider that.”
Earlier this month, Tarbert had said that he considered Ether to be a commodity, similar to Bitcoin. When asked how the new contract would come into being, he said,
“It’ll depend on who wants to have it on their trading platform. Is it one of our existing exchanges that’s been working with the CFTC for years or is it an entirely new platform that wants to specialize in it?”
On the topic of pricing Ether futures, CFTC chairman added that traders should be reassured using a CFTC-regulated exchange, indicating that there is no market manipulation and that the markets have been ensuring there is public price transparency for the last 150 years.
When asked about other cryptocurrencies that could be potentially added to the list, Tarbert said that it’s likely more will be seen, but he couldn’t confirm that it would be arriving soon. The CFTC chairman further confirmed that an asset can evolve from a security to a commodity, and vice-versa, though he mentioned that this has not occurred before, to his knowledge.
“Even the two that we thought about – bitcoin and ether – took us quite some time to work through.”
Ethereum Price Analysis: ETH Trading Above Key Supports
- Ethereum price is struggling to surpass the $192 and $194 resistance levels against the US Dollar.
- ETH price is somehow holding the key $182 and $180 support levels.
- There is a major bullish trend line forming with support near the $184 level on the 4-hours chart (data feed from Coinbase).
- The price could start a sharp decline if it fails to stay above the $182 and $180 support levels.
Ethereum price is showing a few bearish signs below $192 against the US Dollar. However, ETH price is still trading above the main $180 support area.
Ethereum Price Analysis
Recently, Ethereum price made another attempt to surpass the $192 and $194 resistance levels against the US Dollar. The bulls struggled to gain strength and ETH price formed a high near the $192 level.
Later, there was a bearish wave below the $190 and $188 levels. Moreover, there was a break below $185 and the 55 simple moving average (4-hours). Similarly, there were strong bearish moves in bitcoin, but ETH remained supported above the $182 level.
A low was formed near $183.78 and the price is currently correcting higher. An immediate resistance is near the $186 level. It coincides with the 23.6% Fib retracement level of the recent decline from the $192 high to $183 low.
The first key resistance seems to be near the $188 level. It represents the 50% Fib retracement level of the recent decline from the $192 high to $183 low. Besides, the main resistance for Ethereum price is still near the $192 and $194 levels.
Therefore, a successful close above $194 is needed for a strong upward move towards the $200 and $210 levels. On the downside, there are many supports near the $182 and $180 levels.
More importantly, there is a major bullish trend line forming with support near the $184 level on the 4-hours chart. If ETH fails to stay above the trend line, the next key support is near $180. Any further losses may perhaps start a major decline towards the $175 and $170 levels.
Looking at the chart, Ethereum price is clearly trading above key supports near $182 despite the recent decline. If the price fails to stay above $182 and $180, there could be a sharp decline. Conversely, a clear break above $194 could start a strong increase in the coming days. The next resistances are near $200 and $208.
4 hours MACD – The MACD for ETH/USD is slowly moving in the bullish zone.
4 hours RSI (Relative Strength Index) – The RSI for ETH/USD is currently rising towards the 50 level.
Key Support Levels – $184, followed by the $180 zone.
Key Resistance Levels – $188 and $192.
Tether Says Its Stablecoin Is ‘Fully Backed’ Again
USDT tokens are now fully backed by Tether’s reserves, the stablecoin issuer said Thursday.
Tether published a response to what it described as “a flawed paper” written by John Griffin, a professor of finance at the University of Texas at Austin, and Amin Shams, an instructor the Ohio State University which claimed a single address on the Bitfinex exchange was responsible for manipulating the bitcoin market in late 2017, sparking the bull market. The paper was an update to a version first published in the summer of 2018.
Tether pushed back on this claim, saying in Thursday’s statement that “the revised paper is a watered-down and embarrassing walk-back” of the first version.
Perhaps more intriguing, however, was the claim that “All Tether tokens are fully backed by reserves.”
Whether or not USDT is fully-backed has long been a point of contention. The company has promised an audit of its stablecoin reserves (though it has not delivered one, and has since dissolved its relationship with its auditor), produced a third-party report saying it likely had more funds than outstanding tokens, and had a bank write a letter vouching for its holdings. (The latter two reports both acted as snapshots, only assuring the crypto community that on specific days, Tether’s obligations did not exceed its assets.)
Tether’s backing is even the subject of an inquiry by the New York State Attorney General’s office.
Nevertheless, Tether maintained that its tokens were fully backed until April 2019, when general counsel Stuart Hoegner wrote in an affidavit that USDT was backed by “cash and cash equivalents … representing approximately 74 percent of the current outstanding tethers.”
At the time, Tether held $2.1 billion in assets, with 2.8 billion USDT tokens issued on the Omni blockchain. According to a block explorer, this number has fallen since then to 1.775 billion. However, a further 2 billion USDT is in circulation as an ERC-20 token.
Tether’s “Transparency” page says the company currently holds more than $4.6 billion in total assets, including $4.56 billion in U.S. dollars, $44 million in euros and $3.3 million in Chinese renminbi (amounts are converted).
In an email to CoinDesk, Hoegner said the outstanding tokens are currently backed by reserves, adding:
“According to the website and our terms of service, our reserves include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties. The 74% figure refers to particular assets at that point in time, not the aggregate reserves.”
He declined to detail the breakdown between Tether’s actual cash holdings and the cash equivalents, saying “we generally do not share the asset mix.”
‘Lack of understanding’
As for the actual paper that Griffin and Shams hope to see published in the Journal of Finance, Tether’s statement Thursday said “the authors demonstrate a fundamental lack of understanding of the cryptocurrency marketplace and the demand that drives Tether token purchases.”
The paper itself said its analysis “for the single largest player on Bitfinex” found that “the 1 percent, 5 percent and 10 percent of hours with the highest lagged flow of Tether by this one player are associated with 55 percent, 67.2 percent and 79.2 percent of bitcoin’s price increase over our March 1, 2017 to March 31, 2018 sample period.”
The paper went on to say:
“This pattern is not present for the flows to any other Tether exchanges, and simulations show that these patterns are highly unlikely to be due to chance; this one large player or entity either exhibited clairvoyant market timing or exerted an extremely large price impact on Bitcoin that is not observed in the aggregate flows from other smaller traders.”
However, the paper suffers from having incomplete data, including insufficient data on capital flow or transaction timing, Tether said Thursday. As a result, the paper cannot “establish a valid sequence of events” for the claimed manipulation.
“Furthermore, the authors now admit that the patterns of trading they observed could be consistent with the market purchase of Tethers, as opposed to the issuance of unbacked Tethers. Importantly, the authors do not possess or reference any data disputing that Tether has sufficient reserves to back up Tether token issuances in circulation,” the statement said.
While the paper notes that “some in the blogosphere and press” have expressed doubts on whether Tether is fully backed, it adds that “the cryptocurrency exchanges largely reject such concerns.” However, it later says its model and results “are generally consistent with Tether being printed unbacked and pushed out onto the market.”
The paper has received skepticism and pushback from the crypto industry, with Tether skeptic Bennett Tomlin calling it “inconclusive.”
dYdX Protocol Registers All-Time High for Its ETH Lockup while DAI Lockup Amount Falls by 43%
Decentralized Finances (De-Fi) are one of the emerging use cases of blockchain technology which has registered significant market exposure in last year. De-Fi is an Ethereum based protocol that allows users to hold up their Ether using smart contracts and earn interest rates in the form of DAI, a decentralized stable coin that is not backed by any entity.
dydx protocol is a decentralized margin trading and derivatives platform that allows users to lock up their Ether in smart contracts and uses can earn interest on it or draw DAI based on the locked amount. As per a recent study conducted by DeFi Pulse, a Twitter handle which tracks the major happenings in the defi space reported that dydx protocol has registered a 16.6% increase in the amount of Either locked in the smart contracts pushing the total amount to an all-time high.
However, the analysis also showed that there has been a significant decline in the DAI holdings which dropped to 43% dropping from 3.4 million to 1.2 million in just 48 hours.
While Bitcoin cultivated the idea of decentralized currency and peer-to-peer financial networks, the management of transactions and all trading happens via centralized exchanges with tons of surveillance tools. All the exchanges are heavily centralized which has been the cause of many mishaps in the past, even the so-called decentralized exchanges have started to ask for KYC details under a government crackdown.
Thus, De-fi promise to create a truly decentralized and trustees network where human interference would be minimal and every aspect would be governed by pre-set protocols and codes.