Bitcoin’s Price is Up More Than $1K Since Bakkt Futures News

Put simply, BTC futures trading on Bakkt will not rely upon unregulated spot markets for settlement prices and the party will receive delivery of bitcoins from the Bakkt Digital Asset Warehouse at the end of the contract period.

Many observers, including cryptocurrency analyst and trader Scott Melker, are of the opinion that Bakkt’s physically-delivered futures product will open the floodgates for the institutional money and is a long-term bullish development for bitcoin.

Asian markets mixed after latest trade developments, China sets key rate lower

Hong Kong (CNN Business)Asian markets were mixed Tuesday as China took the next, critical step in a long-awaited money management reform, and as the United States gave the Chinese tech company Huawei a slight reprieve in Washington’s ongoing trade war with Beijing.

China’s Shanghai Composite Index (SHCOMP) edged up 0.2%, following a 2.1% gain the day before.

Hong Kong’s Hang Seng Index (HSI) slightly retreated in early trading, down 0.2%. The indexrallied 2.2% on Monday,its biggest daily gain in two months.

On Tuesday morning the People’s Bank of China set its new Loan Prime Rate at 4.25% — slightly lower than its existing benchmark one-year lending rate, which hasn’t changed in years. The LPR is a replacement that is meant to better reflect changes in market rates, and make it cheaper and easier for companies to borrow. Analysts have described the measure as effectively a rate cut.

The LPR will be set on the 20th of each month and serve as a new guidance rate for Chinese banks to price their loans to clients.

“While this should nudge banks to reduce lending rates slightly, the impact on economic activity will be marginal,” wrote analysts from Capital Economics in a research note Tuesday, adding that unlike a benchmark cut, “it will only feed through to borrowing costs on new loans, not outstanding ones.

“The upshot, they added, is that China’s central bank “still has work to do.

“Asian markets also had a chance to consider news from Washington on Monday that the US government would add more than 45 new businesses associated with Huawei to an export blacklist.

At the same time, the government said it was renewing a temporary license that allows companies in the United States to sell products to Huawei in some cases. The renewal lasts for 90 days and went into effect on Monday.

“While it is not unexpected, the extension for the easing of Huawei sanctions had added to the relief for markets at the start of the week,” wrote Jingyi Pan, a market strategist for IG Group, in a research note. She pointed out that US stocks in particular edged higher.

But Ken Cheung Kin Tai, chief foreign exchange strategist for Asia at Mizuho Bank in Hong Kong, said the extension on the reprieve signaled a “procrastination” of the US-China trade talks, rather than offering a resolution.

Japan’s Nikkei 225 (N225) rose 0.4%. South Korea’s Kospi (KOSPI) was up about 0.5%. Japan has approved shipments of a high-tech material to South Korea for the second time since imposing export restrictions last month, Reuters reported Tuesday.

Australia’s S&P/ASX 200 gained 0.8%, extending a 1% rise on Monday. The Australian central bank released on Tuesday the minutes of its policy meeting for August. It showed the policymakers believe it’s “reasonable” for interest rates to stay low for an extended period to support economic growth.



Stocks making the biggest moves midday: Micron Technology, Wynn Resorts, Estee Lauder & more

Check out the companies making headlines midday Monday:

Micron TechnologyAdvanced Micro DevicesOn Semiconductor — The semiconductor stocks rose after the U.S. granted Huawei another 90 days to buy from American suppliers. “We’re giving them a little more time to wean themselves off,” Commerce Secretary Wilbur Ross said. Micron and AMD gained 3.4% and 1%, respectively. Shares of On Semiconductor advanced 2.7%.

Chevron — Shares of the energy company rose 1.3% after an analyst at Barclays initiated them with an overweight rating. The analyst said Chevron is “well positioned” for a return of “significant” free cash flow to its shareholders.

Deckers Outdoor — Shares of Deckers gained 2.6% on Monday after the footwear company was upgraded to buy from hold by Pivotal Research Group. The analysts cited winter weather as a potential catalyst for the maker of Uggs footwear and said a recent slide in price made the stock more attractive. Shares are down roughly 20% in the past month.

Amgen — Shares of pharmaceutical giant Amgen slid as much as 1.4% on Monday after analysts at Mizuho downgraded the company to neutral from buy. The analysts said the downgrade was based “solely on valuation” and increased the price target to $212 per share from $208. The share price has risen more than 10 percent in the past month.

Aramark — The food service company’s stock soared 8.3% after a Securities and Exchange Commission filing showed that private equity firm Mantle Ridge had claimed a 20% stake.

Las Vegas SandsWynn Resorts — Major casino stocks Las Vegas Sands and Wynn Resorts jumped on Monday after a report indicated growing gambling revenue in Macau. Analysts from Nomura Instinet estimated that gross gambling revenue in Macau rose roughly 7% week over week, with the protests and airport closures in Hong Kong not making a major impact. Shares of Las Vegas Sands and Wynn Resorts were both up more than 4%.

Estee Lauder — Estee Lauder shares rallied more than 12% after the skincare-products maker reported better-than-expected results for the previous quarter. The company earned an adjusted 64 cents per share on revenue of $3.59 billion. Analysts polled by Refinitiv expected a profit of 53 cents a share on sales of $3.53 billion. Estee Lauder saw upside in its makeup and fragrance business. The company also issued strong earnings guidance for fiscal 2020.

PG&E — The embattled electric utility company from California fell 25.3% after a judge ruled that a jury can find them liable for as much as $18 billion in wildfire damages. In a separate ruling, a judge determined PG&E can retain control of its bankruptcy plan.

—CNBC’s Elizabeth Myong and Jesse Pound contributed to this report.


Facebook’s Libra Cryptocurrency Plans ‘Supercharged’ Central Banks’ Interest In This Barbados Startup

In the summer of 2016, when bitcoin was beginning its ascendance to a $20,000 all-time-high, Bitt, a Barbados-based startup, did something that at the time seemed rather bizarre: It issued a cryptocurrency backed by the Barbadian dollar. Many wondered why anyone would want to corrupt the efficiency of issuing currency on a shared, distributed ledger by introducing value controlled by a central authority.

Bitt’s headquarters in Barbados. BITT

Then came Facebook, which earlier this year announced its plans to issue libra, a cryptocurrency backed by a basket of currencies issued by central banks and designed to have all the benefits of blockchain, with the price stability of the strongest fiat currencies. Could this be the way to get people to actually spend cryptocurrency instead of just hold it like an investment?

Since then, central banks around the world have approached Bitt to learn more about how they can reimagine what money can be. Bitt CEO Rawdon Adams gave Forbes the inside scoop on how his company’s efforts have already begun to change the island nation, and what others are starting to learn from the process.

Excerpted from Forbes CryptoAsset & Blockchain Advisor. Join us Wednesday, August 21, 2019, for a free webinar discussing what Facebook’s libra means to investors, and other investing opportunities.

Forbes: You recently worked with the Central Bank of Barbados. Tell me a little bit about what you’ve done?

Rawdon Adams: Bitt just got through a regulatory sandbox with the Central Bank in Barbados. That’s really important to us for a number of different reasons, but mainly the Central Bank has as its mandate—consumer protection on the one hand, and to make sure it doesn’t introduce systemic risk into the economy on the other hand.

It likes to see anybody who’s involved in financial payments come through its gates. It checks out operations, processes, who’s running the company—just about every single thing you can think of is carried out in its due diligence process.

We started that process with the Central Bank in December and came out of it in the beginning of July. This allows us now to continue conversations we’ve already begun with financial partners because they seek comfort around who they partner up with. That’s especially true for credit unions and banks, but even larger merchants want to make sure you’ve been given approval by the regulator, in this case the Central Bank of Barbados. We’re the first company to go through this process and we’ve received a clean bill of health.

Forbes: In early 2016 Bitt launched a Barbadian dollar on a blockchain. Explain a bit about what happened and what’s the status now?

Adams: I came on board at the end of 2017. In 2016, Bitt did digitize a version of the Barbados dollar. At that time, the Central Bank didn’t have a regulatory sandbox to take a good look at what was going on. But it liked the idea of the digital dollar and allowed it to happen with an endorsement from the minister of finance at that time.

A lot of this is about context. The informal economy in this part of the world typically is responsible for 80% by value of all transactions that are carried out. That is cash transactions and those transactions are really expensive in terms of time, cash handling, security, distribution, reconciling accounts—receipts at the end of the day to cash, and so on. So, there is a broad recognition in these types of economies that every transaction you can push towards digital versus cash is probably going to hit the bottom line of the economy as a whole.

Quite a few studies, notably some that have been carried out on behalf of Mastercard by a German university but also more recently by the Bank of England, demonstrate economies with large informal sectors can, by pushing towards digital, realize a permanent increase in their rate of GDP growth between 2%-7%. It depends on the economy in question.

Forbes: What does passing the Central Bank’s program allow you to do that you couldn’t before?

Adams: This stamp of approval allows us to go to banks and credit unions with ideas of partnership. One reason this is key is that in order to bring this new blockchain technology to [the] mainstream, it is important to build bridges to the existing financial infrastructure.

Forbes: Are people in Barbados or in other nations in the area spending Barbadian dollars using Bitt technology?

Adams: You have to remember that Barbados is a small jurisdiction, so when we say we have 10,000 uses on the wallet, it may not sound like a lot, but there are 80,000 households in Barbados. A penetration of 10,000 isn’t bad, and we’ve had a steady uptick in transactions. It started out typically with peer-to-peer transfers within the island. But as we signed on merchants, in particular, and built out a merchant network (there are more than 1,000 merchants in the island on our network), we’ve been able to push transactions through. Small restaurants have been big users of our technology.

What’s been surprising to us is some of the organic stuff we’ve seen happen. A great example is on the transportation system. We got a public and a private setup in Barbados. The private operators have seen that going digital saves them a great deal of security around the handling of cash.

There were cases—one guy we talked to said his drivers were showing up at his house at 2 a.m. with a bag full of cash. That didn’t make him happy. They started using our technology for B2B purposes rather than for consumer-facing payments. We’ve started to [partner] with him to cover consumers as well as the back end of B2B—supplying these guys with cash to buy gas because the national network of gas stations is on our system. So, it ties up pretty neatly.

Forbes: What’s the difference between spending a Barbadian dollar using Bitt technology and using the traditional model?

Adams: I think the number one thing to recognize is that unlike places like Sweden, where 5% of all transactions by value are cash, in this region that number is about 80%.

So, cash is not good for carrying out certain types of transactions. That’s one answer. Anything that is a remote payment. We don’t have a well-developed e-commerce culture in this region either, so going digital first of all provides people with convenience. When they have bills, individuals can pay them online. That convenience is very important.

But it also provides a catalyst for small- and medium-size enterprises to boost their e-commerce platforms in particular. We’ve cases where a supermarket will say to us, “I pay the bank a 1% charge on the float in my cashiers. And our supermarket has about 60 cashiers. I pay two guys to reconcile receipts against cash every day, seven days a week. It takes them three or four hours. There’s the security around distributing the cash and so on and so forth.”

Forbes: It sounds to me like you’re saying it’s cheaper to spend smaller amounts of money. Is that a simple way to explain it?

Adams: For consumers, it is. For medium-size and large businesses, there are very significant gains. And partly around their cost of cash handling, which can be between 5% and 15%, depending on exactly which sector they’re in, but also in areas you wouldn’t necessarily assume they’d see savings. For example, in Treasury management. This is a region with 15 or so different fragmented currencies.

Forbes: With the 5%-to-15% fees, how does that compare with what they’re paying with Bitt?

Adams: Those are not fees. Well, I guess they’re accumulation of fees. Any fees that are associated with carrying float in your business, we don’t charge for that. Our business model is really based on the merchant side. Those costs of cash are considered almost structural. So, our costs around security to them is zero versus whatever they’re paying. We will have a service subscription model.

If they were to go all digital, they’d see significant savings. Typically, what we think is going to happen is those costs of handling cash—let’s say it’s 10%—they’ll probably go to 30% digital in a relatively short period of time. The proof of the pudding is in the eating. As they see the savings coming in then they’re likely to encourage their customers to go more and more.

Forbes: Is there a quantifiable way to compare savings?

Adams: There’s a key differentiator here. We don’t have a cost of digital cash. So, if someone is paying a security to move his funds to his business and to his bank—there is no comparator on our side. That will be a direct 100% savings. Anything that’s associated directly with handling cash, that just goes away if you’re the business.

Now, on the other side, where there are direct comparisons are with taking payments via card, a debit or a credit card. Typically for a consumer to pay with a debit card in Barbados, he will pay the bank $1.50 (that’s $0.75 U.S.) per transaction. We don’t charge the consumer anything. So they will save automatically.

We charge our merchants either 20 cents per a transaction or 5 cents a transaction. The difference between those two is if they are allowing people to cash in and out of digital dollars on the premises. So, if someone comes in—kind of like buying telephone credit–and physically has a $20 bill, and wants to make a 20 digital dollar deal, if the merchant is willing to carry out that switch, we’ll charge them the lower rate.

Forbes: We’ve largely focused on P2P payments, but what does enterprise and banking demand look like?

Adams: The first place we got into with enterprise was small- and medium-size merchants, because very often for them to access commercial banking was really expensive. For example, just to have a point-of-sale terminal, a Verifone or whatever it is in your premises, typically there would be an install charge that could be $1,000 and a rental charge per month, which is significant. They’d also have to pay per-card transaction fees. That cut a lot of small- and medium-size merchants out of digital financial inclusion, until we came along with a cheaper alternative and built this network, which is dominated mainly by small- and medium-size merchants and is a thousand strong.

We also have significant negotiations going on with two banks. One is regional and it validates our view that it is necessary sometimes to work from the inside to change what you see going on in the financial system.

Forbes: Who you’re working with now?

Adams: Two companies were sort of breakthroughs to us. The first is Sol Petroleum, which is present in 23 countries. It was acquired by Parkland, a Canadian petroleum company, in January. It is one of two that dominate the network in Barbados and in this region. We got a pilot with Sol; we were able to demonstrate savings against existing payment methods (this is excluding the cost of cash) of more than 80% on what it was paying through its current bankers. Sol agreed to roll out nationally on the back of the pilot. That’s something we’re aiming to do later this year.

The second one that was very significant to us is a supermarket chain called AOne Supermarkets. Again, we carried out a pilot with them. This is where we got a lot of our hard data from on things like the fees they would pay a bank to have a float, what it was costing them to reconcile receipts, and so on.

Forbes: What’s been your interaction with central banks since the news came out about the Libra Association and Facebook’s plan to use a cryptocurrency backed by central bank-issued currencies?

Adams: Well, pre-Libra we’d had a lot of interaction with central banks on the back of the pilot contract we signed with the Eastern Caribbean Central Bank. But it is true Libra has come along and kind of supercharged things—it’s definitely a catalyst. I can’t speak for all central banks, but I think Facebook’s white paper certainly has gotten them thinking. You had a range of reactions from relatively relaxed from the Bank of England to President Trump’s negative tweets.

I think overall, it’s actually good for us. There are really quite stark differences between what Libra’s proposing and what we see as a central bank digital currency. On our side it is important to be regulated. You can with a central bank digital currency tell clients that it’s legal tender—meaning it has to be accepted and is regulated and backed by assets on a central bank balance sheet. This is really key.

ForbesDid you see an uptick or any sort of change in how many central banks reached out to you in the post-Libra world?

Adams: Yes, we’re seeing a higher volume of questions. We have tentacles out to a lot of central banks. But the Libra announcement has increased the amount of communication for sure. I’m not sure anyone really has a clear idea of how it’s going to look in reality. I think there are some questions around its intentions that worry regulators a lot. And that’s why we get some of the questions. I can’t imagine what it’s like in Facebook headquarters.

Our chief business development officer has been talking with some of the currency unions in West Africa and a bunch of central bankers in London. He’s definitely seen a significant increase in those questions. It has helped us because we essentially get to talk to central bankers and their teams more often since the announcement and can delineate some of the differences that we see between what we’re doing and what Libra is doing. Questions about regulation and the difference between low- and high-value transactions, and remittances typically come up.

ForbesAny last thoughts?

Adams: I’d like to mention that in the last few weeks we’ve had five different government departments reach out to us to discuss how they can integrate payments. This might be things like paying for your driver’s license or how they can use our technology to get around some of the pain points that they’ve got, especially around queues, waiting lines, settlement times, and so on.

Forbes: Thank you, Rawdon.


Bitcoin’s Price is Up More Than $1K Since Bakkt Futures News

  • Bitcoin has risen by $1,000 since Friday’s announcement by Bakkt exchange that it will be launching physically-settled bitcoin futures on Sept. 23. The price rise has neutralized the bearish setup on the intraday charts seen last week.
  • The gains could be extended further to $11,000, as the hourly chart is reporting a bullish continuation pattern.
  • The weekly chart continues to call a deeper pullback to $9,000 with key moving averages (MAs) producing a first bearish crossover since February.
  • A weekly close above $12,000 is needed for a complete bullish revival.

Bitcoin (BTC) has gained $1,000 since the Bakkt exchange announced it has the green light to offer bitcoin futures, but key resistance still lies ahead.

The top cryptocurrency picked up a bid around $9,700 in the U.S. trading hours on Friday and printed highs above $10,750 earlier today, according to Bitstamp data.

Notably, the move above $10,000 happened on Friday after CoinDesk reported that the Intercontinental Exchange’s young subsidiary Bakkt has received regulatory approval to launch its much-anticipated platform for daily and monthly BTC futures.

Bitcoin futures to be launched by Bakkt will be physically settled, as opposed to the cash-settled futures listed on the Chicago Mercantile Exchange.

Put simply, BTC futures trading on Bakkt will not rely upon unregulated spot markets for settlement prices and the party will receive delivery of bitcoins from the Bakkt Digital Asset Warehouse at the end of the contract period.

Many observers, including cryptocurrency analyst and trader Scott Melker, are of the opinion that Bakkt’s physically-delivered futures product will open the floodgates for the institutional money and is a long-term bullish development for bitcoin.

Physically delivered futures require the actual purchase of bitcoins, which, according to Melker is a “huge” development. Also, there is general consensus that the price discovery in new physical delivery markets will contribute to building confidence in BTC prices.

That said, some observers are warning that an increased institutional volume my not necessarily translate into stronger buying pressure.

“Volume is volume, don’t express your bias toward it”, popular Cryptocurrency market analyst @CryptoNekoZ tweeted earlier today.

Meanwhile, financial analyst and tech journalist Joseph Young tweeted over the weekend that, “Bakkt launch was priced into the market”.

So far, the markets have reacted positively to Bakkt news if the $1,000 price rise is anything to go by.

The cryptocurrency is currently trading at $10,700 on Bitstamp and could rise further to $11,000. The gains, however, could be short-lived as the odds are stacked against the bulls, according to technical charts.

Hourly chart

BTC witnessed a high-volume ascending triangle breakout earlier today. The bullish continuation pattern indicates a resumption of the rally from the last week’s low of $9,467 and has created room for a rise to $11,000.

So far, however, the upside has been capped around $10,750.

Weekly chart

BTC fell 10.49 percent last week, strengthening the case for a deeper pullback put forward by the preceding week’s rejection above $12,000.

The 14-week relative strength index has created a bearish lower high. Further, the 5-week moving average (MA) has crossed below the 10-week MA for the first time since February.

Currently, the 5-week MA is seen at $10,610 and the 10-week MA is located at $10,691.  The bearish crossover indicates the path of least resistance is to the downside.

The moving average convergence divergence histogram continues to produce lower highs above the zero line, a sign of weakening bullish momentum.

All-in-all, the case for a fall back to $9,000 remains intact. The outlook would turn bullish only if prices print a weekly close (Sunday, UTC) above $12,000.

Bitcoin image via Shutterstock; charts by Trading View