Qume Market Mondays -11th Jan, 2021

Welcome to another edition of Qume Market Mondays

Bitcoin

Rising institutional interest in bitcoin has played a major role in bitcoin hitting a new all-time high every other week. Companies such as MicroStrategy and SkyBridge capital have heavily invested in bitcoin in the last 2–3 months.

CME has announced that its highly anticipated bitcoin options are now open for trading. This has driven up the price of bitcoin further.

However, past trends suggest that bitcoin is prone to wild swings and the asset value depreciates by at least 25% almost every year from its year high. Moreover, this huge rally is raising red alerts among regulators and they may move to control bitcoin movements in their jurisdictions.

The market’s extreme bullish sentiment in the financial markets has been known to create bubbles that are ready to pop at any time. The price crash that followed today is not a new phenomenon for bitcoin. The asset went down more the 20% today, it is now trading at $31,500+ price levels.

We are currently looking at correction in the markets. This is a natural part of market mechanics and though it is disheartening in short term it ensures the longevity of the Financial world.

With spiked levels of volatility, Arb opportunities have opened up in the futures and derivatives markets within Karken and BitMEX.

DeFi

Total value locked in DeFi markets had crossed $20B before the price dump. It currently stands it at $19.72B. Almost every DeFi platform is generative negative yields.

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