Bitcoin continues to show bullish signs and experts continue to hold that we are going to see a huge market uptrend this year. While crypto talk dominated the week, a few developments at crypto exchanges and regulation continues to hold promise for a better future in the space.
Last week, a new survey revealed that experienced traders prefer to trade on desktop computers with most of the traders using more than one exchange to both hedge risks and minimize benefits. The study also revealed that most traders look for simplicity in exchanges over anything else. Other factors that were mentioned as important include fast deposit and withdrawal speeds, and most prefer exchanges that avoid charging customers for anything but the trading itself. According to the study, 80% of traders have less than 3 years experience and thus seek beginner tools including demo accounts and tutorials which are key factors of choosing an exchange.
Also last week, a new report revealed that bitcoin trading volumes more than doubled in a week. Per the report, the 7-day average daily volume has seen a 126% increase in a week with almost $1.5 billion traded in just one day, last week. At the same time, transactions value grew by one-forth and miner fees increased by over 40%. All of this points to a bullish outlook that is expected to deliver 100% returns to investors in 2020.
According to last week reports, the Financial Services Agency (FSA), Japan’s finance regulator, is expected to limit margin leverage to twice the total of traders’ deposits. This will result in significant restrictions on margin trading as soon as Spring. While this has become a cause of controversy for some who attribute it to crypto price performance manipulation, it might just be a worthwhile trade-off as margin trading involves significantly larger market moves during periods of volatility on crypto markets which result in potential size of wins or losses. Japan seeks to be a crypto-friendly jurisdiction through fostering permissive regulations and close monitoring of exchanges.
JP Morgan, the United States largest bank, last week said that it believes interest in the CME Group’s new Bitcoin options expected to launch this week will be high. Futures have seen significant gains, rising 15% in the first week of 2020, and theories among commentators attribute the strong performance to the geopolitics centered on Iran. JP Morgan believes the unusually strong recent strong activity likely reflects the high anticipation among market participants of the option contract. Meanwhile, crypto derivatives exchange, FTX, has also launched Bitcoin options trading with trading volumes reaching $1 million in about 2 hours from launch. OKEx has also announced its upcoming crypto options trading by end of January 2020.
Last week, the European Union’s 5th Anti-Money Laundering Directive (5AMLD) came into effect and for the first time, its regulatory scope now includes the crypto service providers like exchanges and custodian wallet providers. The new law now requires crypto services within the EU to increase transparency and give European financial regulators better access to information via centralized bank account registers. The new law also requires broadening the criteria for assessing high-risk third countries and ensure high level of safeguards for money moving to or from such countries. Any service operating within the EU will also be required to cooperate and improve the exchange of information between AML supervisors and with the European Central Bank.
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