Crypto Markets are Volatile with 87K of Bitcoin Options Expiring

● The Crypto Strategy of Visa is pushing its next growth stage.
● Forex Today: Apprehension drives the market for the dollar.

Welcome to Saturday’s edition of Weekly Round Up, where we try and cover the biggest stories of the week and examine how they might affect the macro picture of cryptocurrency and financial markets as a whole. We jump right in this week with a story that sits at the intersection of traditional and digital finance.

In a recent story by Forbes Magazine, it was reported that Visa, the world’s largest payment system, is driving its next stage of growth around its cryptocurrency strategy. For anyone following cryptocurrency, this should come at no surprise. Bitcoin and cryptocurrency as a whole were invented to bring change to the existing financial system, one that many felt was far too exclusive and expensive. These new technologies pioneered by Satoshi brought about change in a big way. For the first time ever, humans across the world had the potential to send money across the world without any of the traditional middlemen like banks and payment processors. Most of these aforementioned middlemen dismissed blockchain technology as unnecessary and dangerous, but one can assume these concerns were largely driven by the potential loss of market share. Some, however, were much more receptive; rather than trying to fight the growing wave, some companies went the opposite direction and decided to adopt it alongside their own technology. And that’s exactly what Visa’s vision of the future looks like.

Forbes Magazine recently spoke with Terry Angelos, SVP global head of fintech at Visa and Cuy Sheffield, senior director, head of crypto at Visa. The duo went into great lengths about the many different operations they have their eyes set on, everything from using blockchain as a settlement layer to handling direct payments of bank-issued stablecoins. While the details are a tad sparse, one thing is clear after reading this: cryptocurrency and digital assets are not going anywhere. Visa is one of the world’s largest payments providers, and they have entire teams and divisions being built out around this wave of blockchain technology. For those who are keeping track, this is just one more overwhelming sign that cryptocurrency is indeed the disruptive force that Satoshi sought it out to be.

Moving onto market coverage, we take a look at the Bitcoin derivatives market. In the last few months we’ve continually seen record-high levels of volume. This helps to explain the massive amounts of volatility we’ve seen dating back to late July. For those hoping the ride gets smoother in the short-term, we wouldn’t suggest you hold your breath. This Friday, September 25th, more than 87,000 worth of Bitcoin options are set to expire. Judging by the recent downward slope chart, it seems a large number of investors have already sold off their holdings, thereby pricing this event as a high-risk event. This impending move is not limited to Bitcoin, either. More than 417,000,000 worth of Ethereum options are also set to expire on the same day. While it’s tough to say whether these expirations will trigger a move upwards or downwards, we do have one piece of advice: if you’re holding positions, brace for volatility. Time and time again, we have seen the derivatives market have a sizable impact on Bitcoin and Ethereum price, due simply to the massive amounts of volume that are being traded within these markets (most of whom are institutional investors or simply whales). We do not expect this expiration to go any differently.

To round off today’s headlines, we shift over to the traditional finance world. More specifically, we’ll take a look at the interplay between the US dollar and markets as a whole. Taking a look at the chart, we can see the US dollar continues to rally with the American currency reaching highs not seen in nearly two months – in spite of mixed recent US data figures. Even with the mixed data, as well as uncertainty surrounding the election in the US, it seems investors are more concerned with global growth as a whole, which is why they are flocking to the world’s safe-haven asset. This comes at no surprise considering how hands-on the US Federal Reserve has been with monetary intervention, demonstrating they will do anything to sustain the United States economy and financial system. Several things still loom on the horizon for the United States, though. There have been no new developments regarding the coronavirus aid packages, and the government’s ‘warp-speed’ vaccine plan has still yet to come to fruition. Despite any shortcomings one may have with the US at the moment, the simple fact is that investors seem to see the US dollar as less risky versus almost every other asset, from the Euro and the Pound to Gold and Silver. At the bare minimum, we simply continue to see the US dollar being the leading indicator amongst all global markets, and we don’t expect that to change for the near future.

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