Nasdaq Research launches Bitcoin futures, fierce competition on digital currency track

Author: Song Jiaji, Renhe Yi  

Summary

Event: Nasdaq is actively researching the launch of Bitcoin futures, Singapore's cryptocurrency regulatory law has taken effect, and open license applications to global companies. On the digital currency track, deepening regulation and competition among financial centers will profoundly affect the development of the industry. Nasdaq is working with partners to launch bitcoin futures. Nasdaq CEO Adena Friedman said recently that Nasdaq is trying to launch bitcoin futures products. Friedman said in an interview with Bloomberg News that the company is currently researching and exploring the launch of Bitcoin futures with an anonymous partner. The NASDAQ's launch of Bitcoin futures is based on two considerations: first, the company wants to ensure that it can bring a distinctive product to the market; second, it wants to ensure that it has a proper risk management foundation and can Prepare for futures products linked to cryptocurrencies. In December 2018, Nasdaq announced its investment in the cryptocurrency exchange ErisX, but it was approved by the US Commodity Futures Trading Commission (CFTC) earlier than Bakkt, which can also launch compliant Bitcoin futures. There is no doubt that cryptocurrency derivatives such as Bitcoin futures and options will become the next high ground for competition among various financial centers and stock exchanges.

Singapore's cryptocurrency regulatory law came into effect, opened license applications to global companies, and actively built a new digital asset center. On January 28, Singapore introduced new payment legislation, the Payment Services Act, which for the first time provided a global cryptocurrency company with the opportunity to apply for an operating license to conduct its business in the country. The bill is the first comprehensive regulatory requirement for businesses engaging in digital payment token transactions such as Bitcoin and Ethereum. With the active promotion of Singapore's legislation and regulation, it will continue to provide a more ideal environment for blockchain entrepreneurship and actively build a new digital asset center.

The current international situation is constantly changing, especially with signs of escalation in the Middle East conflict. Bitcoin has maintained an upward momentum in the past and is currently returning to the level of $ 9,300. But cryptocurrency financing and cross-border anonymous transactions have also caused caution in some national regulators. The Indian central bank has said it will restrict domestic banks from engaging in cryptocurrency-related businesses, but does not ban the use of cryptocurrencies. The Reserve Bank of India (RBI), the central bank of India, said it has banned financial institutions from engaging in cryptocurrency-related businesses given a range of known risks. With the changes in the international situation, the investment activities of cryptocurrencies such as Bitcoin have been increasingly restricted.

Last week's market review: Chainext CSI 100 rose 9.20%, and the storage & computing performance in the segment was the best. From the perspective of subdivisions, payment transactions, entertainment and social media, business finance, infrastructure enhancement, infrastructure chain, and storage & computing performance all outperformed the Chainext CSI 100 average levels of 9.34%, 12.74%, 17.96%, 16.31%, and 14.52 respectively. %, 27.55%; the performance of IoT & traceability, pure currency, and AI were all lower than the average level of Chainext CSI 100, which were 9.1%, 8.6%, -1.58%, respectively.

Risk Warning : Uncertainty in regulatory policies, and the development of blockchain infrastructure is not up to expectations.

I. NASDAQ research and launch Bitcoin futures, fierce competition on digital currency track
Event: Nasdaq is actively researching the launch of Bitcoin futures, Singapore's cryptocurrency regulatory law has taken effect, and open license applications to global companies. On the digital currency track, deepening supervision and competition for financial center resources will profoundly affect the development of the industry. Nasdaq is working with partners to launch bitcoin futures. Nasdaq CEO Adena Friedman said recently that Nasdaq is trying to launch bitcoin futures products. Friedman said in an interview with Bloomberg News that the company is currently researching and exploring the launch of Bitcoin futures with an anonymous partner. As early as November 2017, the Wall Street Journal reported that Nasdaq partnered with American financial services company Cantor Fitzgerald to develop this product, with the goal of launching it in the first half of 2018. Since then, a large number of Bitcoin derivatives have entered the market, including futures products launched by Nasdaq competitors. In September 2019, the NYSE parent company Intercontinental Exchange launched bitcoin futures through its subsidiary Bakkt, and subsequently listed bitcoin options on December 9. Nasdaq is clearly not in an advantageous position in the field of cryptocurrency derivatives . The NASDAQ's launch of Bitcoin futures is based on two considerations: first, the company wants to ensure that it can bring a distinctive product to the market; second, it wants to ensure that it has a proper risk management foundation and can Prepare for futures products linked to cryptocurrencies. In December 2018, Nasdaq announced its investment in the cryptocurrency exchange ErisX, but it was approved by the US Commodity Futures Trading Commission (CFTC) earlier than Bakkt, which can also launch compliant Bitcoin futures. There is no doubt that cryptocurrency derivatives such as Bitcoin futures and options will become the next high ground for competition among various financial centers and stock exchanges.

Singapore's cryptocurrency regulatory law came into effect, opened license applications to global companies, and actively built a new digital asset center. On January 28, Singapore introduced new payment legislation, the Payment Services Act, which for the first time provided a global cryptocurrency company with the opportunity to apply for an operating license to conduct its business in the country. The bill is the first comprehensive regulatory requirement for businesses engaging in digital payment token transactions such as Bitcoin and Ethereum. In addition to bringing cryptocurrency companies into the regulatory sphere, the law will also grant the Singapore Monetary Authority (MAS) formal regulatory powers to regulate cybersecurity risks and control money laundering and terrorist financing activities. At present, Japan is the main cryptocurrency trading center in Asia. Since 2017, 22 exchanges have obtained trading licenses in Japan. Increasing interest from global investors in digital tokens has prompted multiple regulators to review relevant platforms, especially for money laundering and other illegal activities. With the active promotion of Singapore's legislation and regulation, it will continue to provide a more ideal environment for blockchain entrepreneurship and actively build a new digital asset center.

The current international situation is constantly changing, especially with signs of escalation in the Middle East conflict. Bitcoin has maintained an upward momentum in the past and is currently returning to the level of $ 9,300. But cryptocurrency financing and cross-border anonymous transactions have also caused caution in some national regulators. The Indian central bank has said it will restrict domestic banks from engaging in cryptocurrency-related businesses, but does not ban the use of cryptocurrencies. The Reserve Bank of India (RBI), the central bank of India, said it has banned financial institutions from engaging in cryptocurrency-related businesses given a range of known risks. The Internet and Mobile Association of India (IAMAI) is currently appealing to the Supreme Court on behalf of companies affected by the April 2018 ban. In its response to the association's complaint, the Reserve Bank of India further stated that the ban only restricted banks in India from entering the cryptocurrency field and did not completely prohibit the use of cryptocurrencies. The Economic Times reported that it had seen a 30-page copy of the affidavit filed by the Reserve Bank of India to the Supreme Court in September, citing a response: "First, the Reserve Bank of India and the Virtual currency (VC) has not been banned in India. The Reserve Bank of India has issued instructions to entities under its supervision and may not provide services to individuals and entities engaged in virtual currency trading or settlement … The Reserve Bank of India can prohibit Entity participation in activities that constitute reputational or financial risks, as well as other legal and operational risks. "The Reserve Bank of India is particularly concerned about the use of cryptocurrencies for illegal financing and has stated that" anonymous cross-border transactions must be dealt with promptly and seriously " . With the changes in the international situation, the investment activities of cryptocurrencies such as Bitcoin have been increasingly restricted.

Second, government related news: India's "National Blockchain Strategy" draft proposes the issuance of central bank digital currency CBDR
China : The State Intellectual Property Office has amended the "Patent Examination Guidelines" and implemented from February 1, 2020. This amendment provides for the specificity of the examination of certain types of invention patent applications in accordance with the Patent Law and its Implementing Rules. The invention patent application generally includes the rules and method features of intellectual activities such as algorithms or business rules and methods, involving artificial intelligence, "Internet +", big data, and blockchain. India : On January 28th, the National Intelligent Governance Institute (NISG), a non-profit public institution registered by the Indian government, has now submitted the National Blockchain Strategy. The draft explains and introduces the challenges and impacts of blockchain, smart contracts, and blockchain technology adoption. In addition, the strategy document states that it is necessary to clearly distinguish between different types of blockchain systems. With the exception of other uses of blockchain, the draft strategy proposes that the Indian government and the Reserve Bank of India issue a central bank digital INR (CBDR) and support decentralized applications. In short, the draft emphasizes that laws and regulations should be based on the functions performed by the blockchain and not on the technology itself. The draft also proposes the establishment of an agency to coordinate blockchain strategies between state agencies.

United Arab Emirates : On February 2, the UAE Ministry of Health and Prevention (MoHAP) cooperated with the Presidential Affairs Department, Dubai Medical City and other relevant health departments to launch a blockchain-based health data storage platform for storing health and pharmaceutical products. Data from government agencies and related private agencies, health professionals, and drug information.

Singapore : On January 28, the Monetary Authority of Singapore (MAS) announced the formal launch of the Payment Service Act 2019. The bill will improve the regulatory framework for payment services in Singapore, strengthen consumer protection, and increase confidence in the use of electronic payments. The bill stipulates that licenses will be issued based on transaction activities to determine different types of payment services and the latest developments; the bill also expands the scope of the HKMA to include new payment methods such as digital token payments.

Spain : On January 30, the Spanish tax agency AEAT said it would strengthen its review of cryptocurrencies in 2020. The agency also emphasized its position on Bitcoin and altcoins: using them poses significant financial risks.

Switzerland : On January 29, Zermatt, Switzerland officially allowed taxpayers to pay taxes in Bitcoin (BTC), which is the second city in Switzerland to accept BTC. It is reported that Zermatt authorities have cooperated with Bitcoin Suisse, Switzerland's main cryptocurrency financial services company, to implement a new taxation approach. Previously, Zug became the first city in Switzerland to accept Bitcoin payments in 2016.

United Kingdom : On January 26, the UK Revenue and Customs Authority announced that it has issued a public reward of $ 130,000, requesting the development of a tool to help tax agencies collect intelligence through cluster analysis. This statement is the latest move by European lawmakers to respond to the anonymous nature of cryptocurrencies, and one of its goals is privacy tokens such as Monero (XMR), Zcash (ZEC), and Dash (Dash).

Ukraine : The official website of the Ministry of Finance of Ukraine announced on January 23 that Finance Minister Oksana Markarova revealed that Ukrainian government departments will be able to prohibit cryptocurrency wallets from being used to seize illegal assets. The regulator, the State Financial Supervision Agency of Ukraine (SFMS), will be responsible for tracking the source of funds for the national cryptocurrency wallet. This is the power conferred by crypto-related laws approved by the Ukrainian government in December 2019.

Third, the industry chain related dynamics: BTC transaction volume rose 3.4%
(The following source website data is updated to February 2.) Last week, BTC added 2.22 million transactions, an increase of 3.4% from the previous month; ETH added 3.78 million transactions, which was a 5.4% decrease from the previous month.

Last week, the average daily income of BTC miners was 17.16 million US dollars, an increase of 3.4% from the previous month; the average daily income of ETH miners was 1.97 million US dollars, a decrease of 8.9% from the previous month.

Last week, the average daily hashrate of BTC reached 111.7EH / s, a decrease of 1.4% from the previous month; the daily average hashrate of ETH across the network reached 163.9TH / s, a decrease of 1.3% from the previous quarter. Last week's BTC network-wide mining difficulty was 15.47T, an increase of 3.7% month-on-month; the next difficulty adjustment date is February 10, and the expected difficulty value is 16.09 T (+ 4.03%); last week, the average ETH network-wide mining difficulty was 2.07T, a 1.2% decrease from the previous quarter.

Fourth, the market review last week: Chainext CSI 100 rose 9.20%, the best performance of storage & computing in the segment
We introduced the Chainext CSI series of professional index products in the token market, in which the CSI 100 index represents the overall market trend; the CSI 5 index represents the market's large-cap market currency trend; and the CSI 21-100 index represents the market's small-cap market trend. The market continued to adjust this week. As of last Sunday (February 2), the Chainext CSI 100 index was 852.00, an increase of 9.20% from last week, and the total 24-hour trading volume on Sunday was US $ 65.866 billion; of which, the global average price of BTC was US $ 934.37, an increase from the previous month 8.42%; the average global price of ETH was $ 188.62, an increase of 12.38% from the previous quarter.
From the perspective of subdivisions, payment transactions, entertainment and social media, business finance, infrastructure enhancement, infrastructure chain, and storage & computing performance all outperformed the Chainext CSI 100 average levels of 9.34%, 12.74%, 17.96%, 16.31%, and 14.52 respectively. %, 27.55%; the performance of IoT & traceability, pure currency, and AI were all lower than the average level of Chainext CSI 100, which were 9.1%, 8.6%, -1.58%, respectively.
risk warning
Regulatory policy uncertainty. At present, the blockchain is in the early stage of development. There is a certain degree of uncertainty in the global countries' supervision of blockchain technology, project financing and tokens, so there is uncertainty in the development of industry company projects. The development of blockchain infrastructure failed to meet expectations. Blockchain is the core technology for solving supply chain finance and digital identity. At present, the blockchain infrastructure cannot support high-performance network deployment. The degree of decentralization and security will have a certain restriction on high performance. The blockchain infrastructure exists The risk of developing less than expected.

This article is an excerpt from the report “Guosheng Blockchain | Nasdaq Research Launches Bitcoin Futures, and the Digital Currency Race Is Fiercely Competitive”, which was published on February 4, 2020 by Guosheng Securities Research Institute. For details, please refer to the relevant report.