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Bitcoin's Future Is All Mapped Out

Published: 20:05 08 Dec 2017 AEDT

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Bitcoin's Future Is All Mapped Out
This article by Marcus Ashworth for Bloomberg may be of interest to subscribers. Here is a section:
And, in fairness, there's a game attempt to stop this being completely off-the-scale Wild West stuff. It's a cash-settled futures contract in U.S. dollars, with no actual delivery of Bitcoin required. The exchange will impose a minimum initial margin -- the deposit required to trade a specified amount of futures contracts -- of 35 percent. That's seven times more than for trading oil or mini-S&P equity futures. There will be a twice-daily requirement to make sure the 35 percent buffer is intact, given Bitcoin's constant swings. Clearing members can impose a higher limit if they want. Two-minute trading breaks will kick in if the daily price moves 7 percent away from the previous day's settlement price, then again at 13 percent and a hard limit at 20 percent when all trading will cease unless trading can restart within that band. There are no stated plans to offer options on the futures, until the contract is fully established. That would be too much rocket fuel.

Eoin Treacy's view
Anticipation about the wall of money that could hit the bitcoin market with the introduction of futures is propelling speculation in the original cryptocurrency. This is an acceleration which is close to the ferocity of the move in 2013 when the price first managed to reach $1000 despite the fact it is multiples that level today. 

China's Banks Need More Capital After Credit Boom, IMF Says
Thanks to a subscriber for this article from Bloomberg News which may be of interest to subscribers. Here is a section:
President Xi Jinping has highlighted financial stability as a top priority. People’s Bank of China Governor Zhou Xiaochuan warned in October about the risk of a ‘Minsky moment,’ or a sudden collapse of asset values. Financial watchdogs last month promised to overhaul regulation of asset-management products, which hold about $15 trillion and are seen as a key threat to stability.

Speaking to media on Thursday on a video call, the IMF’s deputy director of monetary and capital markets, Ratna Sahay, said China’s financial system held three main risks. She pointed to an increase in credit that in other countries has been linked to financial distress. An increasingly complex and opaque financial system makes it hard to identify risks, and implicit guarantees encourage excessive risk-taking, she said.

Credit growth needs to slow, guarantees should be gradually removed, and banks need more capital during that process, Sahay said. “Banks need to have some buffers in order to protect against any possible distress that might happen,’’ she said.

Eoin Treacy's view
Financial stability is a priority for every country and just about everywhere has its own version of implicit guarantees. We can only imagine what would happen in the USA if the now explicit guarantee behind Fannie Mae and Freddie Mac were removed. What state would the financial sector be in now if the EU and UK had not stepped in to backstop it during what was dubbed a sovereign debt crisis but was in fact a cross border banking sector calamity? 

Stock Wobble No Help to Gold as Market Bets on U.S. Rate Hike

This note by Eddie van der Walt for Bloomberg may be of interest to subscribers. Here it is in full:
Falling stock prices and geopolitical risks haven’t done much to support gold amid expectations of tighter U.S. monetary policy.

Metal for immediate delivery fell to the lowest in four months at $1,252.44 an ounce in London, having dropped every day this week as traders factor in an increase in interest rates this month as a near certainty. Prices declined despite growing volatility in equity markets, with the S&P 500 Index losing ground in four of the last five sessions.

“The rate hike is now looming and people are suddenly realizing that gold may not be the most attractive long position at the moment,” said David Govett, head of precious metals trading at Marex Spectron in London.

Bullion is heading for the the first back-to-back annual advance since 2012, but traders recently have dented those gains. Higher rates and a change in leadership at the Fed have outweighed deepening geopolitical risks, including the threat of war on the Korean peninsula and a third intifada in Israel.

“People’s memories are short and their pockets not so deep,” Govett said.

Eoin Treacy's view
Gold does best when inflation is rising faster than central banks are willing to raise interest rates. That is when its credentials as a store of value really shine. Alternatively, it also does well in a supply inelasticity meets rising demand environment such as we saw in the last major bull advance that peaked in 2011. Right now, we are somewhere in between with expectations for future inflation outpacing the reality represented by official statistics so gold remains largely rangebound, albeit with a downward bias as of today.

EU Says Talks to Go All Night as Irish Deal Close
Here is the latest update on the UK’s negotiations with the EU on the status of the Irish border at the time of writing:
Talks will go through the night as the U.K. and European Union seek a deal on the status of the Irish border so that Brexit talks can finally move on to crucial trade negotiations.

"We are making progress but not yet fully there. Talks are continuing through the night,” chief EU spokesman Margaritis Schinas said in a Twitter post.

EU Commission President Jean-Claude Juncker has spoken to Irish Prime Minister Leo Varadkar and U.K. Prime Minister Theresa May by phone. EU Council President Donald Tusk is due to speak to reporters at dawn in Brussels on Friday.
The U.K. isn’t confirming that a deal has been done, nor whether May will head to Brussels.

If a breakthrough on the sensitive issue of the Irish border is reached -- and the Northern Irish kingmakers in the DUP accept it -- then the three key divorce issues will have been settled, allowing talks to move on to the future relationship and the transition deal that businesses are desperate to get in place. The pound rose 0.5 percent.


Eoin Treacy's view
British business wants a deal. The City of London, which represents a significant proportion of the economy, wants a deal. Therefore, despite sound arguments about the independence of Parliament and wish to have trade deals which are more positive for the UK, a deal remains likely as does a transition agreement which could be potentially lengthy.

Eoin's personal portfolio: currency trade opened

Eoin Treacy's view
Details of this trade are posted in the Subscriber's Area.

Eoin's personal portfolio update


Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

9 hours, 59 minutes ago