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Digital Derivatives WeeklyMarch 13, 2020

Introducing 'Digital Derivatives'

Jitender Tokas
Chief Business Officer
March 13, 2020

Introducing ‘Digital Derivatives’

Digital Derivatives is a weekly newsletter bringing you the latest research,informationandanalyticsfrom thecryptocurrency derivatives spacebrought to you byDelta Exchange.

This weeklyletter includes our analysis of recent developments in this space, including trends, conversations, exchange developments and everything in between.

Market Sentiment Plummets As Bitcoin Drops 48% In 24 Hours

Cryptocurrency market sentiment looks bleak amid broader equity sell-off as the world struggles to manage oil price wars and the spread of COVID-19.

In just over 24 hours, theprice of Bitcoin stumbled 48%, hitting aone-year lowas over$90 billionwere wiped off the value of the digital asset market.🚨

To put this into perspective:

  • The drop represents thebiggest ever 24-hour price dropfor Bitcoin on record, to a low not seen since March 2019.📉
  • Bitcoin Futures aretrading at discountfor the first time since January 2019.
  • Over$500m worth of XBTlongs were liquidated on BitMEX.
  • Trading volume on XBT/USD reached anall-time high, withnearly $50 billion worth of Bitcoin Futures contracts traded in less than 24 hours.📈
  • Implied volatility spiked 50 pointsreflecting the increased market volatility. This was a10 standard deviation eventrelative to what was priced in (i.e. something normal distribution modelling renders impossible.)

March 12th was an unparalleledday across digital asset markets and the outlook remains discouraging. We expect the trend to continue for the foreseeable future, albeit on a less significant scale,as global uncertainty grows.

Market Moves

  • Bitcoin (BTC) –$5,660.82(-18.07%)
  • Ethereum (ETH) –$132.32 (-15.74%)
  • Ripple (XRP)–$0.157(-11.71%)
  • Bitcoin Cash (BCH)–$173.32(-21.62%)
  • Litecoin (LTC)–$35.37(-11.12%)
  • EOS (EOS) –$2.04(-16.81%)
  • Tezos (XTZ)–$1.66(-12.92%)

Derivatives Insights

BitMEX Open InterestOn XBTUSD Drops 45% In 12Hours

Over the last 24hours,Open Interest (OI)on the XBTUSD pair on BitMEX hasdropped from $840million to $433millionas the price of Bitcoin fell to $5,620.

Open Interest refers to the number of outstanding derivatives contracts that have yet to be settled. Open Interest provides an interesting insight into derivatives market activity, with decreasing OI representing a significant outflow of money from market.

The Open Interest on the XBTUSD pair on BitMEX reached an all time high of$1.06 billionone month ago, on February 15th, and is now at its lowest value sinceMay 2019.

CBOE Volatility Index (VIX) Reaches 75

The CBOE Volatility Index (VIX) iscurrently sitting at 75and is now at thehighest it has been since November 2008, quoting a higher 24-hour trade volume than Bitcoin.

The CBOE VIX is an index representing investorsexpectations of 30-day forward-looking market volatility. Also known as the ‘Fear Index‘, the VIXprovides an insight into market risk and sentiment, representing current levels of investor fear.

Established in 1993, it is only thesecond time in itshistorythat the CBOE VIX has gone above 50, representing significant uncertainty surrounding the future of the US equity markets. Specifically, VIX is up over390% in the past 30 days, and up430% in the previous 3 months.

Bitcoin Futures AtDiscount –Fall From 3% To -3%

Bitcoin Futures are currently trading at adiscount to spot pricesfor the first time in 2020 – falling from +3% in January 2020 to -3% – signalling abearish outlookon things to come.

Futures contracts represent agreements between parties to buy or sell BTC at a specific price and date in the future, allowing for hedging or speculation of the underlying asset. As such, prices trading at a discount to spot prices (referred to asmarket inversion) is a clear indication of bearish expectations.

On Delta, Bitcoin March 2020 Futures arecurrently trading at $5221.5, representing nearly a 4% discount to spot prices.CME Bitcoin March 2020 Futuresaretrading at $5385.0, a 0.7% discount, withCME April 2020Futurestrading at $5380.0, a 0.87% discount.

Delta Exchange Developments

Launch of BTC & ETH MOVE Contracts

We’re excited to announce the launch of BTC & ETH MOVE Contracts as the first exchange in the digital asset space to do so.

MOVE contracts are an exciting new class of derivatives contracts, where the price is proportional to the absolute value of a movement in the price of the underlying asset (BTC or ETH), over a certain time period. As such, the direction of movement of the asset becomes irrelevant, allowing traders to bet on the underlying movement and volatility of the contract.

Read our in-depthMOVE Contracts Guideand view the markets here:

Deep Dive Into The World of CryptocurrenciesDelta Exchange Cofounder and CEO sat down with MaiCoin Group – Taiwan’s largest and longest-running digital asset trading platform – to discuss digital asset and the derivative trading space. Topics covered include:

  • The background and vision of Delta;
  • What makes the derivative space important;
  • The difficulties & opportunities associated with running a derivatives trading platform.

Make sure to watch the full interviewhere.

Token Additions To Delta

Over the last two months we’veadded a number of exciting newcontracts for traders on Delta.

These additionsinclude:

  • REN Protocol(REN) – 10x Leverage
  • Kyber Network (KNC) – 5x Leverage
  • Fantom (FTM) – 5x Leverage
  • TomoChain(TOMO)– 20x Leverage
  • Aave (LEND)– 20x Leverage
  • Chainlink (LINK)– 100x Leverage
  • Tron (TRX)– 100x Leverage
  • WaZirX(WRX)– 100x Leverage
  • IOTA (IOT)– 20x Leverage

Delta remains the only altcoin derivatives platform allowing you to access a range of highly-secure markets with maximum leverage.

Get started on Delta today.

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