The cryptocurrency markets have evolved at a rapid pace and, with the recent surge in institutional interest, that growth looks set to accelerate. Yet, as an emerging asset class underpinned by nascent technology, cryptocurrency markets remain largely inefficient and riddled with opaque practices to the detriment of investors. As cryptocurrency reaches the mainstream, the importance of integrity among participants and the need to implement best practices becomes ever more pressing.
With the cryptocurrency markets beginning 2021 in earnest, we review the regulatory approaches taken by different jurisdictions. Last month, European Central Bank (ECB) President Christine Lagarde called for Bitcoin (BTC), a "highly speculative asset," to be regulated on an international level. But, is a uniform approach possible with such different degrees of comfort toward cryptocurrencies between global regulators?
Neil Sheppard, COO of Financial Services at Diginex, and Anthony Pompliano discuss Diginex, derivatives, risk management, capital efficiency, and EQUOS.io. Learn about Neil's background, the Diginex ecosystem, derivatives, and how EQUOS benefits all traders.
As Bitcoin’s meteoric rise and subsequent volatility over the past few weeks has hit the headlines, the total crypto market cap now stands at well over $1 trillion. In collaboration with our partner, Itiviti, we look into what trends are set to shape the digital asset class in 2021.
Watch our CEO Richard Byworth and SkyBridge Capital Founder and Managing Partner Anthony Scaramucci discuss the new era of cryptocurrencies on the AIM Summit, as they delve into mainstream digital asset adoption, likely price movements, market regulation, and the role of crypto exchanges.
As we explained in the previous sections in this guide, an account is only able to send new orders as long as its Total Account Margin is higher than the Initial Margin required for all open positions and open orders. As soon as the Total Account Margin drops below the Initial Margin, the account can no longer send any new orders unless such order would reduce the existing position (e.g. a sell order, when the current position is long). To continue adding positions (e.g. add buy orders, when the current position is long), the trader will have to transfer additional funds that can be used for margin to their wallet, close open orders, or close open positions.
As we mentioned previously, perpetuals have a mechanism to ensure pricing aligns with the underlying spot product. We refer to the spread between the Spot and the Perpetual contract as Basis. The resulting exchange of payment between long and short holders of the contract is called the Basis Payment.
The massive rally in cryptocurrencies is almost unrecognizable from three years ago. When the Bitcoin (BTC) price marked its all-time high just shy of $20K in December 2017, it was exclusively retail-driven. Regulation was scant and insufficient; hacks, scams, and Ponzi schemes abounded; investors made (and lost) a lot of money overnight; and major financial institutions like JPMorgan were steadfast in calling BTC a "fraud" and a "bubble."
On EQUOS, we differentiate between the Market Price and the Mark Price of the perpetual. The Market Price is the last traded price of the product on EQUOS. The Market Price may deviate (significantly) from the rest of the market for example in case of large orders or an illiquid order book. The Mark Price gives a fairer value for the contract by taking a 3-second TWAP of the Market Price. A TWAP is the average of the open, high, low and close price for a specific period. In the case of the Mark Price these periods are three 1-second intervals. As the Mark Price is used for P&L calculation and to determine whether the position needs to be liquidated, using a TWAP to smooth out temporary spikes in prices should prevent unnecessary liquidations.