The last five years have been a test phase for bitcoin derivatives, which began tentatively when Bitmex eased into life in 2014. Now, as the cryptoconomy prepares to enter a new decade, derivatives products will play a pivotal role in price discovery. 2020 will be a big year for bitcoin and for the futures markets where billions of dollars will be won and lost, and the next bull market will begin.

Also read: South Korea Imposes $69M Tax Obligation on Crypto Exchange Bithumb

In 2019, crypto futures volumes approached those of spot trading. In 2020, futures are on course to blow right past spot levels and keep on trucking. The success of derivatives platforms Binance Futures and Bitmex, as well as new products from the likes of FTX, Dydx, and Synthetix, has convinced many that 2020 could be the Year of Derivatives. And U.S. regulators are lending credence to the notion: Commodities and Futures Trading Commission (CFTC), the independent regulator that governs the countrys futures and options markets, recently hinted that it could approve a new crypto-based derivative product backed by Ethereum in the course of 2020.

Out-of-the-box products serve to attract new players and new capital to the crypto derivatives market. But will the spate of novel products capture sufficient volume and play a role in shaping bitcoins price action in the coming year? And if so, who stands to benefit most?

Singapore exchange Bybit is planning to move into Thai, Turkish, Vietnamese and Spanish markets, Okexs new USDT-margined Perpetual Swap Trading is likely to gain traction, and decentralized derivatives products are expected to see broader usage as defi adoption continues. Synthetix the second largest defi app in the Ethereum ecosystem has just announced a partnership with Chainlink, meaning it no longer needs to rely on centralized price feeds for its derivatives trading mechanism.

Todays traders are now spoilt for choice, with bitcoin futures trading platforms feeding their appetite for high leverage on an array of digital assets. Traders arent limited to BTC and ETH, either: they can long or short altcoins such as cardano, enjin, tomo, and stellar if theyre feeling bold.

Improved fiat-crypto gateways such as Plutus virtual bank account and debit card have also increased the appeal of derivatives exchanges to retail investors, who are no longer locked into tether (USDT). Enhanced crypto-fiat conversion means traders can spend or reinvest their profits without needing to jump through multiple hoops. Services like Plutus enable crypto and fiat to be changed within a single app, forming the launchpad and off-ramp for traders seeking exposure to the broader cryptoconomy. Better fiat connections are often overlooked when assessing the health of derivatives markets, but these gateways are vital in driving capital in-flows.

In terms of institutional interest in bitcoin futures, the U.S., where much of the innovation is happening, will dictate matters. One platform seeking to play a major role is Bakkt, which launched bitcoin options and cash-settled futures in the U.S. at the tail-end of 2019. While the former is the first regulated bitcoin futures contract rubber-stamped by the CFTC, the latter will initially be available via the ICE Futures Singapore exchange. In December, open interest on Bakkt bitcoin futures reached an all-time high of $6.5 million and with the ascension of CEO Kelly Loeffler to the U.S. Senate, the next 12 months are shaping up to be interesting.

Bakkt isnt the only platform contributing to a market that has evolved greatly since traders first sought to profit from falling prices during the 2018 downturn. Binances bitcoin derivatives surpassed the volumes of its spot offering at various times in 2019, leading the juggernaut to invest an undisclosed sum in derivatives platform FTX. This after it had already acquired spot and derivatives exchange JEX, a move which enabled Binance to add options and futures to its platform.

Speaking of bitcoin derivatives, CME Groups Tim McCourt recently celebrated the two-year anniversary of the exchanges operations in this field. In a short article noting the markets forward curve, he revealed that CME had traded over 2.4 million contracts with a notional value exceeding $92 billion from 12.5 million BTC. Some speculate that the growing interest of trading exchanges like Bakkt and CME stems from reduced BTC volatility in comparison to previous years. In any case, the preponderance of such platforms gives derivatives traders plenty of options.

As derivatives players vie for market share, battlegrounds are coming into clearer focus. Blade, the San Francisco-based exchange supported by Silicon Valley venture capitalists, just announced its commitment to zero-fee trading a flagrant affront to perpetual swap titan Bitmex. UMAs Bitdex specification also presents a possible route to non-custodial perpetual swaps, though more work is required to develop this concept.

So what does all this surging activity mean for bitcoins price? According to Meltem Demirors, chief strategy officer of Coinshares, the growth of the crypto derivatives market means that bitcoins price is becoming less relevant which will keep it in check even after the halving. Demirors believes that bitcoins evolution into an investable asset will, in effect, decouple its price from both its value and supply and demand. With the crypto derivatives market coming to wider attention, a greater number of investors may also choose to hedge their positions via derivatives to manage price risk, leading to less volatility.

All told, the bitcoin derivatives market looks to be in rude health, even if it remains small when compared to other commodities markets. For one thing, traditional investors are likely to be enticed into crypto as a consequence of their familiarity, since derivatives are routinely used in regular financial markets. In fact, a great many institutional traders have thus far been reluctant to engage with crypto due to a paucity of tools to hedge trades and manage risk. 2020, then, and the decade it heads should bring greater leverage for crypto derivatives, including those in the defi ecosystem, greater liquidity, and greater competition from players old and new.

Do you think derivatives markets will dictate bitcoins price action in 2020? Let us know in the comments section below.

Images courtesy of Shutterstock.

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Kai's been manipulating words for a living since 2009 and bought his first bitcoin at $12. It's long gone. He's previously written whitepapers for blockchain startups and is especially interested in P2P exchanges and DNMs.

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Bitcoin's Next Decade Will Be Shaped by Derivatives - Bitcoin News

2020 is fast approaching and the last decade will be behind us. Throughout the last ten years, the biggest unicorn firms were born like Uber and Airbnb. However, even though Bitcoin isnt a company, the best investment of the decade belongs to the decentralized cryptocurrency Satoshi created. In fact, Bank of Americas recent securities report highlights that an investment of $1 in bitcoin at the start of 2010 would now be worth more than $90,000.

Also read: Regulatory Roundup New US Crypto Bill, Frances 1st Approved ICO, Muslim Crypto

This week, a great number of people are reminiscing about the last ten years and a slew of individuals understand that the advent of Bitcoin was quite significant during this period of time. The most valuable startup of the last decade didnt raise money, didnt have employees, gave away the cap table, and let anyone invest, said the popular philosopher Naval Ravikant. Besides Ravikants opinion, theres data that shows bitcoin was the best investment during the last decade.

Bank of Americas recent securities paper explains that between 2010 and 2020, oil has weakened and negative interest rates have been good for gold markets. But if a person invested $1 in bitcoin in 2010, it would be worth well over $90k today, BoAs report underlined. Because of bitcoins great performance record, the decentralized asset has surpassed every investment vehicle in the last ten years.

Now lets just say someone followed gold bug Peter Schiffs advice and invested in gold in 2010, which was trading for $1,113 per Troy ounce at the years open. Ten years later, gold has done well for itself touching a high of $1,542 per ounce and thats a fairly decent +38% gain. In the last decade bitcoin, however, has gained a whopping +8,999,900% and this year alone, BTC has outpaced golds market performance in the last ten years. In 2019, BTC has gained +96% compared to golds +10.8% increase.

Besides precious metals, if Bitcoin was a company it also outpaced investments in the most profitable unicorn businesses created in the last decade. Profitable startups throughout 2010 and 2020 include Uber, Facebook, Airbnb, Snapchat, Spacex, Tesla, and Pinterest but an investment in bitcoin surpasses all these public stocks by a long shot. For example, if you compare the +8.9 million percent BTC gain to investments in Netflix (+4,177%), Amazon (+1,787%), Apple (+966%), Microsoft (+556%), Disney (+423%) and Google (+335%), numbers show there is no comparison. The angel investor and former CTO of Coinbase, Balaji Srinivasan, recently explained his thoughts about the cryptocurrency revolution during the last decade compared to the decades unicorn firms.

As the decade ends, the biggest unicorn of the 2010s wasnt Uber, Airbnb, or Snap It was Bitcoin, Srinivasan tweeted. Please note that all three of these [companies] and many other unicorns are great companies I take nothing away from them. But to my knowledge, nothing else founded in the same timeframe held at $100 billion for a longer time. Srinivasan added:

From an investor standpoint, this is important to know.

A number of crypto proponents agree with Srinivasan and Ravikants statements about cryptocurrencies throughout the last ten years and the subject is often discussed on forums and social media. Replying to Srinivasans tweet, former Bitcoin Foundation director Bruce Fenton said:

[Bitcoin did all of this] without a centralized marketing fund, no salespeople, no roadshow people pitching sovereign wealth funds or family offices and no fundraise or premine.

Even though the digital asset was the best investment of the decade, it also provided significant innovation, financial disruption, and changed the way people perceive money. People can bypass corporations, financial institutions, and governments in a censorship-resistant fashion like never before. Its safe to say that cryptocurrency innovation will make the next ten years quite revolutionary.

What do you think about how bitcoin is the best investment in the last decade? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Image credits: Shutterstock, Twitter, Moneymorning.com, Pixabay, Fair Use, and Wiki Commons.

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Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

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Bitcoin Gained 8.9 Million Percent Over the Last Decade - Bitcoin News

For the longest time, critics ofBitcoinhave questioned if the cryptocurrency is a Ponzi-like/pyramid scheme.

Wikipedia defines a Ponzi scheme: A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.

While this is rather ambiguous, critics say that this applies to Bitcoin, for the cryptocurrency, due to the inflationary pressures of block rewards and such, requires constant capital input for prices to maintain their current levels of growth. The idea the critics that believe Bitcoin is a Ponzi tout is that without fresh capital, this market would collapse, much like a pyramid scheme would if new investors stopped entering the pyramid.

Once again, Bitcoin has been given the Ponzi scheme and scam treatment. This time, it was on a Yahoo Finance segment covering the cryptocurrency market.

Tendayi Kapfidze Lending Tree Chief Economist recently sat down with the media outlet to talk Bitcoin. While the hosts branded the cryptocurrency an investment, or at least as a speculative investment, Kapfidze said that he thinks its a Ponzi and a scam, claiming that he believes you can only make money in the cryptocurrency space by taking what others put in. Kapfidze continued that he thinks this space has yielded no technological developments or applications with inherent value.

Peter Schiff, a prominent gold proponent and anti-government investor (someone that would like Bitcoins seeming premise in another reality), has echoed this sentiment in the past. Per previous reports from this very outlet, the Bitcoin hater quipped that BTC is only popular as a speculative asset, not as a currency, before going as far as to say that as Google Trends shows, BTC is running out of new buyers to keep the Ponzi going.

Whether or not you believe Bitcoin is a Ponzi or not, its been very lucrative as a speculative asset over the years, not to mention that it is functional as a medium of exchange and as a long-term store of value.

Over the past decade, the price of the leading cryptocurrency has surged by a jaw-dropping 9,000,000%, making it the best performing asset of all time, not to mention that it saw these gains within a ten-year time span, which is relatively irrelevant on a macro basis.

Even in the past year alone, Bitcoin has surged by 95%, outpacing the stock market by triple and other top asset classes by dozens of percent. This strong performance comes in spite of the 50% downturn that has taken place since the peak of $14,000 was established in June.

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Economist Brands Bitcoin a Scam and Ponzi Scheme on Yahoo Finance - Ethereum World News

The scaling of different cryptocurrencies remains crucial. Nano, an often overlooked altcoin, is seemingly on the right track to achieve this goal.

All of these discussions need to be taken with a grain of salt.

Altcoins often tend to scale better than bitcoin, yet it doesnt necessarily help them gain traction.

Even so, Nano seems to be achieving a respectable throughput these days.

In recent days, the Nano network has seen an influx of transactions.

This is not an actual stress test, but rather someone flooding the network.

Why this action is undertaken, remains a mystery.

The results of this test are rather interesting, however.

Nano has now achieved over 1,700,000 confirmed daily transactions.

This is nearly four times as many transactions compared to bitcoin.

Rather than crumbling, it appears that this altcoins network can handle the load rather easily.

Given how big of a problem network congestion can be, Nano appears to be doing something right.

How this will impact the future use of this altcoin, is a different matter entirely.

The majority of people interested in cryptocurrency wont look past the market cap top 25.

Nanos current market cap isnt even near those levels at this time.

Image(s): Shutterstock.com

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Nano Achieves Nearly 4 Times Bitcoins Confirmed Daily Transaction Throughput - The Merkle Hash

The leaves that bud out of the stem, the pattern on the shell of snails, the petals of flowers; all of these have a common denominator, a pattern. Nature follows a particular kind of symmetry. The world that we live in has many mysteries to it, many that might seem chaotic to naked eyes. However, there seems to be a pattern emerging out of this seemingly chaotic world and the only way to look at this pattern would be to zoom out and look at the bigger picture.

Mystified by it, the Greeks and the Romans used the pattern in all of their structures. The repetition of these patterns is called fractals. Every decision we take might seem arbitrary, but we are collectively influenced by a higher power; not that of a higher being, but of nature.

Perhaps, the most apparent example is the stock market. Although people in stock markets are out to make profits, a pattern can be seen in the price charts; an inescapable pattern, be it Bitcoin, S&P500, DotCom bubble, gold rush, etc.

Despite our conscious efforts to stray away from the path, on a larger time scale, human behavior seems to converge, forming a repeating pattern. Over the course of 2019, Bitcoin has repeated itself, forming a fractal. To people who caught it, they had an opportunity to seize a good profit.

Similar patterns can still be identified in Bitcoin over different timescales. For this purpose, 2019 is split into 4 phases,

The period saw Bitcoin moving sideways. The price had just spiraled from $6,000 to $3,000, BTC was trying to recover from this massive collapse and hence, the sideways/stagnation. Moreover, this period is observed to have huge pumps and dumps in succession, especially on the 4-hour chart. These pumps and dumps can also be categorized as BART patterns.

To most, this period was the accumulation phase as the price had collapsed from a whopping $20,000 in December 2017 to a shocking $3,000. There was widespread miner capitulation, rampant FUD and fear in the community. Most altcoins and projects got obliterated to dust in this period.

In hindsight, the rise in April 2019 wasnt a mysterious concept. However, the surge in April came as a shock to most people in the community. No one could explain the sudden rise. While some attributed it to Asian markets, others stated that it was a fools rally and a bull squeeze. To everybodys surprise, the rally did not stop as it kept growing in size, exponentially, with each passing month. There was a paradigm shift during this phase as the bearish momentum flipped and became bullish.

The growth hit a ceiling on June 26, 2019, when Bitcoin reached a staggering $13,800. A 242% rise in under 86 days. Bitcoin showed everybody why it was a whole new game. Moreover, this period showed excessive growth when compared to the previous phase as the surges were much higher, easily more than 7% [highest pump/dump in the previous phase].

The excessive growth phase had no patterns forming as this was an unnatural rise in Bitcoins price. It was also a mini bull-run encapsulated within an extended bear cycle.

This periods correction lasted for 3 months and it ended with a massive drop in Bitcoins price. Bitcoin corrected by 42% in this phase as the price fell from $13,800 to $8,000. Just like the rally that preceded it, this dump was also uncontrollable. An interesting observation here is the fractal within Bitcoins bear cycle, as mentioned above.

Unlike the period of excessive growth, it was possible to do a technical analysis of Bitcoin. There were various patterns being formed in this phase, falling wedges, Bart patterns, rising wedges, etc.

As the name suggests, this period was Bitcoins journey to find the second bottom, a foothold, so to speak, for it to rally higher. Although the halving is a few months away, the price seems to be dropping, which is a complete negation of the narrative surrounding halving.

Speaking to AMBCrypto, Digitalik.net, a Bitcoin analyst, stated,

History has shown to us two times already that halving is very important event so I dont believe this time would be any different. If miners are to continue mining 50% less with same amount of hardware, electricity and manpower then this has to affect the price. The question is how big the magnitude will be but nobody can say this.

This phase consisted of multiple Bart patterns occurring in succession, rising and falling wedges, etc. At press time, the price of Bitcoin hovered below the $7,500 level, with Bitcoin dominance at 68.6%.

According to ChartsBTC, based on Bitcoin halving cycles, the price of Bitcoin is supposed to hit anywhere between $29K to $47K in 2020. With respect to the fast-approaching halving, Digitalik.net added,

I believe halving will have impact. The only question is how big.

On the adoption front, Bitcoin still has a long way to go. Although built as a decentralized peer-to-peer currency, Bitcoin is still far away from achieving this goal. Even with second-layer solutions, Bitcoin is still nowhere close to speeds [transaction finality and settlement] that the traditional financial infrastructure provides. As an example, Bitcoins tps is exponentially lower than what XRP and its blockchain can provide.

As for what the price of Bitcoin is going to be in 2020, nobody knows. As the price of BTC hovers in the $7,500 region, it could explode any minute and start its bull run, or it could sink lower, perhaps, hitting the same bottom as in December 2018. However, some people in the Bitcoin ecosystem are still bent on seeing BTC rally before the halving event, which is scheduled for March 2020.

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Bitcoin exhibited recurring patterns over 2019, similar to the ones seen in nature - AMBCrypto