Looking at regulatory filings from last week, analysts are noting the apparent plan of the New York-based Renaissance Technologies hedge fund to get into the market on cash-settled Bitcoin futures.
“Renaissance, arguably the world’s most secretive and successful money manager, did not respond to requests for comment,” writes Ian Allison April 21 at Coindesk. “Still, it’s interesting to hear how trading experts think a firm like Renaissance might approach Bitcoin as an underlying asset, given the hedge fund’s reputation for using mind-bending math to identify patterns and anomalies across a universe of assets.”
Quoting Max Boonen, the founder of digital assets trading platform B2C2, Allison suggests that Renaissance may operate some rather black-box derivatives operations where the explanation of signals is less than straightforward.
How will a new Bitcoin futures venue fare in the coronavirus world?
One cautionary indicator is the historic unveiling of Bitcoin futures markets on Bakkt, the Intercontinental Exchange’s platform that opened in November.
There, it took a full quarter for user activity to actually approach anything sanguine – the first three months saw disastrously low-volume activity.
Of course, Bakkt deals in physically delivered Bitcoin futures, which is unusual – reportedly, the Renaissance offering is going to be cash-settled futures instead, where investors get an equivalent cash payoff rather than the underlying asset.
Still, the average trader’s appetite for predicting Bitcoin’s future value is going to determine how well Renaissance does in this new market.
As always, the only thing certain is change.
In a piece called “How Black Thursday reshaped the Bitcoin futures market,” Colin Harper at Decrypt hints at major disruption, while seeming to suggest that mainly, the resulting sea change shifted a lot of Bitcoin futures activity from one exchange, Bitmex, to another, Binance.
“Binance, Coin Metrics pointed out, has benefited most from the former king’s dethroning. Its share of futures volume has increased from 11% to 24%, while it’s (sic) total open interest has grown from 4% to 9%,” Harper wrote.
Then there’s always CME Group, which has been offering a range of BTC futures for quite a while. The takeaway may be that although the winds of change may shift, this general market is here to stay.
