RBC Considering Its Own Crypto Exchange

The Royal Bank of Canada (RBC), a bank that prohibited its clients from buying Bitcoin and other cryptocurrencies last year, is now considering the creation of its own cryptocurrency exchange.

By market capitalization, RBC is the largest bank in Canada, making their consideration of a crypto exchange pretty groundbreaking. The exchange would feature online purchases and investments and also include brick and mortar locations for people to purchase crypto assets. 

This move greatly contrasts their current sentiment towards Bitcoin and other cryptocurrencies. Last year RBC stopped allowing the purchase of any cryptocurrencies by their clients using credit cards.

In a message sent to clients RBC said, “Effective immediately, RBC will no longer be allowing the use of RBC credit cards for transactions involving cryptocurrency. We regret any inconvenience this may cause.” 

Other banks have gone in similar directions. Both TD Bank (TD) and the Bank of Montreal (BMO) banned cryptocurrency purchases by their clients. While these other institutions have halted the option for their clients to buy and invest in crypto, RBC’s shifting sentiment hints at a more pro-crypto future. An investment into the creation of a cryptocurrency exchange from RBC may generate the interest of other institutions looking to maintain competition.  

CME to Launch Bitcoin Options

The CME derivatives exchange has announced that it will be offering options on its bitcoin futures contracts starting January 13th, 2020. 

The CME group first gave details about the coming options offer in October and said that each contract would be based on one Bitcoin futures contract containing 5 Bitcoins. These contracts will be quoted in U.S. dollars and will be available between 5:00 P.M. Central time on Sundays and 4:00 P.M. Central time on Fridays. 

The exchange’s global head of equity index and alternative investment products, Tim McCourt, said:

“Since the launch of our Bitcoin futures nearly two years ago, clients have expressed a growing interest in options as another way to hedge and trade in these markets. We have worked closely with clients and the industry to establish a robust and increasingly liquid underlying futures market here at CME Group, and we believe Bitcoin options will now offer our customers greater precision and flexibility to manage their risk.”

In their announcement, CME shed light on how well the futures have performed. The platform currently has 3,500+ individual accounts trading and has an average daily volume of 6,500+ contracts in 2019, equivalent to about 32,500 bitcoin with 47% of its volume coming from outside the United States. 

CME’s success with Bitcoin futures and the demand that their clients have for options and other features can be a good sign for other players like the Bitcoin futures exchange, Bakkt. While Bakkt is newer and has seen low but steadily increasing volume, they are looking to launch options on its Bitcoin Futures on December 9th, 2019. CME’s steady volume and Bakkt’s increasing use are a positive sign for the future institutional use and trading of Bitcoin. 

The Race Towards a Blockchain Future

China’s state-run newspaper published a front-page story that features Bitcoin as the first truly successful application of blockchain technology. 

The article shows the continuing shift in China’s stance on blockchain and cryptocurrency since China’s leader, Xi Jinping, initially announced that China would begin to invest and push the development of blockchain and its applications in various industries in late October. 

The article detailed Bitcoin’s underlying blockchain technology and described its inner workings as “one of the hottest topics in recent years.”

In 2017 Beijing banned cryptocurrency exchanges in an attempt to prevent citizens from purchasing crypto with the Chinese yuan. Now, China is looking to create its own digital currency that will be created by its central bank. This tremendous shift from a negative view of blockchain and cryptocurrency to one that is positive shows that China may be looking to beat the rest of the world in a race toward a future with blockchain.

China is not the only country to hop on this trend. The European Union is also trying to figure out the best way to handle cryptocurrencies. The European central bank recommended that the EU develop ways to approach and regulate all cryptocurrencies, including permissionless and decentralized ones like Bitcoin, and also state-backed digital assets similar to what China is in the midst of creating. 

With companies like Facebook (FB) and nations like China pushing full steam ahead with currencies of their own, it begins to put pressure on other nations. If Facebook’s Libra or China’s yet-to-come digital currency were to become widely adopted it could threaten other nation’s monetary systems. 

France’s economic finance minister, Bruno Le Maire, wrote in an op-ed that Libra was “unacceptable” and that “the monetary sovereignty of states is underpinned by their citizen’s freedom of choice.” Le Maire added that “we cannot let China be the only player in this field.” 

ROI From the Beginning

ROI from the beginning

There is a ton going on in the blockchain development space right now, but it can be important to look back at how Bitcoin has fared since the beginning to get a larger perspective. Since Bitcoin first started trading on Bitstamp at the price of $8 its value has increased over 108,000%. With Bitcoin's price history being extremely volatile, it's impossible to say if it will retain this value.

Year-to-Date Returns

  • Bitcoin's YTD return is now 126.17%. This is a drop of 14.43% from last week's YTD return of 140.6%.
  • Bitcoin Cash now has a YTD return of 68.42%. This is a 9.58% drop from last week's return of 78%.
  • XRP's YTD return is -26.65%. This is a 6.25% drop from last weeks -20.4% YTD performance.
  • Ethereum's YTD is 31.91%, a slight drop from last weeks 33%.

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