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Navigating Hedging and Risk Management in Crypto Derivatives! The explosive growth of cryptocurrency markets has led to the rise of various financial instruments aimed at maximizing opportunities while mitigating risks. Among these instruments, crypto derivatives have emerged as a popular way for investors and traders to gain exposure to the volatility of crypto assets without holding the underlying tokens. However, the volatility that makes cryptocurrencies attractive can also introduce significant risks. This is where hedging and risk management become crucial strategies for market participants. What Are Crypto Derivatives? Crypto derivatives are financial contracts that derive their value from an underlying cryptocurrency. The most common types include futures, options, and swaps. These contracts allow traders to speculate on the price movements of cryptocurrencies without actually owning the assets. For instance, a trader can buy a futures contract for Bitcoin (BTC), allowing them ...

BlackRock questioned the SEC's preference for the 1940 Act that oversees futures ETFs, and argued that it lacks relevancy to both crypto-spot and futures ETFs. BlackRock has argued that the U.S. Securities and Exchange Commission doesn't have any legitimate reason to treat spot-crypto and crypto-futures exchange-traded fund applications differently. BlackRock’s plan for a spot-Ether (ETH) ETF called the “iShares Ethereum Trust” was officially confirmed on Nov. 9, after Nasdaq submitted the 19b-4 application form to the SEC on the firm’s behalf. In its application, BlackRock called the SEC’s treatment of spot crypto ETFs into question, as it asserted that the agency bases its reasons for continually denying these applications on incorrect regulatory distinctions between futures and spot ETFs. “Given that the Commission has approved ETFs that offer exposure to ETH futures, which themselves are priced based on the underlying spot ETH market, the Sponsor believes that the Commiss...

LINK price pulled off a shocking double-digit rally over the past week, but exactly what is behind the move? The Chainlink’s (LINK) token surged by a substantial 61.3% from Oct. 20 to Oct. 25, reaching a peak of $11.78 and marking its highest point since May 2022. LINK price then stabilized around $10.50, prompting investors to question the sustainability of this new price level. Chainlink (LINK) token price, 12-hour, USD. Source: TradingView It's worth noting that this surge coincided with Bitcoin's (BTC) 23% gain during the same period. However, LINK's performance stands out in comparison to Ether's (ETH) 14% increase and Solana's (SOL) 28% rally, suggesting increased bullish sentiment toward Chainlink's leading oracle and decentralized computing solutions. Chainlink partnerships and integrations back the rally Several recent developments have contributed to LINK's outperformance of its peers. Notably, the announcement of Chainlink's upcoming native...

“The gravitational pull in crypto for the time being stays in BTC,” said K33 senior analyst Vetle Lunde. The relatively lackluster performance of nine new Ethereum futures exchange traded funds (ETFs) has prompted analysts at K33 Research to urge a “ rotate back” into Bitcoin (BTC).  In an Oct. 3 market report , analysts Anders Helseth and Vetle Lunde said that it’s “time to pull the brakes on ETH and rotate back into BTC,” with the initial trading volume of Ether futures ETFs only accounting for 0.2% of what the ProShares Bitcoin Strategy ETF (BITO) amassed on its first day of trading in Oct. 2021. While the analysts noted that no one expected to see initial trading volume on the Ether futures ETFs “come anywhere close” to that of the Bitcoin futures ETFs — launched amid a raging bull market — the underwhelming first-day numbers “strongly” missed expectations. Day one trading of ETH futures ETFs accounted for just 0.2% of what BTC futures ETFs amassed in 2021. Source: K33 Research...

After being initially discussed in 2021, the investment fund is now capitalizing on the meme-worthy ticker for its new leveraged Bitcoin ETF. In its latest futures-based exchange-traded fund (ETF) filing, Valkyrie Funds utilizes one of the popular memes from the financial Twitter community, known as “fintwit,” to capture attention and interest. On May 16, the investment firm submitted a new application for a Bitcoin (BTC) futures-based ETF to be listed on the Nasdaq with the ticker symbol “BTFD.“ Both of Valkyrie’s Bitcoin-centric funds do not have direct exposure to Bitcoin itself; instead, they invest in Bitcoin futures traded on the Chicago Mercantile Exchange. Bitcoin futures are financial contracts that allow investors to speculate on the future price movements of Bitcoin. These contracts obligate the buyer to purchase or the seller to sell Bitcoin at a predetermined price on a specific future date. Unlike trading Bitcoin — which involves owning and holding the digital asset its...

ETH price struggles to flip $1,700 to support, but key derivatives data show bulls making plans to break through the resistance. The price of Ether (ETH) rallied 16% between Jan. 14 and Jan. 21, peaking at $1,680 before facing a 5.4% rejection. Curiously, the same resistance level resulted in a substantial correction in late August 2022 and again in early November 2022.  Ether/USD price index, 2-day. Source: TradingView From one side, traders are relieved that Ether is trading up 35.5% year-to-date, but the repeated corrections that follow retests of the $1,680 resistance may have weakened investors ' sentiment. Negative newsflow might have limited Ether investors' appetite after troubled cryptocurrency company Digital Currency Group (DCG) faced more legal issues this week. On Jan. 23, a group of Genesis Capital creditors filed a lawsuit alleging violations of federal securities laws. In addition, the plaintiffs allege the lending firm made false and misleading statements thr...