Shorts Push Bitcoin Below $60,000 | From Square To Block

OMICRON FUELS BITCOIN SHORTING

The impact of the new Covid-19 variant is slowing the upside of bitcoin, which remains bound below $60,000, but shrewd retail traders at the CME have found a way to place profitable bitcoin bets worth a total of $500 million. The latest Commitments of Traders (COT) report issued Monday night by the Commodity Futures Trading Commission (CFTC) revealed a three-fold increase in the number of short bitcoin futures contracts held by retail investors compared to the previous week. Forbes’ director of data and analytics, Javier Paz, notes that the shift follows a temporary but equally sharp bullish bitcoin move in the second half of October. Together, these moves suggest that wealthy retail investors (those able to purchase the typical $300,000 CME bitcoin futures contract) may be starting to place short-term speculative bets in tandem to profit from movements in the volatile cryptocurrency market.

Source: Messari. Prices as of 4:00 p.m. on December 3, 2021.

SQUARE’S 3D MAKEOVER

On Monday, Jack Dorsey stepped down as the CEO of Twitter, citing his belief that the company was “ready to move on from its founders.” Many thought the move would lead him to devote more energy to Square, the payments company he also founded and helms, and its budding cryptocurrency business. Only two days later, Jack delivered. On Wednesday, Square said it would be changing its corporate name to Block, effective December 10 (its NYSE ticker symbol, “SQ,” would remain the same as well as the name of the company's merchant payment processing platform, also called Square). The rebrand is largely seen as a nod to blockchain and a signal of the company’s potential further foray into cryptocurrencies. Square is one of the largest corporate holders of bitcoin, with more than $450 million worth of the cryptocurrency in its treasury; its CashApp business allows users to buy and sell bitcoin, and in August, it launched a new division for building a cryptocurrency exchange. As of Friday morning, Square’s stock is down 11% since the announcement.

‘THE AWS OF CRYPTO’

For all the accolades received by Coinbase for not only being the first major crypto firm to go public, but also for doing so via the largest direct listing in history, its revenue base is overly reliant on transaction fees (+90%). For the crypto giant, or any other exchange, such dependence can be a major vulnerability because trading volumes are highly correlated with market volatility. Now, Coinbase aims to address this issue with the new infrastructure product, Coinbase Cloud. Chief Product Officer Surojit Chatterjee told Forbes the goal is “to be the AWS of crypto.” But the tale is not new. Freshly minted crypto unicorn Alchemy, which already supports virtually the entire NFT industry, aims to do just the same. All that is to say, competition for the title is only heating up.

ELSEWHERE

Facebook Retreats From Crypto Ad Ban [CNBC]

Crypto Executives To Face House Lawmakers At Dec. 8 Hearing [Bloomberg]

Facebook’s Top Crypto Executive David Marcus Is Leaving The Company [TechCrunch] 

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

Nina Bambysheva
Reporter
Forbes Money & Markets

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