PacCoin Market Commentary 12/12/2017

The past week was yet another historic week in the Crypto Currency Markets.

BTC, ETH and LTC all traded all time highs bringing the whole Crypto Sphere with them.

The total market cap is now a staggering 460 billion dollars.

Other Points worth noting in this asset class are:

The Top Five Entities have a combined value of 380 billion dollars, which is 82% of the entire crypto market.

Moving on, assets six through ten have a total value of 33 billion dollars which is just 7% of the total digital currency market cap.

In total, Currencies 1-10 are valued at 413 billion dollars and represent more than 90% of the entire cryptocurrency market value.

The current Bitcoin valuation is 281 billion dollars, here is how bitcoin would fit in among well know public US Equities

I will equate this to some firms you most likely know:

JP Morgan 366 billion
Exxon Mobil 351 billion
Bank of America 301 billion
Wells Fargo 290 billion
Walmart 287 billion
Bitcoin 281 billion
Visa 254 billion
Proctor and Gamble 229 billiion
AT&T 226 billion
Comcast 180 billion
Boeing 168 billion
Paypal 88 billion
Netflix 80 billion
Tesla 55 billion
EBAY 39 billion

 

Also worth noting is how Bitcoin compares to other notable markets

US National Debt Yearly Interest

 

216,000,000,000  (216 Billion Dollars)
Bitcoin

 

281,000,000,000  (281 Billion Dollars)
ECB Stimulus 2017

 

720,000,000,000 (720 Billion Euros)
US Treasury Debt

 

14,500,000,000,000 (14.5 Trillion dollars)
US National Debt

 

20,500,000,000,000 (20.5 Trillion dollars)
Japan National Debt 1,080,000,000,000,000 (1.08 Quadrillion Yen)

 

As I have mentioned before, those interested in PAC COIN are embedded longs in BTC and DOGE.

BTC is the market driver, and as goes Bitcoin, generally speaking so will the broader market.

In young markets, it is fairly common for a large majority of market participants will enter into the biggest names, and then look to spread capital to other names as they become more familiar.

Anyone who entered the market through Coinbase, was at one time a long in either Bitcoin, Ethereum, or LiteCoin.  Many do not even move Coins to exchanges, and simply keep assets at Coinbase.  For those who do, you know that there are more steps to enter into other currencies. In PAC, one trades Dollars for one of the three majors, then a major for DOGE, and finally DOGE for PAC.

Much of the market right now simply wants exposure to bitcoin, but this is normal, as it is what they have heard of, and what they can read about.

I come from a Wall St. background, 19 years to be exact, and have been involved in a plethora of markets including, primarily equities and commodities.

One of the most important notes for this week was initial trade in BTC futures.  I have specialized in futures and options my entire career, and never have I seen so much press about the release of a futures contract.

The CBOE futures were the first to market, but will be paled in comparison to the CME futures which open in a few days.

The futures have been delayed and the specs had to be modified many times as the price of Bitcoin rose.  BTC was approximately $1,500, when the futures proposal was made public and were initially going to be 100 coins per contract.  Which would have been a notional value of 1 thousand dollars, which is slightly higher than that of the NASDAQ, SP and Gold Futures.  As we all have seen prices have risen to such levels that a 100x multiplier on futures would make this a 1.6 million dollar contract, which would make it virtually not trade-able for the masses.

The contract is technically a future, but this is the only non-leveraged future in existence. By non-leveraged, BTC futures are simply one coin vs One Gold Contact being a 100 multiplier or the SP being a 50 multiplier.  Also of note, the exchanges and Clearing houses had to come up with a margin that they would feel comfortable with.

The BTC Futures initial margin requirements were 40%.  This is the highest I have seen on a contract during my entire career.  As a comparison, in 2011 when Silver traded $49, the notional value of the contract for $245,000 and margin went as high as 12%.

Forty percent margin requirement is simply the clearing firm allowing one 2.5x leverage.  The clearing houses and exchanges have been doing this for years in the crypto currency markets to those who are willing to post enough capital and meet certain requirements.

I attached some screenshots to illustrate the price action in many of the names I spoke about.

Best,

The One

This Post Has One Comment

  1. Bitcoin is growing and market is changing as you have said. However, the risk will be high. Trading is bad on the following principle.

    Someone have to lose in order for the other to win.

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