Crypto entering the mainstream

Option plays starting to drive Bitcoin price

Remember the halcyon days of the FX market when there were sudden unexplained 100 pip moves in currency pairs? We all started to understand the power of the burgeoning options market and size of the trades that were undertaken to protect a position or a particular level. As the market became more sophisticated, knock-ins and knock-outs became de-rigueur then a whole variety of derivatives and the humble spot market was left to bear the brunt.

Well guess what? The cryptocurrency market has taken “one giantleap” and we are now seeing a similar chain of events, particularly in Bitcoin Which is still the Kleenex of cryptos. This week Bitcoin fell by 28% as well all know. The reason? Option expiries and a double no touch. I read that, so it must be true. Seriously, are we also entering another FX marketcurio; the fitting of an idea to a news story to explain the unexplainable?

The thing is that the Bitcoin market still has one immutable driver that remain unique: FOMO!

FOMO is the fear of missing out. Whether that is those long been concerned that a fall will precipitate the end or a rise heralding the new dawn of Bitcoin millionaires.

This is, believe it or not a sign of maturity in the market.

Trump too smart for his own good!

It is said that it is better to be lucky than good. That is a debatable point, particularly when it comes to Presidents of the United States Who are supposed to be on top of things at all times and rarely “shoot from the hip (or in Trump’s case, lip)”.

The two matters that have fallen his way is the seeming volte-face performed by Kim Jong-un. Does one of the most propaganda conscious leaders in the world really want to meet the other most propaganda conscious leader in the world?

When I read that sentence back, the former could be the latter and vice versa, that is how bizarre such a meeting would be.

Next Trump carried out his threat to impose tariffs on U.S.imports of steel and aluminium (or as Trump would say aluminum). He then promptly gave Mexico and Canada a free pass and basically said anyone else who wants one should simply ask. Naturally the UK immediately put its hand in the air, realizing the importance of any kind of trade deal.  

Both the North Korean situation and the imposition or otherwise of trade restrictions have reflected well on Trump which simply illustrates my point. It is better to be lucky than good and you can sometimes get things right for the wrong reasons.

Meanwhile on Brexitland

Talking of trade deals, the UK and EU seem to have reached the mother of all impasses over the question of the Irish border. I bet when Theresa May decided to cosy up to the Democratic “wiggle-room” would be potentially devastating.

Brussels won’t allow a soft border between the North and South of Ireland once the UK leaves the Single Market and Customs Union. They propose a border between the North and the rest of the UK situated somewhere in the Irish Sea.London will have none of that and rightly so since it is a marginally ludicrous suggestion.

However, to have allowed the opposition to propose a policy based upon continued membership of the Customs Union and Single Market without saying what concessions would follow reflects poorly on the government and its Ministers ability (or desire) to argue for anything other than an extremely soft Brexit, despite Mrs May’s assertions to the contrary.

The pound is in for another rough ride towards the end of the month when the EU Summit doesn’t approve a transition deal that, so far, hasn't even seen the light of day.