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Bitcoin Futures Shows Contrasting Positions Between HF and Ins Investors

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Bitcoin Futures contract has at this time revealed a differing behavior between Hedge Funds and Institutional Investors in a scenario that seems to stir market analysts amusements.

Per the data published by the Chicago Mercantile Exchange (CME), Institutional investors are embracing the Long Bitcoin Futures contract while the Hedge Funds are diversely going Short.

The CME data shows that the Bitcoin Futures long contract held by institutions is currently at its all-time high. This position gives an inclination that the Institutional investors have a more bullish expectation on the price of Bitcoin (BTC) in the long term and the continuous investment in the premier digital asset largely indicates the practical backing of this bullish expectation. Conversely, the short positions being backed by Hedge Funds has been explained in different ways by analysts in the space.

Hedge Funds are known to generate revenue for their clients through different means including a bet on crypto derivatives without the fear of risks. The short position by the Hedge Funds has also been seen as a means to provide liquidity to Institutional investors entering long bitcoin futures contracts on exchanges.

Bitcoin Futures and Institutional Investment Rise Correlates

We have seen a surging interest amongst institutional investors in recent times as many continue to show backing for bitcoin (BTC) over other digital currencies. Coinspeaker reported earlier that MicroStrategy Incorporated (NASDAQ: MSTR) remains one of the publicly listed firms to pump its excess liquidity into Bitcoin. The billion-dollar software firm noted that it would be investing an excess of $250 million in bitcoin and other assets in the next two months following the current inflationary uncertainties plaguing the U.S. Dollar.

“We will seek to invest up to another $250 million over the next 12 months in one or more alternative investments or assets which may include stocks, bonds, commodities such as gold, digital assets such as Bitcoin, or other asset types,” MicroStrategy President Michael J. Saylor said in a statement and as seen by the Motley Fool.

Additionally, San Francisco-based financial services and mobile payment company Square Inc (NYSE: SQ) also pumped about $50 million to buy 4,709 Bitcoin (BTC) earlier this month. The total amount of cash invested by the firm represents about 1% of its total assets as of the end of Q2 2020. Grayscale CEO Gary Silbert also affirmed this when he noted that the firm’s Assets Under Management (AUM) has hit its recent all-time high of $6.4 billion showing a healthy plunge into the bitcoin investment space by institutional investors.

The cryptosphere has seen a continued increase in the show of support for bitcoin by Institutional investors and it suffices to say that the moves may have a profound effect in spiking the price of bitcoin in the near and long term.

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.





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ContextLogic (WISH) Stock Price Still Low, Has 50% Upside

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In the recent past, ContextLogic (WISH) stock has been referred to by market watchers and analysts as the next short-squeeze target.

ContextLogic Inc (NASDAQ: WISH) is the company that’s linked with Wish Mobile, a popular shopping app. The good thing is that the company is not only meme-based but it also addresses emerging and current needs of the e-commerce market. The company confesses that performance, particularly logistics revenue, has been growing impressively. The revenue growth has been increasing gradually but the stock, with a target price of $20, is definitely a buy.

WISH: Just a Meme Stock?

In the recent past, ContextLogic (WISH) stock has been referred to by market watchers and analysts in WallStreetBets Forum as the next short-squeeze target. Two other meme-based stocks, GameStop Corp (NYSE: GME)and AMC Entertainment Holdings Inc (NYSE: AMC) have also done well and become popular on the forum. However, analysts suggest that caution should be observed when dealing with WISH as it may turn out to be another short target. For its total outstanding shares, WISH’s interest ratio, which is a bit low, currently stands at 4%.

ContextLogic became a public-listed company in 2020 with the price of its stock valued at $24 each. However, the initial public offer (IPO) didn’t perform as expected leaving investors disappointed. When the stock started trading, the opening price was $22.75 and even went as high as 32.85 but then started trading low and lower in the following months. The lowest WISH traded was $7.52 before it started drawing attention from WallStreetBets. ContextLogic executives however believe that the company has a lot to offer other than the WallStreetBets mentions and attention.

Client Acquisition and Retention

Being an E-commerce portal, ContextLogic has gained from the pandemic situation. In FY 2020, WISH’s sales increased by 34%. Another 75% sales increase was gained in the first quarter of 2021. The increased downloads of the WISH shopping app were the cause of the improved revenue. Currently, the app has 100 M and above active users each month in over 100 countries.

In 2020 alone, ContextLogic bagged an extra 17M users, and the trend has been growing since. With the discovery and a discount-based experience, WISH is sure to retain its customers for a long time to come. Additionally, the shopping experience is further boosted by the gaming elements that have been embedded on the platform. According to WISH’s market research team, 70% of the company’s sales are impulsive and do not at all involve any search query. Also, 90% of the company’s sales are done via the WISH app.

In this digital age, most people do their shopping online and via mobile applications. From 2019 to 2024, the e-commerce market (global) was expected to increase from $3.4 trillion to $6.3T, and most of the transactions were to be done via mobile apps. This was believed to be possible because most online shopping platforms integrate AI into their businesses, making the shopping experience process safe and secure.

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Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.



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Hedgeye Analyst Develops Model Validating S2F with $1M Bitcoin Price Target

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Besides this predictive Bitcoin tool, Hedgeye also has a quantitative Bitcoin dashboard called the “Bitcoin Trend Tracker.”

Hedgeye analyst Josh Steiner has developed a model in which he drew on the fundamental analysis of the Stock-to-Flow model of Bitcoin (BTC) in comparison with other factors, to project a $1 million price for Bitcoin before the end of this decade. Hedgeye Risk Management is an investment research and financial media company based in Stamford, Connecticut, and specializes in market analytics through the quantitative study of industries in which they operate.

The Steiner developed fundamental analytics model focuses on Bitcoin, the world’s first and largest digital currency by market capitalization. In the past decade, BTC has toppled its own records and attained over $1.2 trillion valuations back in April when it hit an all-time high price above $64,000. While unfavorable market conditions – including harsh regulations and energy consumption FUD – have dragged the prices down, investors are still looking for avenues to get in on the train. Hedgeye gives the quantitative basis that can help all classes of investors make the right investment push, and mitigate risks.

The Hedgeye Analysis Prediction $1M Price for Bitcoin Per the S2F Model

The Stock-to-Flow model factors in the rate at which an asset is released into the market against its existing supply. When the United States real estate niche is considered based on this model, the S2F ratio is pegged at 93x. The total supply of new housing units is about 1.5 million units annually, against a total of 140 million.

Gold has an S2F ratio of approximately 72x as roughly 2.75 tonnes are mined annually against 200k tonnes in current circulation. When Bitcoin is put into perspective, the current S2F ratio is pegged at 54x atop 344,000 mined coins annually, against an 18.6 million total supply. Unlike real estate and gold which has an almost static S2F for many years now, Bitcoin’s S2F model is expected to grow over time.

Drawing on the 4-year halving event, Bitcoin’s S2F ratio is expected to increase 10-fold every 12 years. This will bring the Stock-to-Flow model to 1000x by 2036, and to 10,000x by 2048. This exponential increase is poised to impact the price of the asset in a corresponding manner. Steiner developed the publicly accessible power regression relationship y=1.3268×2.4769, a quantitative relationship that predicts Bitcoin’s price in relation to the S2F model.

“Every 10-fold increase in Bitcoin’s Stock-to-Flow ratio, which will happen every ~12 years going forward, has produced a ~1,000-fold increase in Bitcoin’s price. And that hasn’t happened once, but twice,” according to a description of the effect of the relationship.

Based on this projection, Bitcoin is on track to attain a price of $1 million by 2030, $10 million by 2039, and by $100 million by 2057.

Other Hedgeye Products

Besides this predictive Bitcoin tool, Hedgeye also has a quantitative Bitcoin dashboard called the “Bitcoin Trend Tracker.” This tracker provides exhaustive, daily quantitative analytics on a range of cryptocurrencies and Exchange Traded Funds. This tool is useful for both retail and institutional investors. The dashboard breaks down the price, volume, and volatility among several other metrics of each asset it tracks.

This and more tools brandished by the Hedgeye team seek to give investors a similar resource available to traditional market players, all for an informed and productive investment engagement.

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.



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Founders of Africa’s Crypto Investment Firm Flee to UK with 69,000 Bitcoins Worth $3.6B

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Since both the founders have gone missing and are not returning any calls, the investors have involved Hanekom Attorneys, the South-Africa-based law firm, to manage the chaos.

Two brothers and founders of Africa’s crypto investment firm AfriCrypt have gone missing following an alleged hack that jeopardized their clients’ accounts and wallets. 20-year old Ameer Cajee and 17-year-old Raees Cajeee have reportedly shifted the collective investor fund from an account at Johannesburg-based First National Bank (FNB) before retreating to the United Kingdom.

Africrypt, a currency exchange service founded in Johannesburg, South Africa, has gone on to become one of Africa’s largest and most successful AI trading companies in only a few years. It was established in 2016, by the child prodigy Raees Cajee. Ever since its commencement, the firm has seen an astronomical growth connecting banks, payment providers, and digital asset exchanges.

In April, the investors of Africa’s crypto firm Africrypt were mailed about the alleged ‘hack’ that had put the customers’ crypto-assets in a compromising situation. To handle the unpleasant circumstances, the platform was set to shut down, following the freezing of all the accounts. The sponsors were requested not to report the same to authorities, claiming that this might ‘delay the process of retrieval’.

Since both the founders have gone missing in action and are not returning any calls, the investors have involved Hanekom Attorneys, the South-Africa-based law firm to manage the chaos. According to the law firm, the financial reserve was placed through an array of tumblers and mixers, making it effectively untraceable. Since almost 69,000 bitcoins worth $3.6Bn have gone missing, the attorneys have cautioned several international exchanges about the reported scam, to watch out for any Bitcoins being converted.

Making matters worse is the fact that South Africa’s Finance Sector Conduct Authority cannot initiate a legal inquiry since cryptocurrency has not lawfully been regarded as a financial product in the country. If the money is not reclaimed, this incident will go down as the greatest cryptocurrency scam in history.

The event reminds us of Canada’s QuadrigaCX exchange case of 2018 when Gerald Cotten, the founder of Quadriga Fintech Solutions died on a trip to India. Since Cotten held the password to customers’ offline cold wallets, the company lost around $250 million owed to its 115,000 customers. The company was declared bankrupt in 2019, ceasing all the operations immediately. This event, however, will effortlessly eclipse the money lost in the Canadian exchange.

A different class of sponsors/investors have started liquidation activities against Africrypt.  The purported theft has also been communicated to the Hawks, South Africa’s Directorate for Priority Crime Investigation (DPCI). This special division exclusively targets organized crime, economic crime, and corruption.

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