As a researcher with a background in finance and a keen interest in the dynamic world of cryptocurrencies, I find myself increasingly intrigued by the strategic moves of Wall Street banks. The recent surge in Bitcoin prices post-election has been nothing short of fascinating, with big banks reportedly amassing significant positions through futures contracts.
As a researcher, I’ve found that some Wall Street banks have accumulated approximately $1.4 billion in post-election profits, given the surge in Bitcoin prices, as per Forbes’ estimations.
Major financial institutions allegedly increased their Bitcoin (BTC) futures investments in the lead-up to the presidential election, accumulating a combined total of approximately 52,820 BTC through 10,564 new contracts, according to information from the Commodity Futures Trading Commission (CFTC), which was released on November 5.
Bitcoins futures contracts are a type of financial product that lets traders bet on the possible increase or decrease in Bitcoin’s future value, without physically owning it. Although U.S banks typically cannot possess Bitcoin themselves, they can gain exposure to its price movements via derivatives and exchange-traded funds (ETFs).
Banks’ open interest jumped by $3.5 billion between Oct. 8 – 15 from 1,200 BTC futures contracts (worth $373 million) to 11,766 contracts (worth $3,8 million). The held position is estimated to be worth around $5.3 billion at BTC current prices, giving banks gains of nearly 36% in less than a month. Some financial institutions operating on crypto derivatives markets include JPMorgan, Goldman Sachs, and SG Americas Securities.
The significant increase in Bitcoin‘s value can be largely linked to the re-election of Donald Trump on November 6th, as it is believed that the crypto markets expect a more collaborative stance from federal agencies under the new administration, potentially leading to less regulatory pressure and fostering growth in the cryptocurrency sector.
In recent days, stocks from publicly listed cryptocurrency companies have experienced significant growth. Specifically, on November 11th, Coinbase’s shares (COIN) surged beyond 20%, hitting a new high of $300 – the first time this mark was reached since early 2021.
Based on statistics from CoinGecko, the total value of all cryptocurrencies stood at an impressive $3.17 trillion on November 13. This represents a significant increase of approximately 119% compared to the same time last year.
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2024-11-13 22:03