It seems like years ago now when I wrote a seed check to Bitnomial. As a matter of fact, it was years ago. Luke had a vision and frankly, if you are going to do it the right way and not do it like FTX or Binance, you need a lot of time and runway to execute that vision.
Luke put people around him that were industry veterans. He didn’t cobble together something at a hackathon or find a few people and put a refrigerator full of Red Bull to stimulate their activity.
Instead of taking the easy way, Bitnomial did it the hard way. But, the hard way was the right way, and it is starting to pay dividends in the form of growth. I read this article in Futures and Options Weekly (FOW). It’s targeted toward institutions who pay for it so you might have to sign up for a two-week trial to read the whole thing.
Crypto is still in the early innings of the game. I don’t think anything has been built of note yet. There is still fraud. Venture funding has dried up for the most part. But, there are smoke signals out there that give you indications that it’s not dead.
It is hard to build a good exchange. In my opinion, you need people that are really well-versed in the way exchanges work to build them. I think that a lot of investors look at sites like eBay, think it is an exchange and so investing is just like that. It’s not if it’s a true exchange.
A few things really stood out to me from the article.
The venue has since hit new records in both volume and open interest as they successfully tap this vein of demand. Volume reached a high for the first half of the year of the equivalent of $2.7 million (£2.1m) on the week of June 19, and in that week also saw an open interest high of 1.8 million in the same week. Average weekly volume is 90% higher than launch, and it has seen over $50 million in volume since launch, according to figures provided by the exchange.
Overall, the crypto spot and derivatives treading volume on centralised exchanges fell 12% in July to $2.36 trillion, the lowest month this year according to a report published by research firm CCData. Of that total, derivatives volumes fell 13% to $1.85 trillion, the second lowest volume the firm has recorded since December 2020.
Bitnomial is growing in a contracting market.
This is super interesting as well.
“In our markets we have also seen contracts go to physical delivery in a lot more cases than you typically see in other futures markets – it can peak at around 20% of the open interest,” Luke Hoersten said in an interview. “Part of the reason is that with the regulatory crackdowns in the US and globally, there are very few places where you can actually get that underlying crypto exposure at the end of the contract, especially on a leveraged basis.”
In futures markets that are physically delivered, you rarely see a lot of deliveries as a percentage of open interest. When that first notice day rolls around, positions get rolled or extinguished.
Bitnomial is doing things right. Gary Gensler at the SEC is doing all he can to kill crypto. They will be a force to be reckoned with if cryptocurrency stays around.