Yes, Virginia, the Bitcoin contango is a mystery

Lots of people are saying that massive contango in the Bitcoin futures is no surprise, because the contracts are cash settled.

For example:

“If you’re doing a cash-settled future, it’s just a bet,” said Aaron Brown, a former managing director at quant hedge fund AQR Capital Management who invests in the cryptocurrency and writes […]

Bitcoin futures

I hope I am not too immodest if I feel like my Bitcoin series has aged pretty well.

I do have a long-ish follow-up post percolating in my head, but I need some time to pull it together and research a few questions first (e.g. did anyone at the FT ever manage to make a […]

Bitcoin pieces

It has been a volatile month for the world’s most popular experimental currency:

As you can see(1), the U.S. dollar — measured in milli-bitcoins — has been highly unstable. In Felix Salmon’s words:

[The dollar] is clearly not an effective store of wealth — just look at how quickly that wealth can be evaporated. […]

What happens if a Eurozone NCB goes rogue?

I have a question.

But first, here is a good round-up from the NYT:

After a hastily convened evening meeting to assess the situation, the group of 17 finance ministers whose countries use the euro issued a statement declaring themselves “conditionally satisfied” with most of the new proposal, which the so-called troika of lenders — […]

Press release of the day

From the ECB:

The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013.

Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks.

Cyprus’s banks are […]

What happens when you refuse an offer you can’t refuse?

But seriously, if you are not following the Cyprus story, you need to start.

So, Cyprus kept delaying the vote (and extending the bank holiday). Finally, today, they voted on the measure…

…and voted “no”.

From here, things should get interesting. First, when the news broke, the Dow immediately dropped 150 points or so. Then […]

European Central Mafia

Via Ryan Avent, a little color on the background of the Cyprus “deal”:

He went back up to brief the president and Mr. Anastasiades rejected the deal, threatening to leave. At that point, around 1 a.m. a small group—including Ms. Lagarde, Mr. Rehn, Mr. Sarris, Mr. Schäuble, France’s Pierre Moscovici, Mr. Asmussen and Mr. Dijsselbloem […]

Full-court Cyprus

First, news update. Cyprus’s parliament was supposed to vote on the “confiscate insured deposits” plan on Sunday, but they have delayed the vote until Monday afternoon.

A little bit of background:

Cyprus state broadcaster CyBC reported that German Finance Minister Wolfgang Schäuble had proposed Cypriots lose 40 percent of their bank accounts

I concede this […]

Are they completely mad?

How would you feel if you woke up Saturday morning, over a long weekend, to learn that all of your FDIC-insured accounts were being reduced by 6.75% overnight?

Welcome to Cyprus.

Cyprus will impose a levy of 6.75 percent on deposits of less than 100,000 euros — the ceiling for European Union account insurance — […]

Betting market manipulation?

In an excellent comment on my previous post, a forex trader from a non-trivial firm points out that, for the past several months, there has been a systematic difference between the odds on Intrade and every other betting market in the world. As I write, the difference stands at 12%; it has actually grown since […]