ECB, BOE Have Scant Leeway to Influence Bitcoin

SOL Drops 12%

The latest moves in crypto markets, in context February 3, 2022 Sponsored by     If you were forwarded this newsletter and would like to receive it, sign up here.  Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: Bitcoin drops, SOL slides 12% after Wormhole cxploit Featured story: ECB, BOE have scant leeway to influence bitcoin And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. Today's show will feature guests: Sebastien Borget, co-founder & COO, The Sandbox  Ray Youssef, CEO, Paxful Michael Arbus, CEO, Bitbuy Today's newsletter was edited by Omkar Godbole and produced by Parikshit Mishra.  Market Moves By Omkar Godbole  Bitcoin traded lower, tracking weakness in stock futures linked to the tech-heavy Nasdaq index. The cryptocurrency tumbled over 4% on Wednesday after Meta, the company formerly known as Facebook, posted disastrous quarterly results. The cryptocurrency's correlation with stocks is highest since September 2020.    The Bank of England (BOE) raised official borrowing costs by 25 basis points (0.25 percentage point) to 0.5%, matching estimates. The central bank's policy statement showed four members voted for a 50 basis-point hike, signaling the potential for a faster tightening than historical standards. Officials unanimously voted to begin shrinking the balance sheet.   The European Central Bank (ECB), as expected, kept its benchmark interest rate unchanged at 0.25%. Bitcoin added about 0.75% after the decision. The central bank is under pressure to explain its view on inflation, according to FXStreet.   SOL, the native token of programmable blockchain Solana, tanked 12% following an exploit on Wormhole, a popular bridge between the Solana and Ethereum networks. Coins associated with other smart contact blockchains like Polkadot, Avalanche, Terra, Algorand also slipped 10%.    The exploit came after Bitfinex hackers moved coins on Tuesday and may have added to the fear in the market.  ECB, BOE Have Scant Leeway to Influence Bitcoin By Omkar Godbole The U.S. Federal Reserve has emerged as one of the most influential entities in the bitcoin market in the wake of the coronavirus pandemic. What's not clear are the roles of other major central banks, including the European Central Bank (ECB) and Bank of England (BOE).   According to Noelle Acheson, head of market insights at CoinDesk's sister company Genesis Global Trading, those banks' actions matter to traders holding cryptocurrencies in euros, the official currency of 19 of the 27 member states of the European Union (EU), and the British pound.   "We're so used to watching crypto in dollars; we forget that for many, performance is decided by relative movements in local currencies," Acheson told CoinDesk in a Telegram chat. "Also, many traders borrow in local currencies to trade, so higher borrowing costs will eat into their profits."   Dessislava Aubert, senior research analyst at Paris-based crypto market data provider Kaiko, said the growing monetary policy divergence between the Fed and the ECB may influence bitcoin.    "While the Fed expected to hike rates several times this year, the ECB has adopted a more sequential and slow-go approach to monetary policy tightening – explicitly ruling out a rate hike for this year. This will likely impact the U.S. currency relative to the euro," Aubert said in a WhatsApp chat.   "There is already a rate differential, with between the U.S. yields which have increased since November and German yields which are up only a little. Stronger dollar is generally bearish for equities and bitcoin with BTC moving in the opposite direction to the greenback over the past months," Aubert added.  Full story here: ECB, BOE Have Scant Leeway to Influence Bitcoin What if you could gain broad-based exposure to nearly the entire crypto market with one investment fund?*   Grayscale® Digital Large Cap Fund, symbol: GDLC, offers exposure to a diversified basket of digital currencies. The fund holds large cap names that collectively comprise 70% of the crypto market, allowing it to capture asset class growth as the industry matures.   Access Grayscale Digital Large Cap Fund by typing symbol: GDLC into your brokerage account, or learn more here.   *For information on how GDLC defines the crypto market, see disclosures in the annual report. Crypto Prices Bitcoin (BTC) See the latest price here Ether (ETH)  See the latest price here The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: Biggest Gainers: There are no gainers in CoinDesk 20 today. Biggest Losers:  Asset Ticker Returns Sector Solana SOL −12.7% Smart Contract Platform Polkadot DOT −11.1% Smart Contract Platform Algorand ALGO −10.2% Smart Contract Platform Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.  Brave Wallet is the first secure crypto wallet built natively in a web3 browser. No extensions required.   Store, manage, and grow your portfolio, get NFT & multi-chain support. Even connect other wallets and DApps. All from the security of the best privacy browser on the market.    Whether you're new to crypto, or a seasoned pro, it's time to ditch those risky extensions. It's time to switch to Brave Wallet.  Download Brave today, and click the Wallet icon to get started. Latest Headlines Nintendo President Vague on Company's Metaverse Plan GameStop Taps Immutable X for NFT Marketplace, Launches $100M Gaming Fund Electricity Consumption in Siberian Region Rises Fourfold Due to Crypto Mining Bitcoin Turns Lower From Bearish Trendline; Support at $35.5K ECB, BOE Have Scant Leeway to Influence Bitcoin Russia's Minister of Finance Suggests Letting Banks Sell Crypto: Report Long-Term Buyers Unfazed by Bitcoin's Recent Drop to $33K IRS Offers Tezos Staker Refund on Rewards Tax in Break From Current Policy Solana's SOL Tumbles 10% After $326M Wormhole Exploit Texas Crypto Miners Shuttering Operations as Winter Storm Approaches The OGs of NFTs get animated with the biggest stars from around the world in this entertaining new series from CoinDesk TV. Tune in Tuesdays in February at 4 p.m. ET. ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV: Grayscale Launches First Future of Finance ETF (GFOF), Impact of India's Crypto Tax Proposal, Sheila Warren Joins Crypto Council for Innovation as CEO "First Mover" hosts speak to Grayscale Global Head of ETF Dave LaValle as the company launches its first ETF which tracks the Bloomberg Grayscale Future of Finance Index. CoinDesk "Money ReImagined" co-host Sheila Warren shares her plan for Crypto Council for Innovation as she starts her first day as its CEO. Plus, insights into India's crypto policy change from Tanvi Ratna, founder of Policy 4.0. Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.  First Mover A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here.  Copyright © 2021 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA Manage your newsletter subscriptions  |  Unsubscribe from all CoinDesk email