The latest moves in crypto markets, in context Was this newsletter forwarded to you? Sign up here. |
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Good morning, and welcome to First Mover. I'm Brad Keoun, here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is off this week.) - Price point: Bitcoin slid back below $30K, in sync with U.S. stock futures after the giant retailer Target's latest earnings report provided a fresh glimpse of consumers adjusting spending habits because of inflation.
- Market Moves: A day after the U.S. Federal Reserve chair pledged to keep tightening monetary conditions until inflation comes down, analysts and traders from crypto to stocks and futures were assessing the economic impact – from higher mortgage rates to lower company earnings, Shaurya Malwa reports.
- Feature: It's been a couple months since the $625 million Ronin Network exploit. Blockchain data show the cryptocurrency hauling moving onto Tornado, an on-chain privacy exchange that ostensibly would help to obscure the provenance.
Today's newsletter was produced by Parikshit Mishra. Please let us know what you think by replying to this email. |
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Bitcoin dipped under $30,000 in European hours on Wednesday, amid a retreat across traditional markets, as traders and analysts assessed the potential economic ramifications of U.S. Federal Reserve Chair Jerome Powell's pledge Tuesday to keep tightening pressure on financial conditions until inflation shows signs of weakening. Bitcoin's slide over the past few days is setting it up to extend a seven-week losing streak, already the longest in a trading history that dates back to the early 2010s. The cryptocurrency has suffered from a downturn in broader markets, stricter crypto regulations, waning retail interest and systemic risks in the crypto sector. Major cryptocurrencies followed bitcoin's slide in the past 24 hours. Polkadot's DOT lost as much as 6%, while avalanche (AVAX), bnb tokens (BNB), XRP, and ether lost 2.2%. Tron (TRX) was among the few in the green buoyed by positive sentiment around its ecosystem stablecoin USDD. In traditional markets, U.S. stocks were poised for declines on Wednesday based on the direction of futures trading, with weakness appearing as a disappointing earnings report from Target sent the giant retailer's shares plunging more than 22%. Inflation is forcing consumers to spend more on food and less on discretionary items, MarketWatch reported. |
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With bitcoin now regularly trading in sync with U.S. stocks, what happens in traditional markets and the bricks-and-mortar economy bleeds over to crypto. Higher interest rates tend to negatively affect company earnings who borrow money to run their businesses. With rates on consumer loans such as mortgages also on the rise, households are additionally left with lower disposable incomes, which in turn causes a ripple effect in the broader economy. While such scenarios could take months to play out, stock traders are already pricing in the anticipation of lower earnings, which leads to a drop in equity valuations. On Wednesday, for example, U.S. futures on S&P 500 dropped 0.4% while technology-heavy Nasdaq dropped 0.6%. European markets showed nominal movement as Germany's DAX rose less than 0.1% while Stoxx 600 slid 0.1%. Such market moves come after the Fed's Powell said Tuesday that the agency remained committed to reducing inflation concerns and could use "aggressive" measures to ensure a strong economy. "What we need to see is inflation coming down in a clear and convincing way and we're going to keep pushing until we see that," Powell said at a Wall Street Journal event. "Achieving price stability, restoring price stability, is an unconditional need. Something we have to do because really the economy doesn't work for workers or for businesses or for anybody without price stability." Bitcoin has traded similar to a risky technology stock in the past months, with correlations reaching almost 1:1 with the S&P 500. Some market observers suggest a further correction could take place if current market conditions continue. "Markets have been expecting the hikes for some time now and it looks like the expectations are already on the charts," said Anton Gulin, regional director at crypto exchange AAX, in a Telegram message."The movement of bitcoin and Nasdaq is rather correlated as well for a couple of months." Read More: Bitcoin, Major Cryptos Slide as Markets Digest Hawkish Powell Remarks |
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The SEC wants to hear from investors, like you. As part of Grayscale's filing to convert Grayscale Bitcoin Trust (Symbol: GBTC) to an ETF, the SEC provides a 240-day review period for anyone to submit comments for consideration.If you support the conversion, write to the SEC by clicking here. Your submission matters because: We can level the playing field. To date, the SEC has only permitted Bitcoin Futures ETFs, while rejecting "physically-backed" or Spot Bitcoin ETFs. The choice should be yours. If you've been waiting for the familiarity and protections of a Bitcoin ETF, we believe you should not be forced into a Futures-based product simply because it's the only one that exists. You can help take GBTC to the next level, conversion to an ETF. It's already the world's largest Bitcoin fund and regularly reports to the SEC on a voluntary basis as an SEC-reporting company. Learn more here. This information should not be relied upon as investment advice or a recommendation regarding any security. Visit here for important disclosures. |
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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Biggest Gainers | Asset | Ticker | Returns | DACS Sector | | Litecoin | LTC | +1.5% | Currency | Biggest Losers |
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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. |
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Nearly 5,505 ETH, or $10M of the $625M Ronin Exploit, Is on the Move |
Addresses connected to Ronin Bridge's $625 million exploit show upward of $10 million worth of ether were on the move in Asian morning hours on Wednesday, as per blockchain data. One address was funded by the Ronin exploiter this morning for 5,505 ether, with the funds coming in from another wallet that was directly funded by the main exploiter address, blockchain data shows. Starting in the wee hours on Wednesday, the address sent ether in batches of 100 to Tornado, an on-chain privacy exchange. Over 55 transactions were made, the data shows. Tornado enhances the privacy of transactions by breaking the on-chain link between a source and a destination address. This allows exploiters and hackers to mask their addresses while withdrawing illicitly gained funds. Read More: Nearly 5,505 Ether, or $10M of the $625M Ronin Exploit, Are on the Move |
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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. Travis Kling, founder and CIO, Ikigai Asset Management Camila Russo, chiefess, The Defiant
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Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price. |
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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. |
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Bitcoin Back Below $30K as Target Shortfall Shows Inflation Hitting Economy