The latest moves in crypto markets, in context Was this newsletter forwarded to you? Sign up here. | | | Good morning, and welcome to First Mover. I'm Bradley Keoun, here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is off.) -
Price point: Bitcoin was fluctuating around $29,700 after a report showing U.S. jobs growth slowed in May. -
Market Moves: Crypto winter might really have actually, genuinely, truly now arrived. This newsletter was produced by Parikshit Mishra. Let us know what you think of First Mover by replying to this email. | | | Bitcoin (BTC) was struggling to find direction Friday after a U.S. government report showed that the pace of jobs growth slowed in May – potentially a sign that the Federal Reserve's recent moves to cool the economy might be starting to have an impact. As of press time the largest cryptocurrency was changing hands around $29,500, down 1.7% over the past 24 hours. Crypto traders and analysts have been monitoring the Fed's actions because many see the U.S. central bank's $4 trillion-plus of money-printing over the past couple years as having stimulated prices for risky assets. Now that the Fed (and President Joe Biden) are pledging to tamp down inflation at its fastest in four decades, prices for bitcoin and stocks have come under severe downward pressure. In traditional markets, European indexes were mixed and U.S. stock futures were lower on Friday. Gold was down 0.5% to $1,860 an ounce. According to the U.S. Bureau of Labor Statistics, employers added 390,000 jobs in May – a modest slowdown from April's 436,000 gain, but beating economists expectations of 325,000. According to MarketWatch, gold prices were lower after the report that job growth was faster than expected. Analysts say gold will struggle as long as the U.S. dollar is strong in foreign-exchange markets, which is theoretically the case when the Fed is raising interest rates. | | | Crypto winter might have arrived As bitcoin's price has steadily ticked down – the largest cryptocurrency just completed a record nine-week losing streak – analysts in digital-asset markets have wondered whether a "crypto winter" has arrived. The term harks back to the 2018 cold spell when bitcoin's price fell 73% that year alone, accompanied by a crash in prices for tokens recently minted at the top of the market through "initial coin offerings" or ICOs. Cryptocurrency companies slashed jobs, bitcoin miners mothballed new projects and the breathless headlines vanished from the mainstream press. After this year's 35% price plunge (so far), signs are now emerging that it might again be time to hunker down. Recent cost-cutting measures by the Coinbase and Gemini exchanges show how seriously industry heavyweights are taking this pullback. Riot Blockchain, one of the largest publicly traded bitcoin miners, unloaded more than half the bitcoin it mined in May, CoinDesk's Aoyon Ashraf reported Thursday. As the price of bitcoin falls, more miners are powering off or selling their holdings to fund operating budgets; high energy prices are squeezing profits from the cost side. "The impact has been felt across the space. Nothing has been spared from this drawdown," QCP Capital, a trading firm, wrote Friday in a note to subscribers on Telegram. QCP ran the math on some of the key comparisons between the current market and 2018. Below are some of the key highlights. Brace yourself. - "For BTC and ETH, if we match the 2017 drawdowns of 85% and 95% respectively, we will be looking at levels of $10,000 for BTC and 250 for ETH."
- "While we think this is unlikely, the deep negative skew in the vol markets is reflecting some fear of this happening."
- "In 2017, it took roughly 1 year to find the bottom for BTC and ETH. We are potentially still some time away from the absolute bottom."
According to QCP, a big driver of the pullback has been the withdrawal of stimulus liquidity from the Federal Reserve and other central banks. Some of the riskiest tokens might have been the biggest beneficiaries of the money-printing-fueled central-bank balance-sheet expansions. "DeFi and meme coins have had the largest drawdowns," QCP wrote. "When the easy money dries up, coins with poorest utility and highest multiples suffer the most." When does the cycle turn? In the topsy-turvy logic of financial markets, where the Federal Reserve serves as both a countervailing economic force and the 800-pound gorilla, that might happen when the data start to look really ugly. "We are now therefore entering into a 'bad news is good news' phase with regard to growth and employment data," QCP wrote. "The market would trade positive on negative news as that would reduce Fed hawkishness." | | | 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. | | | The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: | | | Biggest Gainers Biggest Losers | | | 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. | | | We're Cross River Crypto. We partner with today's most innovative crypto companies to offer banking solutions, including fiat on/off ramps. Whether you are building a crypto exchange, an NFT marketplace, or metaverse, Cross River provides an API-based all-in-one platform that enables: - Banking-as-a-Service
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Building the next big thing in crypto? Request your fiat on/off ramp solution now. | | | We're Cross River Crypto. We partner with today's most innovative crypto companies to offer banking solutions, including fiat on/off ramps. Whether you are building a crypto exchange, an NFT marketplace, or metaverse, Cross River provides an API-based all-in-one platform that enables: - Banking-as-a-Service
- ACH & Wire transfers
- Push-to-Card Disbursements
- Real-Time Payments
- Virtual Accounts & Subledgers
Building the next big thing in crypto? Request your fiat on/off ramp solution now. | | | 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. - Moish Peltz, NFT and web 3 attorney, Falcon Rappaport & Berkman
- David Gerard, Author of "Attack of the 50 Foot Blockchain"
- Ali Pourdad, CEO, Quantfury
| | | 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. | | | 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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