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 Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights. This newsletter was produced by Parikshit Mishra. Please let us know what you think of First Mover by replying to this email. |
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The fallout from this year's stunning plunge in cryptocurrency prices continues, even as bitcoin's price appeared to stabilize just below $20,000. Bitcoin (BTC) was trading 1% up on the day, at around $19,100. The world's largest cryptocurrency by market capitalization is trading down 7% over the last 7 days and Ether (ETH) is also down by 12% over the last 7 days. Futures tracking BTC and ETH racked up nearly $200 million in liquidations as volatility on Thursday saw prices break above and back below resistance levels. The number of active crypto users among Bank of America customers slumped more than 50% to fewer than 500,000 between November and May, according to a new report from the bank. Over in Central America, El Salvador's President Nayib Bukele tweeted that the country bought 80 bitcoin at $19,000 each. Meanwhile, there was a flurry of developments among crypto firms wrecked by the market turmoil, now looking to restructure their finances or searching for a lifeline from better-capitalized peers. Celsius shareholder 'BnkToTheFuture' proposed three recovery plans yesterday aimed at helping users affected by the insolvency of the crypto lender. Crypto exchanges Blockchain.com and Deribit have said they are cooperating with ongoing investigations into Three Arrows Capital (3AC). Blockchain.com wrote in a report the hedge fund "defrauded the crypto industry." Su Zhu, the co-founder of 3AC, is looking to sell his house in Singapore bought last December for $35 million. Some analysts are comparing all of the pain to the 2008 financial crisis. Read down to Market Moves for more on that I also read an interesting in-depth thread by TaschaLabs on how the next wave of crypto adoption will come from utility tokens of real-world companies. You can read it here. |
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The wipeout of value in the latest downturn has been staggering for an industry that seemed as recently as last year to be firing on all cylinders. The current market capitalization of all cryptocurrencies is around $850 billion. In November 2021, the total market cap was nearly $3 trillion. This is a cumulative 70% drop so far since last November. The crypto market is now suffering from what some analysts are referring to as a credit crisis. This has exposed the fragile system of credit and leverage in crypto, increasingly compared to the 2008 Wall Street crash. It began with the collapse of Terra's UST stablecoin – supposed to be worth $1, good as cash. It's now becoming clear just how many centralized crypto lenders were offering unsustainable returns. Nikolaos Panigirtzoglou, cross-asset analyst at JP Morgan, wrote in a LinkedIn post Friday that it's hard to tell how much more deleveraging still needs to happen in the market. Referring to the bank's net leverage metric which is based on futures, he wrote that it suggests deleveraging is already well advanced. "Similar to the credit market deleveraging seen after the Lehman crisis, the bottom in crypto markets is likely to take place before the failure rate among crypto companies peaks," wrote Panigirtzoglou. He said there are two additional reasons to believe the current deleveraging cycle would not very protracted: "1) the fact that crypto entities with the stronger balance sheets are currently stepping in to help contain contagion and 2) VC funding an important source of capital for the crypto ecosystem continued at a healthy pace in May and June." |
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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 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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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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It’s Ugly in Crypto With $200M of Margin Calls, Founders Selling Homes and Comparisons to 2008