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. - Price Point: Bitcoin rises above $20,000, as risky assets climb on the hopes that central banks will pivot away from their money-tightening policies.
- Market Moves: Bitcoin's bullish momentum is building.
- Chart of the Day: Financial stress remains contained, weakening the case for the so-called Fed pivot.
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Bitcoin (BTC) rose 5% over the last 24 hours, reaching an important psychological level of $20,000 as global markets climbed, lifting U.S. index futures and European stocks. The move comes as investors were eyeing whether central banks will have to slow their pace of monetary tightening. Ethereum (ETH) was up on the day by 4% to around $1,350. "Investors know that the stronger the U.S. dollar, the more sell pressure on BTC," said Charles Storry, head of growth at Phuture, a crypto index platform. "Many investors feel the Fed could pivot and drop interest rates as the Bank of England just did. This would trigger a large buying opportunity for BTC, which is extremely bullish," Storry said. "Smart money is beginning to build positions already. Hence the recent price bump." he added. DeFi (decentralized-finance)tokens also rallied on Tuesday, with Chainlink's LINK up 7.5% and the token for liquid staking protocol, Lido DAO (LDO) up 9.6%. Other winners included the tokens of Quant Network, up 8%, Polygon (MATIC), up 7% and Cosmos (ATOM), up 7.4%. In the news, Grayscale Investments, which offers the world's biggest bitcoin trust, is bringing a key administrative role for all of its products in-house through a new broker-dealer unit. Grayscale Securities, the new broker-deal division, will handle selling shares of the company's crypto trust products, taking over a function previously provided by fellow Digital Currency Group subsidiary Genesis Global Trading. And Web3 data startup Golden has raised $40 million in a Series B funding round that was led by the crypto arm of noted venture-capital firm Andreessen Horowitz, according to a post on the company's website. |
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With nearly a decade-long track record of being the world's largest digital currency asset manager, Grayscale is an industry leader in offering investors secure and regulated access to crypto. Grayscale brought the world's first publicly-traded Bitcoin investment fund, GBTC, to market, and have since expanded our full product suite to 17 products total, including both single-asset funds as well as diversified funds that cover industry themes such as the metaverse, privacy, and data. Grayscale is committed to the crypto economy and our investors. This includes working closely with regulators, selecting best-in-class service providers, and collaborating with industry participants to discover and bring to market exciting new products. Learn more about Grayscale here. Investing involves risks and the possible loss of principal. |
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Bitcoin Gains Momentum on Fed Pivot Narrative, But Some Banks Anticipate Dollar Rebound |
Bitcoin rose past $20,000 during European trading hours. (CoinDesk/Highchars.com) |
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Bitcoin continues to build bullish momentum, hoping that financial stability risks and signs of economic slowdown will force the Federal Reserve to pivot away from aggressive liquidity withdrawal measures. However, some observers are unconvinced the Fed will abandon or dramatically slow the so-called liquidity tightening anytime soon and expect renewed dollar strength. The top cryptocurrency by market value reached a high of $20,150 soon before press time, registering a 2% gain for the day. The dollar index fell to a nine-day low of 11, having hit a two-decade high of 114.77 on Sept. 28. Bitcoin buyers stepped in on Monday after the U.S. Institute of Supply Management (ISM) said its manufacturing purchasing managers' index (PMI) dropped to 50.9 in September, the lowest reading since May 2020, from 52.8 in August. Notably, the index's new orders and employment measures contracted, strengthening the case for the Fed pivot. "It's been a case of 'bad news is good news' for equities, with the market treating the downside surprise to the ISM index as increasing the chances of an earlier Fed pause, seen as positive for risk assets," the Bank of New Zealand's research team wrote in clients early Tuesday. Bitcoin tends to move more or less in line with equities and has halved this year in terms of market value, with the Fed raising rates by 300 basis points. Expectations that the Fed and other major central banks would slow tightening gripped the market last week after the Bank of England (BOE) announced a bond purchase program, popularly known as quantitative easing, to ensure the orderly functioning of the government bond market. Read the full story here. |
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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 Market Index is a broad-market index of digital assets, weighted by market capitalization. A full description of the methodology is here. |
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Systemic Financial Stress Remains Contained as Market Anticipates Fed Pivot |
The FSI measures disruptions in the normal functioning of financial markets. (U.S. Office of Financial Research) |
- While the Office of Financial Research's financial stress index (FSI) has ticked higher in recent weeks, it remains well below the levels seen during the March 2020 crash and the global meltdown of 2008.
- Credit spreads, which represent the difference in borrowing costs for firms of different creditworthiness and funding measures related to how easily financial institutions can fund their activities, have barely moved.
- Borrowing costs for U.S. dollars in currency derivatives markets remain well below levels hit after Russia's invasion of Ukraine in February and the coronavirus-induced crash of March 2020.
- In other words, overall financial stress remains contained, weakening the case for the so-called Fed pivot.
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Check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9 a.m. U.S. Eastern time. |
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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 Busts Past $20K on Hopes of a Fed Pivot