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 holds $20,000 and altcoins retrace from yesterday's rally. Market Moves: Miners are selling their bitcoin holdings. Could this push the price down further?
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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Bitcoin (BTC) is down 5% on the day after reaching a 24-hour high of $21,500 on Tuesday. BTC hit lows of $19,900 Wednesday but has since managed to hold just above the $20,000 mark. Altcoins, which were up yesterday, have retraced. Solana (SOL) is down 10%, Avalanche's AVAX is down 8% and Polygon's MATIC is down 8%. Ethereum, the world's second largest cryptocurrency by market capitalization, is down by 5.5% over the past 24 hours, around $1,091. Laurent Kssis, head of Europe at crypto exchange-traded fund firm Hashdex, said that as the market remains turbulent, it will likely continue to oscillate within a range of $19,000-$22,000. "This comes as liquidations are still prevailing and leveraged orders are dominating," said Kssis. |
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Over the last 4hours, BTC has remained above $20,000. In traditional markets, stocks in Europe fell with U.S. futures and commodities amid warnings that the Federal Reserve's ongoing campaign to hike interest rates might lead to an economic downturn. Futures for the S&P 500 declined 1.7% Wednesday and contracts for the Nasdaq 100 contracted 2%. This comes after U.S. stocks rallied on Tuesday off their worst week since March 2020. |
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Market Moves Miners Are Dumping Their Bitcoin Holdings |
Miners have a significant influence over the price of bitcoin. In the first four months of 2022, public mining companies sold 30% of their bitcoin production. Bitcoin's recent downward price action and the deteriorating profitability of mining has forced miners to start liquidating their bitcoin holdings, according to a report by Arcane Research. Bitfarms (BITF), a Canada-based bitcoin mining company, sold almost half its bitcoin to reduce debt. BITF sold just under half its bitcoin holdings for about $62 million. The sale of 3,000 BTC cuts the miner's holdings to 3,349. Public miners only make up around 20% of bitcoin's hashrate, but studying their behavior can hint at how private miners are behaving, according to Arcane Research. |
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The miners are some of the biggest whales, holding around 800,000 BTC according to CoinMetrics, of which public miners own 46,000. "If they are forced to liquidate a considerable share of these holdings, it could contribute to pushing the bitcoin price further down," Jaran Mellerud, an analyst at Arcane, wrote in the report. "When looking at patterns from previous bull/bear markets, this type of behavior from miners is not surprising," wrote Marcus Sotiriou, Analyst at GlobalBlock, in an email. In November 2019, miners capitulated on the leg down to $3,000. "It's typical for miners to be accumulating during bull markets and selling in bear markets, as they need to cover interest payments due to being too highly levered, or they need to pay for power costs," said Sotiriou. |
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Data from Glassnode shows that it is not just Bitfarms that have been selling recently. Miners' balances have declined from the 2019-21 accumulation uptrend. |
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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 - you have until the end of June to submit your thoughts. 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 | | Shiba Inu | SHIB | +6.8% | 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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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.
- Rodrigo Vicuna, CFO, Prime Trust
- Kai Henry, chief strategy officer, FaZe Clan
- Julien Holguin, CEO, Doodles
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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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