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 Bradley Keoun, here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is on assignment.) - Price Point: Bitcoin is up 3.3% on the day, roughly back to the level it was early Wednesday before the Fed announced it will raise its benchmark rate by 0.75 percentage point.
- Market Moves: The XRP token has rallied sharply this month on the anticipation of a resolution of an SEC lawsuit against Ripple, XRP's issuer.
- Chart of the Day: The U.S. Treasury yield curve is now at its most inverted point in four decades.
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Bitcoin (BTC) was up 3.3% Thursday at around $19,100 – roughly back to where it was early Wednesday before a wild 24 hours of price swings that spanned the Federal Reserve's latest announcement that it will continue its campaign of aggressive interest rate hikes. The Fed's rate moves have been pushing up the dollar's value in foreign-exchange markets, and now cracks are starting to appear: Japan announced its first currency intervention in more than two decades to shore up the yen. Meanwhile, Switzerland, Norway and the U.K. all raised borrowing costs in the wake of the Fed's decision. Tighter monetary policy, in general, is seen as a negative factor for prices of risky assets like bitcoin. But it's possible that the dire scenario is already priced into the market. "Even if central banks tighten monetary policy further, the situation will not worsen more, for the current performance of crypto assets is terrible enough," Griffin Ardern, volatility trader from crypto asset management firm Blofin, told CoinDesk's Omkar Godbole. Ether (ETH), the second-largest cryptocurrency, was gaining along with bitcoin, up 4.5% on the day to about $1,300. The broad CoinDesk Market Index was higher, led by Algorand's ALGO with a 12% gain over the past 24 hours. In the news, community members of the crypto-powered wireless project Helium voted to ditch their own blockchain and instead move operations onto the Solana blockchain under a plan to save resources. The crypto exchange FTX, led by billionaire Sam Bankman-Fried, is reportedly in discussions to raise up to $1 billion in capital at a $32 billion valuation. |
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As XRP Rallies, Some Traders Buy Year-End Bullish Bets in the Options Market |
Payments-focused cryptocurrency XRP has rallied sharply this month, outshining larger cryptocurrencies. Some traders are snapping up bullish bets in the options market in hopes of continued gains into the year end. The cryptocurrency, ranked fifth by market value, traded at 42.6 cents at press time, a 28% gain for the month, according to CoinDesk data. Market leaders bitcoin and ether were down 4.5% and 17%, respectively. "We have seen interest in buying XRP year end upside call options in anticipation of a resolution in the ongoing lawsuit with the U.S. Securities and Exchange Commission," Dick Lo, the founder and CEO of Hong Kong-based quant trading firm and liquidity provider TDX Strategies, said. A call is a derivative contract giving the purchaser the right but not the obligation to buy the underlying asset – in this case, XRP – at a predetermined price on or before specific expiry date. A call, therefore, is preferred by bullish speculation, while a put option represents a bearish bet. Read the full story here. |
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U.S. Yield Curve is Collapsing |
This chart shows a relentless inversion of the U.S. Treasury yield curve. (Source: TradingView) |
The U.S. Treasury yield curve is now at its most inverted point in four decades, with the spread between yields on the 10 and two-year Treasury notes sliding to -0.52%. - "The yield curve screams economic slowdown but also validates Powell's hawkish credentials," Ilan Solot, a partner at Tagus Capital, wrote in the daily market update, referring to Federal Reserve Chairman Jerome Powell.
- The relentless curve inversion could only add to the dollar's ongoing bullish momentum and make matters difficult for risk assets, including cryptocurrencies.
- The 90-day correlation coefficient between the dollar index and the yield curve was -0.8 at press time, indicating a strong inverse relationship between the two.
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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 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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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. - Matt Weller, global head of research, Forex.com
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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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