June 16, 2022

The latest moves in crypto markets, in context

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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 off.)

Price point: Dogecoin and Solana's SOL tokens lead recovery, though market pressure remains as the Federal Reserve and other major central banks move to tighten monetary conditions, Shaurya Malwa reports.
Market Moves: Blockchain analysis shows that bitcoin has fallen below a price level consistent with past historical episodes of deep bear markets, Jimmy He reports.

This newsletter was produced by Parikshit Mishra. Please let us know what you think of First Mover by replying to this email.

Price Point

By Shaurya Malwa

Tokens of dogecoin (DOGE) and solana (SOL) rose as much as 16% in the past 24 hours to lead gains among major cryptocurrencies amid a broader market recovery.

Crypto market capitalization increased some 4.5% after sliding under $1 trillion earlier this week and touching levels previously seen in early 2021. Bitcoin rebounded to the $21,000 level after a dip to just over $20,000. (The largest cryptocurrency rose on Wednesday, snapping an eight-day losing streak that was the longest since 2016; another price decline would have extended the streak to nine days and set a new record going back to the early 2010s.)

Bitcoin reversed Wednesday's decline even as U.S. Federal Reserve Chair Jerome Powell announced a 75 basis-point interest rate increase, the biggest in over 28 years. The move is part of the Fed's effort to bring down inflation. The Fed also said it will continue to reduce the size of its balance sheet at the rate announced in May.

As of press time bitcoin was up 1.5% to $21,397.

A run in bitcoin and positive sentiment in the broader market saw prices of major cryptocurrencies increase. Ether (ETH) rose 11%, Polkadot's DOT added 15%, while Cardano's ADA and XRP rose some 7%, data from CoinGecko show.

In traditional markets, U.S. stock futures were lower, as other major central banks followed the Fed's lead in tightening monetary conditions. The Bank of England raised interest rates to the highest since 2009 and the Swiss National Bank surprised investors with its first hike in 15 years.

Bitcoin (BTC)

See the latest price here

Ether (ETH)

See the latest price here

Market Moves

Bitcoin Now In Deep Bear-Market Stage, Blockchain Data Shows

By Jimmy He

Chart shows bitcoin's price (gray line) versus the on-chain realized price (orange area) and the relationship with past bear markets. (Glassnode)

Bitcoin (BTC) has entered a phase consistent with deep bear-market cycles, according to a report from Glassnode on Monday.

Bitcoin slumped below its "realized price" of $23,430 for the first time since March 2020. The realized price – represents the average price of every bitcoin, valued at the time it was last spent on the blockchain.

For most of bitcoin's recorded price history, the cryptocurrency has rarely traded below the realized price outside of deep bear markets.

Long-term bitcoin holders, who are statistically less responsive to price fluctuations and dips, are now realizing significant losses and spending coins at a higher cost basis (the price where they bought them) than short-term holders; it's a sign of capitulation.

In past market episodes, this sell-off by long-term holders preceeded a final purge of sellers accompanied by a 40% to 64% price decline.

The RTV ratio, which compares bitcoin's realized capitalization against the daily volume of coins settled on-chain, also reached its highest value since 2010. The ratio, currently above 80, means that the Bitcoin's network value is 80 times larger than the daily value of transactions settled.

This signals sparse on-chain activity and decreased network utilization, which is indicative of bear-market trends. In other words, the cryptocurrency still looks overvalued.

Some investors, primarily "whales" (those who hold more than 10,000 BTC) and "shrimps" (less than 1 BTC), bought the bitcoin dip when prices slumped into the $25,000 to $32,000 range. However, demand was not sufficient to provide stable price support as prices descended below $25,000.

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.

Crypto Prices

The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours:

Biggest Gainers

Asset	Ticker	Returns	DACS Sector
Solana	SOL	+9.3%	Smart Contract Platform
Polkadot	DOT	+5.7%	Smart Contract Platform
Dogecoin	DOGE	+5.3%	Currency

Biggest Losers

Asset	Ticker	Returns	DACS Sector
Gala	GALA	−0.8%	Entertainment
Cosmos	ATOM	−0.8%	Smart Contract Platform
Chainlink	LINK	−0.4%	Computing

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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Latest Headlines

Tron's TRX Bumps 27% as DAO Deploys $220M for Token Purchase
Founder Justin Sun said this week that the Tron DAO reserve will deploy over $2 billion to support the TRX market.
DeFi Protocol Inverse Finance Exploited for $1.2M

Attackers used a flash loan attack to drain Inverse Finance of bitcoin and tether.
Dogecoin, Solana Tokens Lead Gains Among Major Cryptocurrencies
Crypto market capitalization has increased about 4.5% in the past 24 hours after sliding earlier this week.
First Mover Asia: Celsius Risks Triggered Crypto Crash, Says Huobi Group CFO; Bitcoin Wobbles but Doesn't Break Post-Rate Hike
Huobi's Lily Zhang told CoinDesk the lending platform's problems were ill-timed following the collapse of the terraUSD stablecoin, and crypto prices could decline further; major altcoins regain ground.
In Conversation With the Federal Reserve Chief Innovation Officer
CoinDesk's Nikhilesh De spoke with Federal Reserve Chief Innovation Officer Sunayna Tuteja about the central bank's innovation team during Consensus 2022.

What to watch:

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.

Kevin O'Leary, chairman of O'Shares ETFs and 'Shark Tank' co-host
Sam Hamilton, creative director, Decentraland Foundation
Michael Bentley, CEO, Euler DAO

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.