Aug 25, 2022

The latest moves in crypto markets, in context

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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.

In today's newsletter:

Price Point: Bitcoin and ether saw small gains on Thursday ahead of Federal Reserve Chairman Jerome Powell's speech Friday at the annual Jackson Hole conference. Coinbase introduced a liquid staking token ahead of Ethereum's Merge.
Market Moves: CoinDesk's Omkar Godbole looks at how bitcoin could perform after Powell's speech tomorrow. The cryptocurrency tends to move in the opposite direction to the dollar and weakness in the greenback after the speech could power a buy-the-fact bounce.
Chart of the Day: Bitcoin seems to have formed a bear flag, a pause that often refreshes lower, marking continuation of the broader decline.

No doubt, this year's selloff in crypto is largely tied to interest rates and the Fed's decisions to raise them to rein in inflation. Sign up for Market Wrap here to get our next take on how Powell's comments today are affecting bitcoin.

Price Point

Cryptocurrencies are showing gains on Thursday, with bitcoin (BTC) higher by nearly 2% and ether (ETH) advancing 3%. Stock futures were also up as investors await Friday's appearance by Federal Reserve Chairman Jerome Powell at the annual Jackson Hole conference. European stock and bond markets are also modestly in the green, as is the euro, though it remains below parity with the U.S. dollar.

Despite the recent advance, bitcoin appears to be struggling to break above the $22,000 mark. The cryptocurrency has mostly been stuck in a range of $21,300-$21,800 of late after having dropped to as low as $20,000 last week.

"There may still be some nerves after last week's plunge, with $20,000 looking particularly vulnerable once more," said Craig Erlam, senior market analyst at OANDA. "A break below could quickly see sentiment turn against crypto after an encouraging recovery since mid-June.

Looking at other altcoins, Ethereum classic (ETC) was trading up 10% on the day and memecoin Shiba Inu was up 10%. Cosmo's ATOM was up 9%.

Earlier Thursday, crypto exchange Coinbase introduced a liquid staking token ahead of Ethereum's Merge. The Coinbase Wrapped Staked ETH (cbETH) will have several uses, including selling and transferring staked ETH as well as for collateral in DeFi protocols.

The Coinbase move comes as the Ethereum Foundation disclosed on Wednesday the official parameters for the long-awaited Merge blockchain upgrade to a proof-of-stake consensus mechanism. The Bellatrix upgrade, which has begun its final countdown, is set to activate on Sept. 6. The Merge itself will be completed at some point from Sept. 10-20.

In other news, Bitcoin Depot, the world's largest operator of crypto ATMs, plans to go public with a listing on Nasdaq by merging with special purpose acquisition company (SPAC) GSR II Meteora at an estimated valuation of $885 million, according to a statement shared with CoinDesk.

Bitcoin (BTC)

See the latest price here

Ether (ETH)

See the latest price here

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Market Moves

Bitcoin's Pre-Jackson Hole Decline Leaves Room for 'Buy The Fact' Bounce

By Omkar Godbole

Financial markets are more interested in what the future holds than what happened in the past or what is happening right now. The forward-looking nature means traders try to predict the impact of upcoming events and discount the same in advance, setting the stage for more volatility after the event.

That's what crypto and equity markets seem to be doing ahead of the U.S. Federal Reserve Chairman Jerome Powell's scheduled speech on Friday at the Jackson Hole Symposium. Risk assets have come under pressure while the dollar and bond yields have rallied, pricing very hawkish or anti-inflation and pro-monetary tightening comments. That has left the door open for a "buy the fact" bounce in risk assets subject to Powell meeting expectations or sounding less hawkish than expected.

Bitcoin (BTC), the leading cryptocurrency by market value, has dropped by 13% since reaching a high of $25,000 on Aug. 15, CoinDesk data shows. Wall Street's tech index Nasdaq has lost nearly 6% since Aug. 15, while the dollar index, which gauges the greenback's exchange rate against major fiat currencies, has jumped 2.5%. The U.S. 10-year bond yield has increased by nearly 30 basis points.

"The market has 72% chance of a 75 basis point rate hike, the third in row, priced in. My scenario that I have been writing about and trading is bullish dollar ahead of Powell, and buy the rumor sell the fact," Marc Chandler, chief market strategist at Bannockburn Global Forex and the author of the book "Making Sense of the Dollar," said. "So as soon as Powell begins talking, look for the dollar to set back."

"I think no matter what Powell says or the Fed does, the market insists on reading/hearing him dovish," Chandler said.

Bitcoin tends to move in the opposite direction to the dollar and weakness in the greenback after Powell's speech could power a buy-the-fact bounce in the cryptocurrency.

Read the full story here.

Chart of The Day

Bitcoin Forms a Bear Flag

By Omkar Godbole

Bitcoin seems to have formed a bear flag, a pause that often refreshes lower, marking continuation of the broader decline.
A breakdown would imply a continuation of the sell-off from $25,000 and expose lows under $18,000 registered in June.

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
Cosmos	ATOM	+9.3%	Smart Contract Platform
Shiba Inu	SHIB	+8.1%	Currency
Loopring	LRC	+4.4%	Smart Contract Platform

Biggest Losers

Asset	Ticker	Returns	DACS Sector
Terra	LUNA	−0.1%	Smart Contract Platform

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

Investment Bank Cowen Nabs 2 Crypto Hires for Digital Asset Team
Cowen's crypto-focused hires come after the bank launched its digital asset division this year.
Crypto ATM Operator Bitcoin Depot to List on Nasdaq in $885M SPAC Deal
Bitcoin Depot says it has over 7,000 ATM locations in the U.S. and Canada.
Bitcoin's Pre-Jackson Hole Decline Leaves Room for 'Buy The Fact' Bounce
"No matter what Powell says or the Fed does, the market insists on reading/hearing him dovish," one observer said.
Canadian Crypto Marketplace WonderFi Files for Nasdaq Listing
The move is part of the Canadian company's plan to expand globally by making its shares available to wider group of investors.
Reddit Starts Airdrop of Polygon-Based "Collectible Avatars"
Avatars from the four collections are available for listing and trading on OpenSea.
Siam Commercial Bank Scraps $500M Purchase of Stake in Thailand's Largest Crypto Exchange
Thailand's oldest bank said Bitkub Online needs to resolve various issues at the request of Thailand's Securities and Exchange Commission.
Crypto Developer Platform Thirdweb Gets Katie Haun's Backing at $160M Valuation
Other investors in the $24 million Series A round included Coinbase Ventures and Shopify.

What to Watch

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.

Sebastien Borget, co-founder and COO, The Sandbox
Matthew Tuttle, CEO and CIO, Tuttle Capital Management
Layla Amjadi, Vice President of Product, Gemini

The Investing in Digital Enterprises and Assets Summit facilitates capital flow and market growth by connecting the digital economy with traditional finance through the Presenter's Mainstage, capital allocation meeting rooms and sponsor expo floor. Use code FM_20 for 20% off the General Pass. Register now.

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.