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Good morning, and welcome to First Mover. I'm Brad Keoun, here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is off today.) In today's newsletter: - Price Point: Bitcoin posts its biggest daily gain in six months, surging past $20,000 on speculation that the Federal Reserve could quickly pause or reverse monetary-policy tightening as the U.S. economy slides into recession.
- Market Moves: CoinDesk rolls out new broad-market gauge of digital-asset prices, the CoinDesk Market Index – and the media company hopes the new gauge could become the "S&P 500 of crypto."
- Chart of the Day: The "backwardation" in ether futures is starting to fade – perhaps the latest chapter in traders' ongoing efforts to position themselves ahead of the Ethereum blockchain network's upcoming Merge.
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By Omkar Godbole and Bradley Keoun |
Bitcoin posted its biggest daily gain in six months on Friday, surging past $20,000 as traditional-market investors shrugged off Federal Reserve Chairman Jerome Powell's pro-liquidity tightening stance. Bitcoin (BTC), the leading cryptocurrency by market value, jumped 8.6% to $20,997 and ether (ETH), the native token of Ethereum's blockchain, scheduled to undergo a major technological upgrade next week, rose 4% to $1,705, according to CoinDesk data. The newly released CoinDesk Market Index rose 5.5%. (Scroll down to Market Moves for more on that.) The rally appeared tied to speculation that risky assets, from stocks to cryptocurrencies, could draw strength from monetary easing next year – a turnabout from 2022 where central banks from the Federal Reserve to European Central Bank are ratcheting interest rates higher. (The last time the Fed tried to raise interest rates in 2018, markets lurched, and Fed Chair Jerome Powell agreed to pause the campaign and then leading a rate-cutting cycle the following year.) In traditional markets, stock futures were wavering after major U.S. stock indexes finished the day higher on Wednesday. The European Central Bank raised interest rates by 0.75 percentage point, the biggest single hike since it began setting monetary policy in 1999. In the news, the controversial crypto mixer Tornado Cash once again found itself at the nexus of stolen tokens from a decentralized-finance protocol, as PeckShield spotted $500,000 of the dollar-linked stablecoin Dai moving through its pipes, Sam Reynolds reports. In August, the US Treasury's Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash prohibiting all US persons and entities from interacting with the protocol. And crypto influencer Cooper Turley – one of the original "yield farmers" from the 2020 "DeFi Summer" – told CoinDesk that he was spinning up a $10 million fund to invest in artists and startup founders bringing crypto and music together. |
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Crypto's S&P 500: CoinDesk Unveils Broad-Market, Digital-Asset Index |
CoinDesk on Friday unveiled a new index of digital-asset prices, saying it hopes the broad gauge of crypto markets could become an industry benchmark similar to the stock market's Dow Jones Industrial Average or Standard & Poor's 500. The CoinDesk Market Index initially consists of 148 digital tokens, said Jodie Gunzberg, managing director for CoinDesk Indices. To be included, each token must have a pricing history from at least two eligible exchanges going back at least 30 days. "It's meant to be as inclusive as possible," Gunzberg said in an interview. "We're just trying to represent the market." The new index joins a growing field of competitors aiming to meet demand from investors and traders for ways to measure the crypto market's performance. Other providers include Bloomberg Galaxy, CF Benchmarks (part of the Kraken exchange), Nasdaq, Solactive, MarketVector, MSCI and S&P. Read the full story here. |
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Ether futures "backwardation" starts to fade |
By Bradley Keoun and Omkar Godbole |
Group of lines at the top represent the difference between the current or "spot" market price of ether and the one-month-forward futures price (left axis). The upward slope in the past couple days shows that the discount is shrinking. The black line represents the ether spot price (right axis). (Skew) |
- Trades surrounding the Ethereum blockchain's upcoming Merge have put the ether (ETH) futures curve into "backwardation" – where the futures price trades below the current market or "spot" price. That's a departure from the more usual condition of "contango" where the futures price is higher than spot.
- In the past couple days, though, the discount is starting to shrink.
- On the CME exchange, the one-month discount has slimmed to 8.85% from 13% earlier in the week, based on data from crypto-derivatives tracker Skew.
- The three-month discount has shrunk to 3.8% from 6%.
- Some analysts have linked the backwardation to bets that the Ethereum network might get forked by crypto miners resisting its shift to a less energy-intensive "proof-of-stake" blockchain system from the current "proof-of-work" version.
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Biggest Gainers 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 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 9:00 a.m. U.S. Eastern time. - Anthony Di Iorio, Jaxx Founder and CEO, Ethereum co-founder
- Jodie Gunzberg, managing director, CoinDesk Indices
- Patrick Hillman, chief communications officer, Binance
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Which institutes are most impacting the blockchain world? Tell us your thoughts in a five-minute survey. We're welcoming responses until Sept. 7. Take the survey here. |
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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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