The latest moves in crypto markets, in context By Sheldon Reback, CoinDesk's news editor Was this newsletter forwarded to you? Sign up here. |
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Happy Friday! Here's what you need to know today in crypto: |
- ProShares says futures-trading costs are not affecting performance of its ETF tied to bitcoin futures.
- While cryptocurrencies broadly fell Thursday, Chainlink's LINK token surged.
- Coinbase is shutting its Borrow program that lends fiat currency.
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CoinDesk Market Index (CMI): 1,297 -1.95%
Bitcoin (BTC): $29,763 -1.7%
Ether (ETC): $1,888 -1.7%
S&P 500 futures: 4,575 +0.2%
FTSE 100: 7,657 +0.15%
Treasury Yield 10 Years: 3.84% −0.0
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ProShares, the issuer of the first U.S. bitcoin futures-linked exchange-traded fund (ETF), said concerns that costs associated with trading of the derivatives would lead to tracking errors are unfounded. The ProShares Bitcoin Strategy Fund began trading on the New York Stock Exchange in October, 2021, allowing investors to gain exposure to bitcoin (BTC) without having to actually own the cryptocurrency. The ETF, the world's largest crypto fund, invests in regulated and cash-settled bitcoin futures listed on the Chicago Mercantile Exchange (CME). From the very beginning, observers speculated BITO and other futures-based ETFs would significantly underperform bitcoin due to costs associated with rolling over, or selling expiring futures contracts and buying the next set. "Concerns about the roll costs are misguided; BITO has closely tracked bitcoin's price since inception," Simeon Hyman, global investment strategist at ProShares, told CoinDesk in an email interview. |
ProShares' Bitcoin Strategy ETF's holdings as of July 20. (ProShares) |
Cryptocurrencies slid Thursday with bitcoin (BTC) dipping to as low as $29,593 during U.S. afternoon hours, near its lowest point in a month. Ether (ETH) buckled below $1,900 to change hands 1% lower than 24 hours before. LINK, the native token of the Chainlink ecosystem, defied the slump and was the only crypto asset with sizable gains among the 40 largest tokens by market capitalization. The token surged 15% through the day, rising above $8 for the first time in nearly three months after Chainlink released this week an interoperability protocol that facilitates communication between blockchains and banks, tested by interbank communication system Swift. Ripple's XRP pared some of its impressive gains from previous days, dropping some 6% in 24 hours. The token's price almost doubled to 93 cents a week ago, following a partial court victory against the U.S. Securities and Exchange Commission (SEC). Coinbase Borrow, a program that allowed customers to receive regular currency loans of up to $1 million against their bitcoin (BTC) holdings, is shutting down. The company will instead focus its resources on products that "customers care about most," a spokesperson told CoinDesk. Customers who hold loans through the program have until Nov. 20 to pay back any outstanding loan balances. Coinbase said in May that it was not allowing Coinbase Borrow customers to take out new loans as part of a regular process of re-evaluating its products. The exchange has been under increased scrutiny from U.S. regulators, specifically the Securities and Exchange Commission (SEC), for its operations in the U.S., and has been doubling down on its businesses elsewhere. |
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Market Insight: Token Unlocks Tend to Weigh on Prices |
If you have been following the crypto market for a while, you have probably heard of token unlocks. The process refers to staggered releases of specific amounts of cryptocurrencies that had been frozen to prevent early investors or project team members from selling in large numbers. Unlocks free up liquidity and are widely considered bearish, though some observers say they only accentuate the existing market trend. New research by analytics firm The Tie shows coins, on average, declined in the lead-up to the event. However, when the liquidity freed up represented more than 100% of the average daily volume, prices quickly recovered, only to fall deeper within two weeks following the unlock. The firm conducted a study of over 350,000 unique unlock events involving more than 100 tokens. |
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- The chart shows daily net flow of ether into wallets tied to centralized exchanges.
- On Tuesday, centralized exchanges received a net 78,861.9 ETH, the highest single-day inflow since May 1.
- Increased flow of coins into exchanges is often breeds price volatility.
- Source: Glassnode
- Disclaimer: This article was written and edited by CoinDesk journalists with the sole purpose of informing the reader with accurate information. If you click on a link from Glassnode, CoinDesk may earn a commission. For more, see our Ethics Policy.
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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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