The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk news reporter 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: |
- Bitcoin shows some signs of stirring with a brief bump above $26K.
- Coinbase plans international expansion, eyeing EU, U.K. and elsewhere.
- MicroStrategy's bitcoin impairment losses gave a false impression of its value.
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CoinDesk Market Index (CMI): 1,081 +0.1%
Bitcoin (BTC): $25,856 +0.6%
Ether (ETC): $1,626 −0.1%
S&P 500: 4,451.14 −0.3%
Gold: $1,947 +1.5%
Nikkei 225: $1,947 +1.5% |
Bitcoin showed some signs of stirring from its September stupor late on Thursday, rising around 3% to $26,400, before dropping back below $26,000 during the European morning. The CoinDesk Market Index (CMI) also hit its highest point this month, rising over 2% before retreating. Bitcoin has mostly languished below $26,000 this month as traders awaited clarity around the big regulatory hotspots, such as the SEC's decision on the listing of a spot bitcoin ETF in the U.S. September is a difficult month for bitcoin, which has posted negative returns every year since 2016. So far, 2023 looks to be no exception. |
Coinbase set out plans for an international expansion that focuses on acquiring licenses in major financial jurisdictions "enacting clear rules" for the crypto industry. CEO Brian Armstrong has expressed concerns in the last few months about the lack of regulatory certainty in Coinbase's native U.S., so it is targeting the EU, U.K., Canada, Brazil, Singapore and Australia as immediate priorities. The exchange added that it is "in the final stages of selecting the location" for its EU hub, saying it wishes to "leverage our being the most trusted brand in the crypto space ahead of the European elections in June 2024." MicroStrategy's large bitcoin impairment losses have given a false impression of the company's inherent value, according to investment bank Berenberg, something changes to accounting standards should fix. MicroStrategy has reported $2.23 billion of cumulative impairment losses from its BTC holdings since August 2020, Berenberg said in a report on Wednesday. Proposed changes by the Financial Accounting Standards Board (FASB) will allow companies like MicroStrategy to "eliminate the poor optics that have been created by impairment losses," the bank said. This week the FASB voted to let companies use fair-value accounting in a move that will allow them to show gains and losses immediately on their income statements. |
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Market Insight: U.S. Interest Rates High Enough to Tame Inflation |
New research from the Federal Reserve Bank of Chicago suggests that rate increases since March 2022 have set the U.S. on a path to cut inflation to 2% without sparking a recession, alleviating the need for further tightening. "We estimate that although the majority of the effects on output and inflation have already occurred, the policy tightening that has already been implemented will exert further restraint in the quarters ahead, amounting to downward pressure of about 3 percentage points on the level of real GDP and 2.5 percentage points on the Consumer Price Index level," Chicago Fed economists Stefania D'Amico and Thomas King said. D'Amico and King's modeling suggests that the headline CPI will probably drop below 2.3% by mid-2024, which, according to the economists, equates to a 2% inflation rate as measured by the personal consumption expenditure (PCE) price index. A combination of sliding inflation and a relatively resilient economy could prove the ideal combination for risk assets, such as cryptocurrencies. The tightening of the last 18 months played some part in the collapse of crypto asset prices compared to the 2021 heights. |
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- The chart shows one-month bitcoin skew, which measures the spread between the volatility premiums for call and put options expiring in four weeks.
- Skew fell to nearly -5% on Thursday, the lowest since the U.S. banking crisis of March, indicating a bias for puts, which offer protection against price drops.
- Source: Amberdata
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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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