The latest moves in crypto markets, in context Was this newsletter forwarded to you? Sign up here. |
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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 this week.) - Price point: Bitcoin has so far avoided a steeper tumble below the $30,000 level, but it's still poised to extend its losing streak to a record eight weeks.
- Market Moves: Data from the bitcoin options market shows traders are leaning bearish, Shaurya Malwa reports.
- Feature: The collapse in $LUNA tokens were only part of the story. Crypto traders are rushing for the exits from DeFi apps on the Terra blockchain, Malwa reports.
Today’s newsletter was produced by Parikshit Mishra. Please let us know what you think by replying to this email. |
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By one measure, cryptocurrency markets are going through their worst-ever stretch – and it's not over yet. Bitcoin (BTC) has slid 3.2% since Sunday, poised to extend an already-at-a-record seven-week losing sreak. It's notable that the largest cryptocurrency has showed resilience around the $30,000 price level. But it sure hasn't staged much of a recovery since last week's full-blown sell-off in the wake of the stunning collapse of the Terra blockchain and its LUNA tokens. Bitcoin at one point fell to nearly $24,000 but as of press time was changing hands around $30,300. There hasn't been much relief on the economic front, where growing concerns over a U.S. recession are colliding with a Federal Reserve that says it's determined to tamp down fast-rising inflation even as U.S. stocks appear poised to enter a bear market. The cryptocurrency's correlation with stocks has strengthened recently – partly because so many traditional investors are now trading it – so bitcoin is likely to face ongoing pressure from any tightening of financial conditions. For what it's worth, the Wall Street firm Goldman Sachs put out a report predicting that the recent plunge in cryptocurrency prices won't in and of itself create much of a drag on the economy. Even so, regulators are showing greater concern about the growing risks from crypto. A statement released by the G7 called for tougher rules to counter money laundering and disclose reserves, after the collapse of stablecoin terraUSD last week, CoinDesk's Jack Schickler reported Friday. In traditional markets, U.S. stock futures pointed to gains when the market opens on Friday, after China cut a key lending rate – a form of economic stimulus. |
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Put/Call ratios reached a yearly peak on Thursday. (Delphi) |
Activity on bitcoin (BTC) options suggests rising bearish sentiment among investors. The asset’s price movements have been highly correlated to the U.S. markets in the past few months, with poor earnings reports and hawkish comments from the Federal Reserve (Fed) showing an impact on bitcoin prices. Investors are placing bets accordingly. Put/call ratios for bitcoin open interest hit a 12-month high of 0.72 yesterday, research firm Delphi said in a note Friday, adding that the data indicated “bearish sentiment among investors.” Similar ratio levels were reached last May. (A put option is, generally speaking, a bet on a price decline, while a call option is a bet on upside.) “The put/call ratio measures the amount of put buying relative to calls,” Delphi analysts explained in the note. “A high put/call ratio indicates that investors are speculating whether bitcoin will continue to sell off, or it could mean investors are hedging their portfolios against a downward move.” “Last April, the put/call ratio traded as high as 0.96 before Bitcoin’s price dropped over 50% in May 2021,” the firm added. Read More: Bitcoin Options Data Suggests Bearish Sentiment Among Investors |
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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. 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. |
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The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours: |
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Biggest Gainers Biggest Losers There are no losers in CoinDesk 20 today. |
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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 20 is a ranking of the largest digital assets by volume on trusted exchanges. |
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It’s Not Just LUNA. Terra’s DeFi Apps Have Hemmorhaged $28B |
In the two weeks since Terra's U.S. dollar-pegged stablecoin terraUSD (UST) lost its peg, causing massive investor losses, billions of dollars have been taken out of the ecosystem. Data from trackers show funds held in decentralized finance (DeFi) applications built on Terra have slumped to $155 million in locked value as of Friday morning, a level last seen in February 2021, from more than $29 billion at the start of this month. Locked value on Terra DeFi peaked at $30 billion in early April. The declines came as UST lost its 1:1 peg against the U.S. dollar amid a broader slump in markets. That created a death spiral as investors exchanged UST for other stablecoins, sending the Terra token to as low as 4 cents on May 14. “Experiencing significant losses, or seeing others take significant losses – at no fault of their own – is probably one of the fastest ways for a protocol or blockchain in this space to lose the trust of the community,” Simon Furlong, co-founder of Geode Finance, told CoinDesk in an email. Link to full story: It’s Not Just LUNA. Terra’s DeFi Apps Have Hemmorhaged $28B |
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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. Lily Zhang, financial officer, Huobi Justin Sun, founder, Tron Felix Honigwachs, CEO, Xchange Monster
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Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price. |
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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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