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Good morning, and welcome to First Mover. I'm Omkar Godbole here to take you through the latest in crypto markets, news and insights. (Lyllah Ledesma is off for the rest of the week.) In today’s newsletter: - Price Point: On day of big Federal Reserve meeting, bitcoin trades higher alongside stock futures.
- Market Moves: Cathie Wood's Ark Invest unloads Coinbase shares as stock price falls; MicroStrategy tumbles 11%.
- Chart of The Day: Balance of wrapped bitcoin (WBTC) drops to eight-month low.
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Bitcoin (BTC) traded higher on Wednesday, as stocks rose and the dollar dipped ahead of the expected Federal Reserve rate increase. The top cryptocurrency by market value changed hands at $21,300 during the early U.S. hours, representing a 0.8% gain on a 24-hour basis. Futures tied to the S&P 500 rose 0.4% alongside similar gains in the major European equity indices. The U.S. Dollar Index, which tracks the greenback’s value against major fiat currencies, slipped 0.2% to 106.97. The Fed is expected to announce a second consecutive 75 basis points (0.75 percentage point) rate hike at 2 p.m. ET (18:00 UTC). Some observers said the impending rate hike is priced in already, and that the cryptocurrency could see a relief rally following the announcement. However, analysts at ING expect the rate hike to put a floor under the dollar. “Unless the Fed sends some dovish signals along the lines of the July policy announcement, we think that the 75 basis-point rate hike can fit well into a largely supportive dollar narrative on the monetary side,” ING analysts wrote on July 22. Any post-Fed dollar strength might not bode well for bitcoin, as historically the cryptocurrency has exhibited an inverse correlation with the greenback. “Bitcoin’s fortunes are negatively correlated with the underlying strength of the U.S. dollar, and so moves downwards on any sign of dollar strength,” Bitfinex’s market analysts said in an email. Kraken faces Iran-related investigation Ether, the second-largest cryptocurrency by market capitalization, traded at $1,460, extending late Tuesday’s impressive recovery from $1,350 to $1,440. Ethereum classic (ETC), an offshoot of ether, traded 14% higher while the privacy-focused monero (XMR) was up 7%. The losing side included names like cosmos (ATOM), chainlink (LINK) and helium (HNT). ONE, the native token of Harmony, an open source blockchain for decentralized applications, traded 0.7% lower as developers proposed issuing ONE tokens to compensate for the losses from the hack of its Horizon bridge in June. In other news, the cryptocurrency exchange Kraken faced federal investigation for potential violation of U.S. sanctions by allowing users in Iran and elsewhere to buy and sell digital tokens. Kraken’s Chief Legal Officer Marco Santori told CoinDesk the exchange would not comment "on specific discussions with regulators." Elsewhere, financial services company and Bitmain partner Antalpha unveiled several miner-dedicated products like co-lending with other financiers; financing to offload electricity costs, deals collateralized with hashrate (a measure of computational power) instead of tokens or equipment. |
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Ark Invest Offloads Over 1.4M Coinbase Shares as COIN Price Falls; MSTR and MARA Drop 11% - By Greg Ahlstrand and Michael Bellusci |
Three funds of Cathie Wood’s Ark Investment Management sold a total of more than 1.4 million shares of Coinbase Global (COIN) on Tuesday, the firm said in its daily trading update email on Wednesday, Greg Ahlstrand and Michael Bellusci report. - The move comes almost three months after Ark bought more than half a million shares in May.
- On Tuesday, Coinbase shares closed down 21.08% at $52.93. Based on Tuesday's closing price, the value of the offloaded shares would be over $75 milllion. Coinbase shares were trading 5.72% higher at $55.96, during after-hours trading.
- “Coinbase was considered one of the better-run crypto companies that tried to obey the rules and work with the regulatory bodies,” Edward Moya, senior markets analyst at Oanda said in a note Tuesday.
- “The risk of tougher regulation has been a constant headache for crypto, and it seems that a couple of tough rulings could cripple a good portion of the cryptoverse. If some cryptos are deemed securities, that would make the life of so many brokerages so much harder,” Moya added.
- While Coinbase is hardest hit, with a 20% drop late on Tuesday afternoon, related players like MicroStrategy (MSTR) and Marathon Digital (MARA) are also suffering sizable declines of roughly 11%.
Also read: Coinbase's 20% Decline Leads Crypto Names Lower Following Report of SEC Probe |
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The number of wrapped bitcoin has declined recently. (Glassnode) |
- The number of wrapped bitcoin (WBTC) balance has declined to 236,434, the lowest since Nov. 8, 2021, according to Glassnode.
- The tally has dropped 17.2% since the collapse of Terra in mid-May.
- “It’s likely related to Celsius’ repayment of their WBTC loan, and following redemptions prior to Chapter 11, at least the sharp decline in early July,” Vetle Lunde, analyst at Arcane Research, told CoinDesk.
- WBTC is the first ERC-20 token backed 1:1 with bitcoin and designed to act as a representation of the top cryptocurrency on the Ethereum blockchain.
- Glassnode defines the WBTC balance as the amount of bitcoin held by BitGo, the custodian responsible for minting new WBTC ERC-20 tokens and guaranteeing backing of new ERC-20 tokens by actual BTC.
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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 |
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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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- Caroline D. Pham, commissioner, Commodity Futures Trading Commission
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Today's newsletter was edited and produced by Bradley Keoun. |
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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