First Mover Americas: Bitcoin Jumps Most in Six Months, as ‘Powell Pivot’ Speculation Returns

First Mover Americas: Bitcoin Jumps Most in Six Months, as ‘Powell Pivot’ Speculation Returns

The latest price moves in crypto markets in context for Sept. 9, 2022.

  • Price Point: Bitcoin posts its biggest daily gain in six months, surging past $20,000 on speculation the Federal Reserve could quickly pause or reverse monetary-policy tightening as the U.S. economy slides into recession.
  • Market Moves: CoinDesk rolls out a 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.

Price point

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 (DAI) moving through its pipes, Sam Reynolds reports. In August, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, prohibiting all U.S. 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.

Biggest Gainers

AssetTickerReturnsDACS Sector
TerraLUNA2+68.5%Smart Contract Platform
RavencoinRVN+17.51%Currency
Unifi Protocol DAOUNFI+14.68%DeFi

Biggest Losers

AssetTickerReturnsDACS Sector
PolymathPOLY-37.16%DeFi
Terra Luna ClassicLUNA-17.7%Smart Contract Platform
PlayDappPLA-9.83%Culture & Entertainment

Market Moves

Crypto’s S&P 500: CoinDesk Unveils Broad-Market, Digital-Asset Index

By Bradley Keoun

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 GalaxyCF Benchmarks (part of the Kraken exchange), NasdaqSolactiveMarketVectorMSCI and S&P.

Chart of The Day

Ether futures “backwardation” starts to fade

By Bradley Keoun and Omkar Godbole

Coindesk - Unknown

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. (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.

This article was originally published on coindesk.com

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