Good morning. This is what is happening.
Prices: Bitcoin, Ether and other, major cryptos continue to rise during weekend trading.
Insight. Ark Invest’s Cathy Wood is right that despite market uncertainty, innovative disruptive technologies that solve problems are gaining traction.
CoinDesk Market Index (CMI)
-4.3 ▼ 0.4%
-64.2 ▼ 0.3%
+5.7 ▲: 0.4%
The S&P 500 closes daily
+15.9: ▲: 0.4%
+1.9 ▲: 0.1%
Treasury yields for 10 years
BTC/ETH prices per CoinDesk indices; gold is the COMEX spot price. Prices as of approximately 4 p.m. ET
Bitcoin rises, then holds around $21k
By James Rubin
Still buoyed by falling inflation and a more optimistic view of the economy, bitcoin broke $21,000 for the first time since early November in early weekend trading before retreating slightly.
The largest cryptocurrency by market capitalization recently traded around $20,830, roughly unchanged over the previous 24 hours, but is up a whopping 25% this year, with most of the gains coming since last Tuesday, when BTC was still hovering around $17,400. near The rise comes amid renewed investor confidence that the US central bank is reining in inflation without tipping the economy into recession, a trend that has boosted riskier assets this year.
“We see the current rally in digital assets as a market reversal and NOT a bear market rally,” Mark Connors, head of research at Canadian digital asset manager 3iQ, wrote in an email.
In his weekly analysis of the markets on Friday, Connors wrote that the early January rally in altcoins, including SOL, which is up nearly 80% year-to-date, “turned into a key layer 1.” Referring to recent, less hawkish comments from Fed officials, Connors added that “the potential for hikes and balance sheet reductions … was an indication that the sharp reduction in the money supply may be over.”
“Remarkable because the reduction over the last 12 months was the largest since 1959,” he wrote. “This applies to digital assets as BTC is considered a hedge against depreciation, NOT inflation.”
Ether followed a similar pattern to Bitcoin, continuing its last week’s momentum to hit a two-month high on Saturday before falling slightly. ETH has recently been trading above $1,550, around the same time it was a day ago. Other major cryptos were mixed, with some rising a few percentage points and others falling, although FTT, the token of struggling crypto exchange FTX, recently surged 35% to trade just over $2. Seven months ago, FTT was trading at over $35. SOL, the token of the Solana blockchain, which has been rising for the past few weeks despite the debacle correlation of FTX, retreated by around 5%.
MANA, the token of the Decentraland 3D virtual reality platform, is up more than 16%.
US stock markets will be closed on Monday for Martin Luther King Jr. Day, which honors the late civil rights activist. The major indexes rose slightly on Friday to continue their own 2023 rally. The tech-heavy Nasdaq and the S&P 500, which has a strong tech component, rose more than 5% and 4%, respectively.
However, the rise in assets could be short-lived if economic news weakens, as many observers predict.
In a quarterly Wall Street Journal survey, nearly two in three economists expect the U.S. to enter a recession this year, about the same percentage as in the previous survey, though many believe the downturn will be mild.
And in an email to CoinDesk, Joe DiPasquale, CEO of crypto fund manager BitBull Capital, cautiously wrote that “market participants should be cautious during such a rally and expect more stability and downside.”
“We remain bullish on accumulation below $18,000 and our long-term outlook remains the same for 2023 with accumulation at the lower levels of the range.”
The biggest winners
The Biggest Losers
By Sam Reynolds
Katie Wood is right. There is a lot going on in blockchain and technology that has been overlooked due to the “wall of worry”.
ARK’s Katie Wood probably had a lot to worry about in 2022.
The bullish investor and self-confessed Bitcoin HODLer has seen his core funds such as the ARK Innovation ETF ( ARKK ) and the ARK Next Generation Innovation ETF ( ARKW ) drop more than 50%. Crypto has been chaotic, as well-documented by CoinDesk , and tech hasn’t fared much better, with cuts along with a cooling venture capital market.
But Wood, in a Jan. 12 blog post, that all this anxiety has also caused us to miss a lot.
“In my 45 years on Wall Street and over 30 years of portfolio management, I have never seen markets so displaced,” he wrote. “Feared by entrenched inflation and high interest rates, the wall of anxiety in equity markets has reached enormous heights.”
But despite the market’s uncertainty, he believes disruptive innovative technologies that solve problems have taken off in troubled times.
The market was too focused on the carnage to notice all the advancements that took place in 2022, Wood writes, pointing to disruptive technologies such as ChatGPT, a next-generation artificial intelligence platform, new developments in autonomous vehicles, the continued growth of digital wallets, and blockchain of course.
“Despite the recent collapse of crypto exchange FTX, the underlying public blockchains like Bitcoin and Ethereum have not bypassed transaction processing,” Wood wrote.
Bitcoin is up 25.6% over the past month, with the world’s largest digital asset experiencing one-day price spikes not seen in months. It was quite a positive start to the year, the volume of exchanges is on the rise.
It also has for Wood funds. ARKK is up 18.2% year-to-date, and ARKW is in the green at 8.2% month-to-month.
Technology is ubiquitous and growing rapidly. This is why software is eating the world.
The market has shown that the demand for blockchain and crypto is still there. If anything, the 2022 mess was an exercise in weeding out the bad actors and strengthening the positions of the good ones. Let’s just make sure we don’t miss what the good ones are doing with this “wall of worry” in front of us.
2:00 HKT/SGT (18:00 UTC) China’s Gross Domestic Product (FY/Q4)
7:00 HKT/SGT (23:00 UTC) UK ILO Unemployment Rate (Nov)
7:00 HKT/SGT (23:00 UTC) Harmonized Index of Consumer Prices of the European Union (annual/December)
In case you missed it, here’s the most recent episode of CoinDesk TV’s “First Mover”:
Crypto.com to cut 20% of staff. SEC Alleges Gemini, Genesis Sold Unregistered Securities
Crypto.com was the latest company to cut its workforce by nearly 20% as the crypto winter continues. Sylvia Jablonski, CEO of Defiance ETFs, and Brian Mosoff, CEO of Ether Capital, shared their analysis of the crypto markets. Additionally, the US Securities and Exchange Commission (SEC) alleged that crypto exchange Gemini and crypto lender Genesis Global Capital sold unregistered securities in a filing late Thursday. DCG owns Genesis and CoinDesk.
New MetaMask Product to Add Liquid Staking via Lido and Rocket Pool; The update comes two months before Ethereum’s upgrade, which is expected to allow users to withdraw their staked ETH.
Bloomberg, WSJ, CoinDesk are among the media seeking to know who saved Sam Bankman-Fried. Attorneys for the former CEO of failed crypto exchange FTX requested and received anonymity for both parties who backed the $250 million bond that got Bankman-Fried out of jail.
Inside Bonk Inu. How 22 developers put Shiba Inu fun into Solana and away from FTX. Disgusted, disgusted and annoyed. Solana’s popularity took a hit when reports first surfaced of possible fraud at Sam Bankman-Fried’s then-giant crypto exchange FTX. But the developers have found a way to start the activity.
Bitcoin’s ‘Volatility Smile’ Shows Rising Demand for Rising Exposure; The Bitcoin Volatility Smiley is a graphical representation of implied volatility or option demand at different strike levels.
President Herbert Hoover saves the day for a crypto bank. Yes, it is strange. Silvergate was backed by the Federal Home Loan Bank system established in 1932.