Good morning. What is happening:
Prices: Bitcoin, ether and other major cryptocurrencies continue to rise in weekend trading.
Informations: Ark Invest’s Cathie Wood is right to think that despite the uncertainty in the market, disruptive innovation technologies that solve problems are attractive.
Prices
CoinDesk Market Index (CMI)
1,004.63
-4.3 ▼ 0.4%
Bitcoin (BTC)
$20,868
-64.2 ▼ 0.3%
Ethereum (ETH)
1554 dollars
+5.7 ▲ 0.4%
The S&P 500 closes daily
3,999.09
+15.9 ▲ 0.4%
Gold
1920 dollars
+1.9 ▲ 0.1%
Treasury income 10 years
3.51%
▲ 0.1
BTC/ETH quotes for CoinDesk Indices; gold is the COMEX spot price. Prices as of 4:00 p.m
Bitcoin rises, then nears $21,000
by James Rubin
Bitcoin hit $21,000 in weekend trade for the first time since early November before retreating slightly, riding the tailwinds of falling inflation and a better outlook for the economy.
The largest cryptocurrency by market capitalization recently traded at around $20,830, roughly flat over the previous 24 hours, but up 25% this year, with most of the gains coming since last Tuesday, when BTC was still near $17,400. The rise comes amid renewed investor confidence that the U.S. central bank is taming inflation without triggering a recession, a trend that has pushed the riskiest assets higher this year.
“We see the current rally in digital assets as a market reversal and a bear market rally,” Mark Connors, head of research at Canadian digital asset manager 3iQ, said in an email.
In his weekly market analysis on Friday, Connors wrote that early January “rolled into major Layer 1s” in altcoins, including SOL (up nearly 80% year-to-date). Pointing to recent, less hawkish comments from Fed governors, Connors added that “the potential for lower interest rates and a reduced balance sheet … is a sign that the sharp decline in the money supply” may be coming to an end.
“Significant because the decline over the past 12 months was the largest since 1959,” he said. “This applies to digital assets because BTC is considered a hedge against depreciation, NOT inflation.”
Ether followed a similar pattern to bitcoin, continuing its recent week’s momentum into Saturday to hit a two-month high before falling slightly. ETH recently changed hands above $1,550, where it was at about the same time a day ago. Other major cryptocurrencies were mixed, with some rising a few percentage points and others falling, although FTT, a token of embattled crypto exchange FTX, recently traded up 35% to just over $2. Seven months ago, FTT was trading over $35. The Solana blockchain token SOL, which has rallied despite being mixed up with the FTX debacle over the past few weeks, is down around 5%.
Decentraland’s flagship 3D virtual reality platform, MANA, is up more than 16%.
US stock markets will be closed on Monday for Martin Luther King Day, which honors the late civil rights leader. Major indexes rose slightly on Friday to continue their 2023 rally. The Nasdaq and S&P 500, which have a large tech component, rose more than 5% and 4%, respectively.
However, the rally in assets could be short-lived if economic news weakens, as several observers predict.
In the Wall Street Journal’s quarterly 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, although many believe the economic contraction will be moderate.
And in an email to CoinDesk, Joe DiPasquale, CEO of crypto fund manager BitBull Capital, cautioned that “market participants should be cautious during such spikes and expect more stability and downside.”
“We continue to remain bullish on a rally at $18,000 and below, and our long-term outlook remains the same for 2023 – rallying at the bottom of the range.”
Biggest Winners
The biggest losers
Concepts
By Sam Reynolds
Cathie Wood is right: Blockchain and technology have a lot that gets overlooked because of the “wall of worry”.
ARK’s Cathie Wood had a lot to worry about in 2022.
The growth investor and self-confessed bitcoin HODLer has seen his core funds such as ARK Innovation ETF ( ARKK ) and ARK Next Generation Innovation ETF ( ARKW ) drop more than 50%. Crypto has been chaotic, as well-documented by CoinDesk, and the tech cooling hasn’t fared much better with layoffs alongside the venture capital market.
But Wood said in a Jan. 12 blog post that all this worry is depriving us of much.
“In my 45 years on Wall Street and more than 30 years in portfolio management, I’ve never seen the markets move so much,” he said. “The wall of anxiety has reached major heights in equity markets, plagued by fears of fixed inflation and higher interest rates.”
But despite market uncertainty, he believes disruptive innovation technologies that solve problems have gained traction in turbulent times.
The market has been too focused on the carnage to see all the advances in 2022, Wood wrote, including disruptive technology like ChatGPT, a next-generation artificial intelligence platform, new developments in autonomous vehicles, the continued rise of digital wallets and, of course, blockchain.
“Despite the recent collapse of crypto exchange FTX, major public blockchains like Bitcoin and Ethereum have not taken a step forward in processing transactions,” Wood said.
It really hasn’t missed a beat: Bitcoin is up 25.6% in the past month, with the world’s biggest digital asset experiencing one-day price jumps not seen in months. The year has had a rather positive start, there is a trend of increasing exchange volume.
So it is for Wood funds. Year-to-date, ARKK is up 18.2% and ARKW is in the green at 8.2% on the month.
Technology is ubiquitous and expanding rapidly. That’s why the program eats the world.
The market has shown that there is still demand for blockchain and cryptocurrency. If anything, the turbulence of 2022 was an exercise in shaking out the bad actors and strengthening the positions of the good ones. Let’s make sure we don’t miss out on what the good guys are doing with this “wall of worry” in front of us.
Important events.
2:00 a.m. HKT/SGT (6:00 p.m. UTC) China’s Gross Domestic Product (YY/Q4)
7:00 a.m. HKT/SGT (11:00 p.m. UTC) UK ILO Unemployment Rate (November)
7:00 a.m. HKT/SGT (11:00 p.m. UTC) Harmonized Index of Consumer Prices of the European Union (YY/December)
CoinDesk TV
In case you missed it, here’s the latest episode of First Mover on CoinDesk TV:
Crypto.com to lay off 20% of employees; SEC Alleges Gemini Sold Unregistered Securities
Crypto.com has become the latest company to cut its workforce by nearly 20% as the cryptocurrency winter continues. Defiance ETFs CEO Sylvia Jablonski and Ether Capital CEO Brian Mosoff shared their analysis of the crypto markets. Moreover, the US Securities and Exchange Commission (SEC) alleged that cryptocurrency exchange Gemini and cryptocurrency issuer Genesis Global Capital sold unregistered securities in a lawsuit filed on Thursday. DCG owns Genesis and CoinDesk.
Titles
New MetaMask Product to add Liquid Staking via Lido and Rocket Pool: The update comes two months before an Ethereum update to allow users to withdraw their distributed ETH.
Bloomberg, WSJ, CoinDesk, among media outlets interested in finding out who saved Sam Bankman-Fried: Attorneys for the former CEO of failed cryptocurrency exchange FTX requested and were granted anonymity for the two parties behind the $250 million bond that got Bankman-Fried out of jail.
Inside Bonk Inu: 22 How Developers Place Shiba Inu Fun Away from Solana and FTX: Disgruntled, disgusted and bored: Solana’s popularity took a hit when reports of possible fraud first surfaced at Sam Bankman-Fried’s then-behemoth cryptocurrency exchange FTX. But the developers found a way to get started.
Bitcoin’s ‘Volatility Smile’ Shows Rising Bullish Demand: Bitcoin’s volatility smiley is a graphical representation of implied volatility or demand for options at various strike levels.
Is President Herbert Hoover Saving the Day for a Crypto Bank? Yes, It’s Weird: Silvergate is backed by the Federal Home Loan Banking system, established in 1932.