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Good morning. Here's what's happening:
Prices: A late Thursday dip sent bitcoin and other cryptos into negative territory from Wednesday highs that followed the Federal Reserve's moderate interest rate hike.
Insights: Crypto trading activity increases following the Federal Reserve's interest rate increase on Wednesday.
Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis. And sign up for First Mover, our daily newsletter putting the latest moves in crypto markets in context.
CoinDesk Market Index (CMI)
−18.9 ▼ 1.7%
−432.7 ▼ 1.8%
−30.9 ▼ 1.8%
+60.5 ▲ 1.5%
+3.4 ▲ 0.2%
+55.2 ▲ 0.2%
BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)
Bitcoin's Post Rate Hike Momentum Stalls
By James Rubin
A late Thursday price dip notwithstanding, optimism continued wafting through crypto markets a day after the U.S. central bank's modest price hike surprised few monetary policy observers.
Bitcoin was recently trading just above $23,500, down 1.8% over the past 24 hours but still well above last week's support near $23,000. The largest cryptocurrency has risen about 40% this year amid investors' growing optimism about inflation and the economy. The Federal Reserve's 25 basis point (bps) increase bolstered markets' sense that bankers were succeeding in their question to staunch stubbornly high prices.
In an interview with CoinDesk TV's "First Mover" program, Mark Connors, head of research at Canadian investment manager 3iQ, said that despite its recent gains, bitcoin was still trading below its 200-week moving average.
"We believe that as we get nearer [to the 200-day average] - which is a huge fundamental catalysts for bitcoin, and we have no reason to believe it won't be again - that [bitcoin] will see an even further move higher," Connors said.
Connors comments dovetailed with a CoinDesk report that bitcoin and the S&P 500 were approaching an easy-to-track bullish technical signal - a golden cross. A golden cross occurs when the 50-day simple moving average (SMA) of the security's price moves above its 200-day SMA, producing a cross on the price chart
Ether fared similarly on the day, dipping late to also fall 1.8% from Wednesday, same time. The second largest crypto in market value was recently changing hands near $1,650. Other major cryptos declined late in the day to flatten or also drop into negative territory. APT, the token of layer 1 blockchain Aptos, plunged 6.5% to lose some of the ground it has gained this year. APT rose more than any other token in January. GALA, the token of the Gala Games play-to-earn platform declined 5%. The CoinDesk Market Index, a measure of the crypto market's performance, was recently down 1.8%.
Equity markets enjoyed a banner day with the tech-focused Nasdaq and S&P 500 rising 3.2% and 1.4%, respectively as investors' hopes about inflation outweighed their concerns about disappointing fourth quarter results on Thursday from Apple and Alphabet and a wider slowdown in the once fearsome technology sector. "Financial markets believe inflation will decline more quickly than the Fed is currently thinking," Edward Moya, senior market analyst at foreign exchange market maker Oanda, wrote in an email.
3iQ's Connors noted increasing interest recently in 3iQ's crypto exchange traded funds, part of larger wave that saw investors pour more than $200 million into these types of products in January, according to crypto data provider group Crypto Compare.
"We had more smiles," Connors quipped. "We had to bring in some new coins to satisfy inflows. That was good. And it wasn't kind of crazy numbers. It was it was a nice healthy number."
Connors added that current growth is sustainable. "I think the [price] entry point is so good. If people are buying, they're the type of people who really want in. So there's not FOMO going on right now even though we're up. I really like this layer of buyer coming in here because they've done the work, they've shaken off the FTX debacle as a bad actor, a fraud."
Crypto Trading Volume Increases Following Fed Decision
By Glenn Williams
Bitcoin and ether saw trading volumes increase following the Federal Open Market Committee's (FOMC) rate decision.
About $32 billion in bitcoin changed hands on Thursday, a 20% increase over the previous day, and 40% higher than the $23 billion worth of BTC that traded the day prior to the Fed decision.
Ether's volume was 30% higher than on Wednesday, and 60% higher than volume preceding the FOMC announcement.
Data from exchanges across all spot markets reflects continued interest in the assets as the formerly challenging macroeconomic picture settles and investor optimism rises.
8:30 a.m. HKT/SGT(12:30 a.m. UTC): Japan bank services purchasing managers index (Feb.)
9:45 a.m. HKT/SGT(1:45 a.m. UTC): Caixin services purchasing managers index (Jan.)
21:30 p.m. HKT/SGT(1:30 p.m. UTC): U.S. unemployment rate (Jan.)
In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:
Bitcoin Briefly Tops $24K; Decentralized Social Network Nostr's Damus Gets Listed on Apple App Store
Bitcoin was trading above $23,500 after breaking through $24,000 in the early hours. NewEdge Wealth Senior Portfolio Manager Ben Emons joined the conversation after the Federal Reserve's latest interest rate decision. Also, Hodder Law Firm Founder and Managing Partner Sasha Hodder discussed the latest in FTX's bankruptcy proceedings. And Nostr, a startup decentralized social network, got its Twitter-like Damus application listed on Apple's App Store.
Crypto Winter Led to 91% Plunge in VC and Other Investments for January: A CoinDesk analysis shows crypto startups only raised $548 million last month. The FTX failure's full impact on industry fundraising likely remains to be seen.
Marathon Digital Sells Mined Bitcoin for First Time to Monetize Recent Rally: The bitcoin miner sold 1,500 bitcoin in January.
Crypto Market's Post-Fed Rally Continues as DeFi, Smart Contract Platform Sectors Star: Uniswap's UNI token and Avalanche's AVAX token were recently up about 4.5% and 3.4%; ether rose 3% at one point Thursday a day after unexpectedly moderate comments from Fed Chair Jerome Powell.
Bitcoin, S&P 500 Close In on Bullish 'Golden Cross' Signal: In the past, bitcoin's big rallies have started with a golden cross, but not all golden crosses have led to a big rally.
OpenSea Releases Suite of New Tools for Creator NFT Drops: The new experience allows select creators to include multi-stage minting phases, allowlist support and personalized landing pages for their NFT releases.