First Mover Americas: Ether's Net Issuance Points to Supply Squeeze Ahead, Waves Hits Record High

The latest moves in crypto markets in context for March 29, 2022.

AccessTimeIconMar 29, 2022 at 1:04 p.m. UTC
Updated Apr 14, 2024 at 10:52 p.m. UTC

Good morning, and welcome to First Mover, our daily newsletter putting the latest moves in crypto markets in context. Sign up here to get it in your inbox each weekday morning.

Here’s what’s happening this morning:

  • Market Moves: Calm in credit markets likely helps bitcoin and equities look through sustained rise in bond yields.
  • Featured stories: Ether's net issuance points to supply squeeze ahead.

And check out the CoinDesk TV show “First Mover,” hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time.

  • Ben Gagnon, chief mining officer, Bitfarms
  • Jeff Dorman, chief operating officer, Arca
  • Robert Bogucki, managing director and global co-head of trading, Galaxy Digital

Market Moves

By Omkar Godbole

Both crypto and stock markets continue to overlook a sustained rise in bond yields, and that resilience perhaps stems from the calm in credit markets.

"There’s no stress in credit markets, so until that happens, you’ve got to sit on the bid, really," David Belle, founder of and U.K. growth director at TradingView, tweeted. Credit markets had turned jittery following Russia's invasion of Ukraine on Feb. 24.

Bitcoin remained on the hunt for the 200-day average placed at $48,250, after it narrowly missed testing that critical technical resistance level on Monday.

The futures market exhibited a bullish tone, with the one-month contract listed on the Chicago Mercantile Exchange trading at an annualized premium of 6%, the highest since mid-December, according to data provided by Skew. The dollar value locked in the CME-based open futures contracts rose above $3 billion for the first time this year. The exchange is considered a proxy for institutional activity.

Premium on other exchanges remained under 5%, signaling a lack of conviction among retail traders about bitcoin's price rally.

Ether, the second-largest cryptocurrency and the native token of Ethereum's blockchain, topped $3,450 for the first time since Jan. 6.

Programmable blockchain Terra's LUNA token hit a record high of $105.91. "Sentiment for LUNA has grown in the past month largely due to the Luna Foundation Guard (LFG), a Singapore-based nonprofit that is purchasing over $3 billion worth of bitcoin as an additional layer of security for UST, Terra's decentralized dollar-pegged stablecoin," CoinDesk's Shaurya Malwa noted.

From a technical analysis perspective, the focus was on LUNA's ability to keep gains above the $100 mark. In recent weeks, the token has failed multiple times to establish a foothold above that psychological level.

WAVES, the native cryptocurrency of Waves blockchain, which enables users to create and launch custom digital tokens, surged over 50% to a record high of $52. The surprise launch of Waves Labs, a U.S-based venture to support, develop and incubate commercial opportunities for the Waves blockchain, likely lifted the token higher.

"Waves Labs is a key component of the Waves plan to grow exponentially in 2022. Despite a period of record growth of our ecosystem, Waves still remains relatively unknown in the U.S. crypto space. With the founding of Waves Labs, the ecosystem fund, and the extremely talented team in place, I do not doubt that Waves will reach mass adoption in 2022 and beyond,” Sasha Ivanov, founder of Waves, said in a press release.

WAVES has rallied more than 300% this month to top the list of best performing cryptocurrencies with market values of at least $1 billion.

Other significant gainers of the day were RUNE, LRC, FIL and ETC.

Bitcoin's one-month futures premium on the CME (Skew)
Bitcoin's one-month futures premium on the CME (Skew)

Latest Headlines

Ether's Impending Supply Squeeze

By Omkar Godbole

Ether's net daily emission, or the daily supply adjusted for the number of tokens burned, appears to be trending south, providing bullish cues to the native token powering Ethereum's blockchain.

Data tracked by IntoTheBlock shows ether's net issuance declined by 2,960 ETH to 6,170 ETH on Monday, the lowest daily figure since Feb. 24. The metric has dived out of an uptrend.

"After peaking on March 12, the net daily emissions appear to be decreasing as the demand for the network increases," IntoTheBlock said in a broadcast on the Telegram messaging app. "ETH has not had a deflationary day since Feb. 2, but this might change soon."

A continued decline in the issuance could accelerate ether's rally. The cryptocurrency has risen nearly 40% to $3,470 in two weeks, thanks to optimism surrounding the impending merge of Ethereum's proof-of-work and proof-of-stake chains.

"The approach of Ethereum’s merge is galvanizing interest in the potential impact on ETH’s price," Noelle Acheson, head of market insights at CoinDesk's sister company Genesis Global Trading, said in an email.

Ether's pace of supply expansion has slowed since the Ethereum Improvement Proposal (EIP)-1559 was implemented in August. The upgrade introduced a mechanism to burn a portion of fees paid to miners. Since then, more than 2 million ETH – worth over $5.78 billion – have been destroyed, leading to a net supply reduction of 65.2%, according to data source Watch the Burn.

Ether's net daily issuance dives out of uptrend, signaling higher supply conditions ahead. (IntoTheBlock)
Ether's net daily issuance dives out of uptrend, signaling higher supply conditions ahead. (IntoTheBlock)


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Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Parikshit Mishra

Parikshit Mishra is CoinDesk's Deputy Managing Editor responsible for breaking news coverage. He does not have any crypto holdings.