Good morning. Here’s what’s happening:
Prices: Ether and dogecoin declined following latest Fed rate increase; bitcoin fell more moderately.
Insights: Arbitrum's on-chain metrics, including weekly transactions, weekly active users and total value locked are soaring.
Crypto Prices Fall After Rate Hike
By James Rubin
The U.S. Federal Reserve raised interest rates a widely anticipated 75 basis points for the fourth consecutive time.
Ether, dogecoin and other major altcoins didn't like the sound of that, and tumbled well into the red Wednesday afternoon.
Bitcoin fell more moderately.
ETH, the second-largest cryptocurrency by market capitalization, was recently trading a few fractions above $1,500, down more than 4% over the past 24 hours but right around its perch of the past week. DOGE was recently down about 10%, returning some of its recent, dramatic gains. The popular meme token was still trading above 12 cents, near its highest point in more than six months.
Meanwhile, BTC continued to hover over its most recent $20,000 support line, down 1.8% from Tuesday, same time, despite rising investor interest. CoinDesk analyst Glenn Williams noted on Wednesday that the crypto winter had given bullish investors an opportunity to accumulate bitcoin at a favorable cost basis. "Larger crypto investors are continuing to explore this opportunity," Williams wrote, adding: "Whether asset managers are picking the right price point to go long will play out over the next 12 months, but they appear to be ahead of the curve."
The CoinDesk Market Index declined about 2.5%.
Meanwhile, major equity markets plunged following the Fed’s announcement, with the tech-heavy Nasdaq off 3.3% and the S&P 500 and Dow Jones Industrial Average (DJIA) off 2.5% and 1.5%, respectively. Investors remain concerned about the central bank’s strategy to combat rising prices, and the prospect of a harsh recession. Safe haven gold sank 0.7%.
In an interview with CoinDesk TV's "First Mover" program, Nischal Shetty, co-founder of Indian crypto exchange WazirX, said he "wouldn't be surprised if we see downward pressure on prices," although he was upbeat about bitcoin's recent tenacity. "Bitcoin seems to be holding strong at $20,000; that's an important point," he said.
Arbitrum Is More Than Hype, According to On-Chain Data
By Shaurya Malwa
Crypto traders and investors are increasingly seeing the Arbitrum ecosystem as a likely spot for capturing returns along the lines of the 100-times-plus multiples sometimes witnessed in prior bull-market cycles.
The Ethereum-based scaling product, which allows traders to transact on the blockchain network for under a few cents in fees and transacting times of a few seconds, is among a flurry of blockchain networks that launched in the past year – each promising to be faster and cheaper than the previous one.
On-chain data shows Arbitrum is not all hype. Since August, weekly transactions on Arbitrum have skyrocketed over 550%, with the Arbitrum network now commanding more than 62% of the weekly transactions on Ethereum.
The total value locked (TVL) on Arbitrum has increased by over $400 million in the past few months, data from DeFiLlama shows, with the ecosystem now holding over $1 billion. Popular trading tool GMX accounts for 43% of all this TVL.
Weekly active users on Arbitrum have also spiked in the past two weeks, analysts at research firm Delphi Digital said in a report this week.
“Since Oct. 10, weekly active users have grown 125% to reach a new all-time high of 282K, even surpassing numbers recorded during the Arbitrum Odyssey event,” they said, referring to a week-long initiative held in July meant for users to explore the Arbitrum ecosystem with exclusive non-fungible tokens (NFT) as rewards.
Delphi analysts added that much of the ongoing activity was also “likely from speculators trying to boost their on-chain activity in the hopes of receiving a larger airdrop.”
“Users could also be taking advantage of the various yield farming opportunities offered by protocols on Arbitrum,” they further added.
Arbitrum developers had not announced any tokens, or even plans for any tokens, as of Wednesday. But rumors and anticipation of a potential developer is sometimes all you need to excite degens in crypto land.
8:30 a.m. HKT/SGT(00:30 UTC) Australia Trade Balance (MoM/Sept)
8:00 p.m.HKT/SGT(12:00 UTC) Bank of England Monetary Policy Report
10:00 pm.m HKT/SGT(14:00 UTC) United States ISM Services PMI (Oct)
Deribit, the largest cryptocurrency options exchange in the world, has paused withdrawals after losing $28 million in a hot wallet hack. Deribit Chief Commercial Officer Luuk Strijers joined "First Mover" to discuss what happened and how clients are affected. Plus, how will the crypto markets react as investors await a key interest rate decision from the U.S. Federal Reserve? WazirX co-founder Nischal Shetty joined to discuss.
Dogecoin Above 200-Day Moving Average by Most Since June 2021: While the meme coin has crossed into what technicians view as bullish territory, chasing the rally may be risky, according to a chart analyst.
Crypto Investor a16z Wants to Join Ooki DAO Defense Against CFTC: Andreessen Horowitz is just the latest entity looking to argue the commodities regulator must serve its lawsuit against individual members of the DAO, not the DAO itself.
Digital Currency Group Promotes Mark Murphy to President, Cuts Nearly 13% Staff, Bloomberg Reports: Around 10 employees left the Connecticut-based firm, bringing its headcount to 66. DCG is the parent company of CoinDesk, as well as digital asset manager Grayscale Investments and crypto brokerage Genesis Trading.
What to Expect From Ethereum’s Next Big Upgrade: “Shanghai” will make it possible to withdraw staked ETH, but a long-wished-for pathway to lower gas fees might be missing from the update.
Aave Community Members Vote to Deploy on zkSync v2 Testnet: The decision will let developers evaluate whether to fully deploy its decentralized exchange on the layer 2 scaling platform that speeds up Ethereum transactions.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.