First Mover Asia: Cryptos' Short Win Streak Ends as Investors Remain Cautious

ALSO: Shaurya Malwa writes that oversubscription of an initial exchange offering at Binance underscores investors' continued interest in crypto and may offer hope for the industry's rebound.

AccessTimeIconDec 2, 2022 at 12:52 a.m. UTC
Updated Dec 2, 2022 at 3:18 p.m. UTC
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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

James Rubin is CoinDesk's U.S. news editor based on the West Coast.

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Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Good morning. Here’s what’s happening:

Prices: Bitcoin and ether traded down slightly to break a three-day streak of gains, although the largest crypto by market value continued to change hands near $17,000.

Insights: An IEO at crypto exchange Binance shows that many investors remain high on cryptocurrencies, despite the ongoing bear market.

Prices

865.08
−10.4 1.2%
$16,984
−185.3 1.1%
$1,279
−10.1 0.8%
S&P 500 daily close
4,076.57
−3.5 0.1%
Gold
$1,815
+68.5 3.9%
Treasury Yield 10 Years
3.53%
0.2
BTC/ETH prices per CoinDesk Indices; gold is COMEX spot price. Prices as of about 4 p.m. ET

Bitcoin's Short Winning Streak Ends

By James Rubin

Crypto prices, which had been rolling this week, retreated on Thursday, underscoring investors' caution about the industry's fate, and the wider economy.

Bitcoin was recently trading just below $17,000, off 0.8% over the past 24 hours. The largest cryptocurrency by market capitalization had risen three consecutive days amid encouraging jobs and productivity data and hopes that the U.S. central bank was ready to scale back its hawkish monetary policy. On Wednesday, U.S. Federal Reserve Chair Jerome Powell had suggested in a speech at the Brookings Institute that the Fed might raise interest rates 50 basis points, down from its recent 75 basis points regimen.

But in the 36 hours since Powell's remarks, cryptos have been largely unimpressed by the prospect of increased liquidity and more concerned about contagion linked to crypto exchange giant FTX's collapse, not to mention other 2022 debacles still winding their way through courts.

"Cryptos are struggling," wrote Edward Moya, senior market analyst for foreign exchange market maker Oanda, in an email. "Concerns brew that Tether loans could be the next big risk for the cryptoverse. Stablecoins are an important part of the crypto world and if one of the major ones break, that will send bitcoin and [ether] to new lows."

Ether was holding steady at slightly under $1,300, down 1.2%. Other major cryptos were largely in the red, albeit lightly shaded, although popular meme coin DOGE recently dropped more than 4%. DOGE had climbed about 50% over an eight-day stretch starting Nov. 22. MATIC, the token of the layer 2 Polygon blockchain platform, was down more than 2% after rising the past couple of days at least partly on news that its application programming interface (APIs) would soon deploy on web3 indexing service, The Graph.

The CoinDesk Market Index (CDI), an index measuring cryptos' performance, slipped 1.26%.

Cryptos' day largely dovetailed with stocks' sluggish day as the Nasdaq and S&P 500 declined a few fractions of a percentage point. The Dow Jones Industrial Average rose slightly.

Moya noted that investors – crypto and otherwise – would be awaiting the release of nonfarm payroll data for the latest read on the U.S. job market, which has shown signs of cooling over the last few months. In November, private companies added only 127,000 jobs, according to payroll processor ADP, less than half the number in October.

Meanwhile, Pranav Kanade, portfolio manager for mutual fund and exchange-traded fund company VanEck, told CoinDesk TV's "First Mover" program on Wednesday that predicting where crypto prices bottom out would be difficult, although he struck an upbeat note about recent industry crises and market bearishness.

"When we look at one of the positives coming out of what just happened, you have seen a lot of investors withdraw assets into self-custody," he said, adding: "My guess is that anyone who's remaining in the ecosystem are likely true believers in the underlying technology and even the future upside of the asset class."

Biggest Gainers

Asset Ticker Returns DACS Sector
Loopring LRC +2.9% Smart Contract Platform
Terra LUNA +1.8% Smart Contract Platform
Chainlink LINK +0.6% Computing

Biggest Losers

Asset Ticker Returns DACS Sector
Solana SOL −3.0% Smart Contract Platform
Dogecoin DOGE −2.8% Currency
Stellar XLM −1.9% Smart Contract Platform

Insights

In Some Corners, Crypto Dreams Are Still Thriving

By Shaurya Malwa

What bear market?

Depending where you look, the crypto dream is thriving.

A recently concluded initial exchange offering (IEO) at crypto exchange Binance saw participants lock up over 9 million BNB, valued at over $2.7 billion, as they competed for the allocation of Hooked Protocol’s HOOK tokens.

The IEO, a fundraising event administered by an exchange, comes as crypto markets weather a year-long bear market that has been exacerbated by the implosion of multiple major projects, most recently crypto exchange giant FTX. Some tokens have lost as much as 95% of their value amid the contagion, and bitcoin, the largest cryptocurrency by market capitalization, has plunged more than 60%.

IEOs usually see users lock up a certain amount of that exchange’s native tokens for allocation in another token that would soon be traded on that exchange.

A total of 114,772 participants committed 9,010,765.2954 BNB during the subscription period, representing an oversubscription of 1,066x. Users would receive 139.44 HOOK to 13,944 HOOK based on the BNB they lock up. The BNB would be returned to users after HOOK is distributed – minus a predetermined fixed amount ranging from 0.4 BNB to 4 BNB.

Hooked Protocol builds the on-ramp layer for Web3 applications and bespoke "learn and earn" products. HOOK is the governance token of the ecosystem, and is used to access community events and exclusive NFTs, and for in-app purchases, including game tools, for dapps built on Hooked.

Hooked Protocol has raised over $6 million from two rounds of private token sales earlier this year and has a current valuation of $60 million. The total supply of HOOK is 500 million and the circulating supply upon listing will be 50 million.

Important events

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

The crypto community is reacting to Sam Bankman-Fried's New York Times interview in which he expressed regret over his exchange's collapse but stopped short of admitting fraud. Binance Chief Strategy Officer Patrick Hillmann joined "First Mover" to discuss the exchange's crypto industry recovery initiative. Also, MakerDAO founder Rune Christensen joined "First Mover" to talk about on the future of decentralized lending.

Headlines

US CFTC Commissioner Cites Latest Crypto Sanction in Call for New Rules: Commissioner Kristin Johnson is pushing for her agency to work on policies to further tighten custody of customer assets as the CFTC sanctions another crypto Ponzi scheme.

Magic Eden Launches Protocol to Enforce Creator Royalties: The top marketplace for Solana NFTs had moved to an optional creator royalty model in October.

Binance Exec Says Firm's 'Centralized Exchange' May Not Be Around in 10 Years: Chief Strategy Officer Patrick Hillman said the exchange may become obsolete because of the crypto industry's move toward decentralized finance.

FTX Collapse Highlights Need for Global Crypto Regulations, Says US Treasury’s Adeyemo, Reuters Reports: Deputy Treasury Secretary Wally Adeyemo said such regulations are important to ensure the protection of investors, consumers and financial stability.

Crypto Industry a Disaster in Need of Rebranding, UK Lawmaker Says: Lord Cromwell begs the industry to leave its "bad boats" to burn out at sea and ditch the word "crypto" following the FTX collapse.

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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

CoinDesk - Unknown

James Rubin is CoinDesk's U.S. news editor based on the West Coast.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


CoinDesk - Unknown

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

CoinDesk - Unknown

James Rubin is CoinDesk's U.S. news editor based on the West Coast.