Bitcoin settles below $29.5,000 as appeal for less risky assets

Good morning. Here’s what happens:

Prices: Bitcoin falls below $29.5,000 as investors’ appetite for riskier assets diminishes.

Insight: Which crypto projects solve particularly important problems? Consensus Magazine presents 19 bears to watch in 2023.

Is Bitcoin entering new territory?

After a one-week rally above $30,000, bitcoin dipped below the psychologically important threshold.

The largest cryptocurrency by market capitalization recently traded at around $29,400, a decrease of approx. 1.9% in the last 24 hours. BTC fell below $29,300 at a time when the banking crisis eased, government yields rose and investors shied away from riskier assets.

“Crypto is losing some appeal as the risk of banking crises appears to be disappearing,” Edward Moya, senior analyst at forex market maker Oanda, wrote in an email. “Fed lending to banks continues to ease and earnings have not revealed any major strains with the early banks reporting. Also dampening the appeal of crypto is the rise behind Treasury yields, which dampens the appeal of most risky assets.

Moya noted that a number of major banks reported solid earnings in the first quarter, including Wells Fargo and Citigroup, and that “distressed loans are easing.”

“The mid-sized and small banks are reporting, and while we are seeing some serious deposit outflows, the focus is not on bank soundness, but on bank profitability,” Moya wrote.

Ether recently changed hands at around $2,075, by the better part of a percentage point. The second-largest crypto by market capitalization has yet to see many negative effects from the recent Ethereum Shanghai upgrade, the latest step in the blockchain platform’s transformation from a proof-of-work to a more energy-efficient proof-of-stake protocol.

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Other major cryptos were in the red, albeit slightly. ARB, the token of the layer 2 Ethereum scaling protocol Arbitrum, and ADA, the native crypto of the Cardano blockchain, both recently fell by about 3%. The CoinDesk Market Index, a measure of the crypto markets’ overall performance, was recently down 1.6%.

Stock markets rose as investors chewed over encouraging bank earnings and the possibility that the US Federal Reserve may continue to raise interest rates to curb inflation. In last month’s near-bank meltdown, that prescription seemed less likely. Meanwhile, the 10-year Treasury yield has risen three days in a row to 3.59%, while gold, which a week ago neared its record high, has dipped to just above $2,000.

Oandas Moya was wary of bitcoin’s near future path forward. “Bitcoin looks set to consolidate, possibly settling into a new range between the $26,500 and $31,000 region,” he wrote.

Crypto innovation thrives: Here are 19 projects to watch

For the past three years, the Pew Research Center has been asking Americans about their exposure to cryptocurrency. The percentage of people who have ever invested in, traded, or used a cryptocurrency like bitcoin or ether has remained roughly 16% since 2020. But this spring, Pew sought to identify how people feel about crypto. Among the 88% who have ever heard of cryptocurrency, 75% are “not or not at all sure that cryptocurrencies are reliable or safe.” Only 6% are very confident.

Trust in crypto is very low.

The CoinDesk editors didn’t need a poll to see this. Our most influential 2022 list, published in December, subjectively identified the 50 people who defined the year in crypto. A significant percentage of the list were bad stories about scammers and hucksters and possible sociopaths draining customers’ savings. The list came out less than a month after the sudden and shocking collapse of FTX, ending a year of scandals. Understandably, in response, Congress, the mainstream media, and the public are ready to punish crypto.

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To state the obvious, 2022 was the antithesis of crypto, which was invented in 2009 as a remedy for broken global financial systems and not to make sharks and charlatans rich. Bitcoin made peer-to-peer transactions possible, without banks making transfers slow, costly and intrusive. By solving the trusted intermediary problem, bitcoin allowed transactions to be faster and cheaper and therefore more accessible.

The CoinDesk team set out to find projects that fulfill the ethos of crypto by solving a problem. In brainstorming sessions, we discussed what problems crypto could be used to solve, which quickly split into two baskets: problems within the crypto ecosystem itself and problems in the world in general.

The team then explored the merits of projects aimed at solving the identified problems. From a list of more than 35 projects, we chose 19. Some haven’t launched yet, others have been around for years. Funding ranges from boots in the tens of millions of dollars, to undisclosed support from a parent foundation or project. We have not set many limitations or parameters on these projects. Crypto organizations come in many forms (from traditional startups to DAOs to large corporations). It’s still relatively new and many of the brands – although valued in the billions of dollars – are not widely recognized.

What the CoinDesk team was looking for are innovative ideas, compelling propositions or evidence of success, and talented, committed people. In addition, the problems the projects aimed to solve had to be real, and the necessary solutions. They can’t just be a crypto version of something adequately managed in traditional finance, for example, or purely meant for speculation or fun.

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Read the full article here:

Ether (ETH) withdrawals topped 1 million tokens on Sunday night, even as prices hit an 11-month high, following the recently implemented Shapella upgrade. Galaxy Digital Vice President of Research Christine Kim and K33 Senior Analyst Vetle Lunde participate in the conversation. Additionally, SEC Commissioner Hester Peirce discusses the future of decentralized finance (DeFi). And Lamina1 CEO Rebecca Barkin shares her insights on what the metaverse might look like in the next 10 years.

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