Bitcoin Surges Above $20,000 As Investors Get Optimistic That Steep Interest Rate Hikes Will End Soon
Crypto and other markets reacted positively to a surprisingly large drop in US job vacancies, providing the latest evidence of an economic slowdown.
Good morning. Here’s what happens:
Prices: Bitcoin, ether and other cryptos spend another day in the green.
Insight: The SEC’s settlement with mega-influencer Kim Kardashian is a warning to the crypto industry, as CoinDesk columnist Daniel Kuhn noted in Tuesday’s edition of Node. (First Mover Asia writers Sam Reynolds and Shaurya Malwa are gone.)
Prices
- Bitcoin (BTC): $20,209 +3.1%
- Ether (ETH): $1356 +2.5%
- CoinDesk Market Index (CMI): $986 +2.4%
- S&P 500 daily close: 3,790.93 +3.1%
- Gold: $1,732 per troy ounce +2.3%
- Ten-year Treasury yield daily close: 3.62% −3e+1
Bitcoin, Ether and Gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the spot price for COMEX. Information on CoinDesk indices can be found at coindesk.com/indices.
Bitcoin spends the day back above $20,000
By James Rubin
Say hello to $20,000 again.
Bitcoin rose sharply for the second day in a row and recently traded at around $20,200, up more than 3% in the last 24 hours and the highest level in a week. The biggest cryptocurrency by market capitalization has crossed the psychologically important threshold several times over the past month, but failed to hold amid investor concerns about inflation and the prospect of a severe recession.
On Tuesday, markets reacted positively to a surprise drop in job openings in the Job Openings and Labor Turnover Survey (JOLTS), which gave hope that the economy was slowing enough for the US Federal Reserve to reverse course on steep interest rate hikes for the time being. – for the distant future.
Ether recently changed hands above $1,350, up more than 5% from the previous day at the same time. Other major altcoins spent much of the day in the green with DOGE rising more than 10% after Elon Musk, a champion of the popular meme coin, indicated he would be willing to follow through on his original proposal to buy it the social media platform Twitter. SHIB, a meme coin with a similar dog theme, and LINK climbed over 4% and 5% respectively.
The CoinDesk Market Index (CMI), a broad-based market index that measures performance across a basket of cryptocurrencies, recently rose 2.4%.
Stock markets continued their buoyant week so far with the technology-focused Nasdaq and the S&P 500, which has a strong technology component, jumping 3.3% and 3.1% respectively, and the Dow Jones Industrial Average (DJIA) rising 2.8%. Investors reacted positively to an unexpectedly small rate hike by Australia’s central bank and the JOLTS reading that suggested the hot job market was finally losing steam. Torrid jobs figures have worried US central bankers looking for signs of an economic downward trend.
The price of Brent crude, a widely watched measure of energy markets, traded roughly flat but still hovered above $91 a barrel, and investors will watch Wednesday’s report from the Organization of the Petroleum Exporting Countries (OPEC), which is expected to cut. supplies. Bond yields and the dollar, which recently rose to multi-year highs, fell again.
Bankrupt crypto lender Celsius Network’s troubles continued with the firing Tuesday of co-founder and Chief Strategy Officer S. Daniel Leon. He now follows former CEO Alex Mashinsky, who left the company last week. Celsius filed for Chapter 11 bankruptcy protection in New York in July, and is now facing an inquiry from an investigator appointed by the U.S. Trustee’s office and authorized by the Bankruptcy Court for the Southern District of New York.
And Japan’s plans to expand its digital presence will include non-fungible tokens (NFTs) and metaverse services, Japanese Prime Minister Fumio Kishida said in a policy speech on Monday.
In an email to CoinDesk, Mark Connors, principal researcher at Canadian digital asset firm 3iQ, wrote that despite this month’s early gains across risk assets, markets remain unsettled. Connors called the S&P 500’s 5.3% October gain “price action…more indicative of an option or a warrant than a stock index of $32B+ large companies,” and said the volatility of currencies and Treasuries was “even more unusual.”
“The low volume, highly leveraged currency and fixed income assets show the highest relative volatility,” he said, adding: “What you do NOT see is unusual movements in BTC or ETH. This is because monetary policy causes problems in the fiat-based pipeline. . Asset prices are falling too quickly.”
“This story is far from over.”
Biggest winners
| resource | Ticker | Returns | The DACS sector |
|---|---|---|---|
| Dogecoin | DOGE | +10.1% | Currency |
| Chain link | LINK | +5.8% | Data processing |
| Terra | LUNA | +5.1% | Smart contract platform |
Biggest losers
There are no losers in the CoinDesk 20 today.
Insight
Kim Kardashian, EthereumMax and the SEC’s Publicity Grab
By Daniel Kuhn
On Monday, before the market opened, the US Securities and Exchange Commission (SEC) announced it was settling celebrity influencer Kim Kardashian for $1.26 million related to her paid endorsement of a cryptocurrency called EthereumMax. Just like when Kardashian first shilled the token in June 2021 (and failed to disclose the $250,000 she was paid to do so), the news begs the question… why? Why did Kardashian get involved in the first place, and why is the SEC fining her now?
The SEC, under Chairman Gary Gensler, wants to send a message: Celebrities should think twice before endorsing cryptocurrencies. Kardashian, a celebrity who has built her reputation on being famous as well as ubiquitous, is a high-profile target. With a federal agency consistently underfunded going after this big target, the settlement serves as a warning to the crypto industry at large.
Influencers are ‘easier to pick out’ than token issuers: Former SEC officer on Kim Kardashian
But the news also comes amid a deep market rout, with each day bringing more news about crimes swept under the rug during a FOMO-fueled market rally during the COVID-19 pandemic. Three Arrows Capital, once believed to be one of the smartest hands in the game, was found to have built its fortune mainly by rehypothecating borrowed funds. Alex Mashinsky, the founder and former CEO of bankrupt “neo-bank” Celsius Network, was just found to be taking funds from Celsius.
Figures like Mashinsky and Three Arrows Kyle Davies and Su Zhu promised much more than Kardashian and other celebrity crypto endorsers ever could. Celsius’ unofficial slogan was “deny yourself.” The Three Arrows hedge fund operated under the idea of an unstoppable crypto “supercycle”. Until the firm imploded under the weight of bad debt and bad games, Celsius promised users a return of up to 20% on their crypto holdings. Mashinsky now sells T-shirts that say “Unbankrupt Yourself.”
Read the whole story here.
Important events
08:30 HKT/SGT(12:30 UTC): Jibun Bank Services PMI (Sept.)
9am HKT/SGT(1am UTC): Reserve Bank of New Zealand interest rate decision and statement
16:00 HKT/SGT(08:00 UTC): OPEC meeting
