Good morning and welcome to First Mover. I'm Brad Keoun, here to guide you through the latest crypto markets, news and insights. (Lyllah Ledesma is not here this week).
- Price Point: Bitcoin slipped back below $30K, in line with U.S. equity futures, after retail giant Target's latest earnings report provided fresh insight into how consumers are adjusting their spending habits due to inflation.
- Market Movements: A day after the Federal Reserve chairman pledged to tighten monetary conditions until inflation declines, analysts and traders from cryptocurrencies to stocks and futures assessed the economic impact - from higher mortgage rates to lower corporate profits, reports Shaurya Malwa.
- Feature: It's been a few months since the Ronin Network captured $625 million. Blockchain data shows that the cryptocurrency is moving on Tornado, an on-chain private sphere exchange that would supposedly help disguise its origin.
Price point
Bitcoin fell below $30,000 in European hours on Wednesday amid a decline in traditional markets as traders and analysts assessed the potential economic impact of Federal Reserve Chairman Jerome Powell's pledge on Tuesday to tighten financial conditions until inflation shows signs of slowing.
Bitcoin's slide in recent days is preparing it to extend a seven-week losing streak that is already the longest in trading history, dating back to the early 2010s. The cryptocurrency has suffered from the downturn in broader markets, stricter crypto regulations, waning retail interest and systemic risks in the crypto sector.
Major cryptocurrencies followed Bitcoin's slide over the past 24 hours. Polkadot's DOT lost as much as 6%, while Avalanche (AVAX), bnb tokens (BNB), XRP, and Ether lost 2.2%. Tron (TRX) was among the few in the green, driven by positive sentiment around its ecosystem stablecoin USDD.
In traditional markets, U.S. stocks were set for declines on Wednesday due to the direction of futures trading, with weakness following a disappointing earnings report from Target sending shares of the retail giant plunging more than 22%.
Inflation is forcing consumers to spend more on groceries and less on discretionary items, MarketWatch reported.
Market Moves.
By Shaurya Malwa
With bitcoin now regularly trading in lockstep with U.S. equities, what's happening in traditional markets and the steady-state economy is affecting cryptocurrencies as well.
Higher interest rates typically negatively impact the profits of companies that borrow money to run their businesses. In addition, as interest rates on consumer loans such as mortgages also rise, households have less disposable income, which in turn affects the economy as a whole.
Although such scenarios can take months to play out, stock traders are already pricing in expectations of lower earnings, leading to a drop in stock valuations. On Wednesday, for example, U.S. futures on the S&P 500 fell 0.4%, while the technology-heavy Nasdaq slipped 0.6%. European markets showed nominal moves as Germany's DAX rose less than 0.1% while the Stoxx 600 slipped 0.1%.
Such market moves come after the Fed Powell said Tuesday that the agency remains committed to reducing inflation concerns and could use "aggressive" measures to ensure a strong economy.
"What we need is a clear and convincing decline in inflation, and we will continue to push for that until we see it," Powell said at a Wall Street Journal event. "Achieving price stability, restoring price stability, is an absolute necessity. Something we have to do because without price stability, the economy doesn't work for workers or for businesses or for anybody."
Bitcoin has traded much like a risky tech stock in recent months, with correlations with the S&P 500 reaching nearly 1:1. Some market observers suggest there could be another correction if current market conditions continue.
"The markets have been expecting the hikes for some time, and it looks like the expectations are already showing on the charts," Anton Gulin, regional director at crypto exchange AAX, said in a Telegram message. "Bitcoin and Nasdaq movements have also been quite correlated for a few months."
Last Headlines.
- Do Kwon pushes on-chain proposal live even as 92% vote "no" in online poll The plan to get Terra back on track after last week's implosion went live this morning, but online poll results suggest the community is against the move.
- Swiss ETP issuer 21Shares dives into US market with 2 crypto index funds The new funds are the first crypto products for US clients and will only be available to accredited investors.
- Will proof-of-stake Ethereum lead to more centralization? Lido's staking protocol now holds 33% of all Ether deployed.
- Argo Blockchain Q1 Net Income Plunges 90% to $2.1M Bitcoin was priced in the $40,000 range for much of Q1 compared with nearly $60,000 in the same period a year earlier.
- USDC Hasn't 'Flipped' USDT, But Trader Preferences Are Changing A Glassnode analyst suggests the collapse of the UST token has triggered a change in investors' stablecoin preferences; Bitcoin is holding above $30,000.
Feature: Nearly 5,505 ETH, or $10M of the $625M Ronin exploit, is on the move.
By Shaurya Malwa
Addresses linked to the $625 million Ronin Bridge exploit show that more than $10 million worth of Ether was in motion in the Asian morning hours of Wednesday, blockchain data shows.
One address was funded by the Ronin exploiter this morning for 5,505 ether, with funds coming from another wallet funded directly by the exploiter's main address, blockchain data shows.
Starting in the early hours of Wednesday morning, the address sent Ether in batches of 100 to Tornado, an on-chain data exchange. The data shows that over 55 transactions were made.
Tornado improves transaction privacy by breaking the on-chain connection between a source and destination address. This allows exploiters and hackers to disguise their addresses while withdrawing ill-gotten funds.
Today's newsletter was edited by Brad Keoun and produced by Parikshit Mishra and Stephen Alpher.