First Mover Americas_ TRON outperforms BTC, and crypto takes a leading role in DAVOS

First Mover Americas_ TRON outperforms BTC, and crypto takes a leading role in DAVOS

The latest movements in the crypto markets in the context of May 24, 2022.

Good morning and welcome to First Mover. I'm Lyllah Ledesma, here to guide you through the latest crypto markets, news and insights.

  • Price Point: Bitcoin and Ether trading down as Tron TRX trading in the green.
  • Market Movements: Despite recent price moves, Bitcoin traders remain fairly unfazed, with data showing that the number of addresses holding for more than 1 year is at an all-time high.
  • Feature: From DAVOS: Cryptocurrencies took a prominent role at the World Economic Forum's annual meeting in Davos, despite the mainstream financial world's apparent disdain for the sector.

Price Point.

Bitcoin (BTC) fell 3.9% during the day, trading between $28,000 and $30,000.

Ethereum fell 4.8% during the day to $1,900.

Most altcoins lost ground overnight, with Fantom's FTM posting the largest loss among the top 20 coins. In the last 24 hours, FTM has fallen 13.7%.

Tron, a multi-purpose smart contract blockchain, was one of the only gainers today. Its TRX token is up 6% on the day and has gained 12% in the last 7 days. The platform's price increase came after the announcement of a $10 million incentive fund to support Terra developers who switch to the Tron ecosystem.

In traditional markets, stocks and futures slipped. Dow Jones futures fell 0.6%, while S&P 500 futures lost 1%. The dollar was little changed. The euro rose to a one-month high ($1.07) after European Central Bank President Christine Lagarde said interest rates in the euro zone are likely to be in positive territory by the end of the third quarter.

Market Movements.

Despite the recent price movements in the crypto market, bitcoin traders have remained fairly unimpressed as the number of addresses holding more than 1 year is at an all-time high.

According to data from IntoTheBlock, there are now 27.65 million addresses holding Bitcoin for longer than 1 year, which is equivalent to about 12.66 million BTC.

Bitcoin's Stock-to-Flow Ratio

The stock-to-flow (SF) model, popularized by a pseudonymous Dutch institutional investor operating under the Twitter account "PlanB," is a forecasting tool that some investors use for the Bitcoin price.

This model compares circulating BTC supply (inventory) to expected production of new supply (flow) to obtain an inventory-to-flow ratio; a high ratio means a commodity is becoming more scarce and valuable.

According to Kraken Intelligence, comparing the price of BTC to the inventory-to-flow ratio has paralleled the price of BTC over the years.

"The price of BTC deviates less and less from its ratio, which is a 365-day average. When the price is above the stock-to-flow ratio, the divergence is positive (>1), and BTC can therefore be considered overbought," Kraken Intelligence said in its weekly report.

The multi-colored line indicates the number of days until the next halving of the bitcoin price, i.e. until the mining reward for a new block is halved. This drop in new coins (flow) drives up the ratio of BTC, which means BTC is scarcer and more valuable, according to Kraken.

Bitcoin's next halving is still 705 days away. The block subsidy will drop from 6.25 to 3.125 per block.

It is worth noting that the SF model relies heavily on the assumption that the scarcity of the cryptocurrency should increase its value, which may not always be the case. This is especially true because of the notoriously volatile short-term fluctuations in the bitcoin price.

Last Headlines.

  • Bitcoin Posts Eighth Week of Losses, but Sentiment Indicator Points to Upside Sentiment indicators hit a "bottom" on Monday, while a prominent fund manager called for a retest of 2019 price levels.
  • Wall Street says Fed digital dollar spells doom for banks The Federal Reserve is considering adopting a CBDC like other countries, and bankers argue it's a dangerous idea.
  • ECB warns crypto risks could spill over into economy Given the increasing risks of cryptocurrencies, it is important to urgently include them in the regulatory framework, the European Central Bank said in a report.
  • Coinbase enters Fortune 500 list of largest U.S. companies The first crypto company to make the list, Coinbase reported revenue of more than $7.8 billion in fiscal 2021 and ranked 437th.

Feature: In Davos, crypto is no longer just a fringe topic

By Sandali Handagama, Helene Braun

DAVOS, Switzerland - Even on the trains, there's no getting away from crypto.

The annual meeting of the World Economic Forum (WEF) - canceled in 2021, brought forward in 2022 - opens with a ceremony Tuesday in Davos, Switzerland. Cryptocurrency advocates kicked off the parties Sunday with bitcoin pizza stands and blockchain pavilions with eye-catching banners lining the famous promenade.

WEF attendees were bombarded with signs advertising stablecoin issuer Circle and crypto broker Bitcoin Suisse as they stepped off planes in Zurich or trains in Davos. Casual passersby talked about owning Shiba Inu and Cardano. At the end of the day, the cryptocurrency specialists dispersed to one of the nearby AirBnBs.

"Five years ago, we were the only crypto company on the boardwalk," said Sandra Ro, CEO of the Global Blockchain Business Council (GBBC), at a kickoff party at a local church (called "The Sanctuary") just outside the locked conference venue. "And look at it now," she added.

Perhaps nothing heralded the arrival of the turbulent crypto industry at the world's largest business table more than the fact that the WEF itself is having serious discussions about digital money, with industry participants as key players.

Jeremy Allaire, chairman and CEO of Circle Pay, and Brad Garlinghouse, CEO of Ripple, sat side by side Monday to discuss remittances and digital money at a briefing in the WEF media village. The panel, titled "Remittances for Recovery: A New Era of Digital Money," also featured Asif Saleh, executive director of BRAC, a Bangladesh-based development non-governmental organization.

The forum also included discussions about the future of the global economy, the U.S. economy and digital central bank currencies (CBDCs) themselves. That doesn't mean the forum's leaders are already accepting cryptocurrencies - but they're not ignoring them.

Link to full story: At Davos, crypto is no longer on the sidelines

Today's newsletter was edited by Lyllah Ledesma and produced by Parikshit Mishra and Stephen Alpher.