This article was originally published in First Mover, CoinDesk’s daily newsletter. It puts the latest crypto market moves into context.

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Bitcoin traded at just over $42,000 during the European morning , after Fed Chair Jerome Powell dampened hopes for an interest rate cut in March . “Having said this, confidence is growing, and Chair Powell has been open about communicating that a rate cut will be coming this year. “Nothing is surprising about any of this.” BTC fell as low as 41,870 dollars on Wednesday evening. It has since slowly climbed, but it is still a long way from the $43,000 it was at the beginning of this week. The CoinDesk 20 Index which measures the performance the top digital assets is down by around 1.1% over the last 24 hour.

In its annual Big Ideas Report, ARK Invest stated that the optimal allocation for crypto is under 20% . The Cathie Wood led firm noted, “Bitcoin has shown an annualized return well exceeding major asset classes over the past seven years. An optimal allocation will rise to 19.4% by 2023.” Our analysis shows that allocating 19.4% of a portfolio to bitcoin in 2023 maximizes the risk-adjusted return. The optimal allocation in 2015 was 0.5% and in 2022 it was 6.2%. Bitcoin’s low correlation with traditional assets of 0.27 over the past five years highlights its diversification advantages. Even minimal allocations from institutional investors can have a significant impact on its price given that there are $250 trillion worth of investable assets worldwide.

Cryptocurrency lending Celsius distributes $3 billion worth of crypto to its creditor when it emerges from bankruptcy. This crypto will be distributed through Coinbase and PayPal. Creditors will receive a share of Ionic Digital Inc., a newly formed mining operation that is expected to be listed on the stock exchange, subject to approval by regulators. In the bankruptcy proceedings, Celsius also reached a settlement of $4.7 billion with U.S. Authorities in relation to accusations of fraud made by its former CEO Alex Mashinsky. Mashinsky’s assets in banking and real-estate were frozen by a court after he was released with a bond of $40 million. His trial is set for September 2024.

Chart of the Day

COD FMA, Feb. 1 2024 (Velo Data)(Velo Data)

  • The chart below shows the change in the cumulative volume delta (CVD), over a 24-hour period, in the futures and permanent futures that are tied to the 25 most valuable cryptocurrencies based on market value.
  • The CVD for the majority of coins has been negative, except for BTC. TRX, ATOM, and XMR. This indicates a net sales pressure.
  • The Federal Reserve Chairman Jerome Powell, on Wednesday, pushed back at bets that the U.S. would cut rates as early as March. This sent the dollar index up to its highest level in seven weeks.
  • Source: Velo Data

Omkar Godbole

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Sheldon Reback is the editor.