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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Crypto market began the week with losses. Solana’s SOL, and Cardano ADA, which have both dropped 5% over the past 24 hour, led the way. The CoinDesk 20 index, a liquid indicator of the most traded tokens, has also fallen 2.86%. Some traders expect the price to drop to as low as $38k in the next few weeks. This could cause further losses for other cryptocurrencies. According to some analysts including Bloomberg’s Eric Balchunas, recent downward pressure on Bitcoin has been attributed by sales from Grayscale’s GBTC bitcoin ETF. Other newly approved bitcoin exchange-traded funds are experiencing net inflows. Data tracked by CoinGlass indicates that BlackRock’s IBIT ETF and Fidelity’s FBTC crossed $1 billion in last week. This is indicative of buying pressure.

Data from CoinGecko shows that trading volumes for both tokens increased by 200% over the weekend, even though broader crypto volumes remained relatively lower amid little volatility. CoinGecko’s data shows that trading volumes for both tokens increased by 200% during the weekend. However, overall crypto volumes were relatively lower due to little volatility. Open interest in futures that track the tokens increased to $430 million cumulatively from $200 million. This is indicative of increasing bets. The broader market was under pressure during the European morning hours. Both were down more than 5% for the day.

Terraform Labs has filed for bankruptcy. The firm, which developed the failed stablecoin TerraUSD, that collapsed in 2022, had assets between $100 and $500 million, but also liabilities of the same amount. Terraform Labs stated that the filing would allow TFL execute its business plan and navigate ongoing legal proceedings including representative litigation in Singapore as well as U.S. litigation. TQ Ventures is a U.S. based digital assets fund and Standard Crypto is a San Francisco based venture fund.

Chart of the Day

COD FMA Jan. 22 2024 (Coinbase, Coinmetrics, Bloomberg)(Coinbase, Coinmetrics, Bloomberg)

  • The chart below shows the difference between the bitcoin and ether CME Futures and spot prices for the two cryptocurrencies.
  • The premium on bitcoin futures is now less than 0.5%. This is a significant drop from the high of more than 4% for the entire year, which was seen just before the launch of 11 spot ETFs (Exchange Traded Funds) in the U.S.A. in January. Ether futures are following the lead of bitcoin.
  • Early this month, traders may have bought cryptocurrencies while simultaneously selling futures to take advantage of the premium. This, along with a shakeout of leverage after the debut of ETFs, likely drove down the premium.
  • Source: Coinbase, Coinmetrics, Bloomberg

Omkar Godbole

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Omkar Godbole is the editor.