First Mover Americas: Bitcoin Up 3% After Wild Ride on 'Fed Rate Day'

• Prices Point: Bitcoin is up 3.3% on the day, roughly back to the level it was early Wednesday before the Fed announced it will raise its benchmark rate by 0.75 percentage point.
• Market Move: The XRP token has rallied sharply this month on the anticipation of a resolution of an SEC lawsuit against Ripple, XRP's issuer.
• Chart of the Day: The U.S. Treasury yield curve is now at its most inverted point in four decades.

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Price Point

Bitcoin (BTC) was up 3.3% Thursday at around $19,100 – roughly back to where it was early Wednesday before a wild 24 hours of price swings that spanned the Federal Reserve’s latest announcement that it will continue its campaign of aggressive interest rate hikes.

The Fed’s rate moves have been pushing up the dollar’s value in foreign-exchange markets, and now cracks are starting to appear: Japan announced its first currency intervention in more than two decades to shore up the yen. Meanwhile, Switzerland, Norway and the U.K. all raised borrowing costs in the wake of the Fed’s decision.

Tighter monetary policy, in general, is seen as weighing on prices of risky assets like bitcoin. But it’s possible that the dire scenario is already priced into the market.

"Even if central banks tighten monetary policy further, the situation will not worsen more, for the current performance of crypto assets is terrible enough,” Griffin Ardern, volatility trader from crypto asset management-firm Blofin, told CoinDesk’s Omkar Godbole.

Ether (ETH), the second-largest cryptocurrency, was gaining along with bitcoin, up 4.5% on the day to about $1,300. The broad CoinDesk Market Index was higher, led by Algorand’s ALGO with a 12% gain over the past 24 hours.

In the news, community members of the crypto-powered wireless project Helium voted to ditch their own blockchain and instead move operations onto the Solana blockchain under a plan to save resources.

The crypto exchange FTX, which is led by billionaire Sam Bankman-Fried, is reportedly in discussions to raise up to $1 billion in capital at a $32 billion valuation.

CoinDesk Market Index

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.

Market Moves

As XRP Rallies, Some Traders Buy Year-End Bullish Bets in the Options Market

By Omkar Godbole

Payments-focused cryptocurrency XRP has rallied sharply this month, outshining larger cryptocurrencies. Some traders are snapping up bullish bets in the options market in hopes of continued gains into the year end.

The cryptocurrency, ranked fifth by market value, traded at 42.6 cents at press time, a 28% gain for the month, according to CoinDesk data. Market leaders bitcoin and ether were down 4.5% and 17%, respectively.

"We have seen interest in buying XRP year-end upside call options in anticipation of a resolution in the ongoing lawsuit with the U.S. Securities and Exchange Commission," Dick Lo, founder and CEO of Hong Kong-based quant trading firm and liquidity provider TDX Strategies, said.

A call is a derivative contract giving the purchaser the right but not the obligation to buy the underlying asset – in this case, XRP – at a predetermined price on or before specific expiry date. A call, therefore, is preferred by bullish speculation, while a put option represents a bearish bet.

Read the full story here.

Chart of the Day

U.S. Yield Curve is Collapsing

By Omkar Godbole

The U.S. Treasury yield curve is now at its most inverted point in four decades, with the spread between yields on the 10 and two-year Treasury notes sliding to -0.52%.

• "The yield curve screams economic slowdown but also validates Powell's hawkish credentials," Ilan Solot, a partner at Tagus Capital, wrote in the daily market update, referring to Fed Chairman Jerome Powell.
• The relentless curve inversion could only add to the dollar's ongoing bullish momentum and make matters difficult for risk assets, including cryptocurrencies.
• The 90-day correlation coefficient between the dollar index and the yield curve was -0.8 at press time, indicating a strong inverse relationship between the two.

Headlines

• Coinbase Completed $100M Transaction to Test Proprietary Trading, Wall Street Journal Reports: The exchange hired at least four Wall Street traders to form a group called Risk Solutions to use the firm's own cash to trade crypto.
• S. Korean Watchdog Says $7.2B Transferred Overseas Mainly Through Crypto Exchanges, Bloomberg Reports: The majority of the transfers were in U.S. dollars and most of the funds were transferred to Hong Kong, according to the report.
• EU Project to Fight Fakes Succeeds By Being Open, Founder Says: A publicly backed blockchain project to stop counterfeit goods from entering the European Union is trying to avoid mistakes of the past, its founder told CoinDesk.