First Mover Asia: Most Cryptos Stay Flat Like a Windless Lake, but a Popsicle Makes Waves.

Good morning. Here’s what’s happening:

Prices: The action was in Popsicle's ICE token as in mostly flat trading for crypto markets including bitcoin.

Insights:

Prices

The heat is elsewhere as bitcoin hibernates

By Brad Keoun

Cryptocurrencies were barely budging in early Asia hours, even after a decent day of gains in U.S. stocks on Wednesday.

The benchmark CoinDesk Market Index (CMI) of digital assets was down 0.3% over the past 24 hours. Bitcoin was trading flat, just above $16,800.

"Bitcoin isn't getting much of a boost from the positive risk-on environment that is running through Wall Street," Edward Moya, senior market analyst at the foreign-exchange brokerage Oanda, wrote Wednesday in a note.

The hot action was in the decentralized finance (DeFI) protocol Popsicle Finance's ICE token, which tripled over the past 24 hours after the controversial yet prolific blockchain developer Daniele Sestagalli said he was returning to the project after a hiatus.

Insights

Crypto has yet to cause a fiat financial crisis. Why the talk of bans?

By Sam Reynolds

Without a doubt, the digital asset industry is in the depths of a market that looks a lot like 2008. One could even say that the elaborate DeFi protocols with questionable collateralization accelerated the market decline, in the same way that exotic derivative vehicles like collateralized debt obligations (CDOs), made the 2008 crisis worse.

But the damage is limited to crypto. There’s no evidence to suggest that some form of contagion has materialized that has spread over to the TradFi markets. Certainly, macroeconomic factors like interest rates and the strength of the dollar have impacted crypto, but so far this is a one-way street.

The establishment sees it differently.

In a recent speech, India's central bank Governor Shaktikanta Das forecasted that the next financial crisis would start with crypto and thus, it should be banned.

"Our view is that it should be prohibited because if you try to regulate it and allow it to grow, please mark my words the next financial crisis will come from private cryptocurrencies," CoinDesk reported Das as saying. "They have no underlying value. They have huge inherent risks for our macro economic and financial stability. I am yet to hear any credible argument about what public good or what public purpose it serves."

Sherrod Brown, the United States Banking Committee chairman, had a similar argument during a recent appearance on Meet the Press but was able to (correctly) say that this would be difficult as it would simply force crypto to move entirely offshore.

The financial crisis that both are referring to is a loss of state control of money. This was also a theme in the white paper for China’s CBDC.

While India has liberalized capital controls in recent years, they still exist, and it maintains strict control over the nation’s money supply under the auspices of fighting inflation — which could be lethal for an emerging market with a large percentage of low-earners.

The U.S. doesn’t like crypto because it's a headache for its hegemonic ambitions. In a world that largely trades in dollars, U.S. control over the money supply means it can prosecute crimes when there is only a marginal connection to the country (see: Huawei, and BitMex).

For lawmakers in both countries, it would be easier if crypto just "went away." Even after a year where there was a trifecta of calamity — Luna, Three Arrows Capital, and FTX — bitcoin is still at $16,800, and the broader crypto market cap is just north of $800 billion.

Crypto has weathered the storm that macroeconomic events and black swans brought upon it. Although it continues to be in the crosshairs of regulators, its problems have yet to cross the chasm into TradFi. If they really want to ban crypto, they are going to need to try a bit harder.

Important events.

3:00 p.m. HKT/SGT(7:00 UTC) United Kingdom Gross Domestic Product (QoQ)

9:30 p.m. HKT/SGT(13:30 UTC) United States Gross Domestic Product Annualized (Q3)

7:30 a.m. HKT/SGT(23:30 UTC) Bank of Japan Monetary Policy Meeting Minutes

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Sam Bankman-Fried Reportedly Set for Extradition to the US; Justin Sun on Crypto Winter

"First Mover" covered the top stories in crypto, including Sam Bankman-Fried reportedly signing paperwork to begin the extradition process. Bernie Madoff's former attorney, Ira Lee Sorkin, weighed in. Plus, TRON founder Justin Sun discussed the chill of crypto winter as Core Scientific, one of the largest bitcoin miners, filed for bankruptcy. And Teddy Fusaro of Bitwise Asset Management provided his crypto markets outlook heading into the new year.

Headlines

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Metaverse-First Blockchain Lamina1 Launches Rolling Fund for Web3 Builders: The layer 1 blockchain is the brainchild of Neal Stephenson, who coined the term "metaverse" in 1992, and Peter Vessenes, co-founder of the Bitcoin Foundation.

Bernie Madoff’s Lawyer Says Sam Bankman-Fried Should ‘Shut Up': Ira Lee Sorkin, partner at law firm Mintz & Gold, discusses why he would’ve told the disgraced CEO to “keep his mouth shut” and not speak to various media outlets after the FTX exchange filed for bankruptcy protection.