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Market Wrap: Bitcoin Snaps Five-Day Losing Streak; Even Traders See More Hawkish Fed

Jimmy He - Coindesk
2022-07-14 02:04
Hi, I'm Jimmy He, here to take you through the day's crypto market highlights and news.
Bitcoin (BTC) saw price fluctuations in Wednesday morning trading after the U.S. consumer price index (CPI) showed June inflation hitting a 40-year high of 9.1%, overshooting expectations of 8.8%.
The largest cryptocurrency by market capitalization fell 4.5% in the minutes after the CPI was released, dropping to a 10-day low of $18,919. BTC has since climbed back, up 2% over the past 24 hours and trading at around $19,700.
Core inflation, which removes the CPI’s more volatile food and energy components, slowed for the third straight month, dipping to 5.9% in June from 6% in May.
AAVE, the token of decentralized finance (DeFi) lending protocol Aave, led market gains and rose 13% over the past 24 hours. On Tuesday, the struggling crypto lender Celsius Network paid off its full debt to Aave, freeing up $26 million in tokens of collateral.
Ethereum (ETH) rose 4.4% over the past 24 hours.
The S&P 500 was down 0.1% and the NASDAQ was up 0.1%.

Latest prices

●Bitcoin (BTC): $19,717 +1.2%
●Ether (ETH): $1,079 +3.2%
●S&P 500 daily close: 3,801.59 −0.5%
●Gold: $1,731 per troy ounce +0.5%
●Ten-year Treasury yield daily close: 2.90% −0.05
Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Fed Futures Traders Now Betting on 100 Basis Point Interest Rate Hike After CPI Release

Traders of Federal funds on the CME exchange now see a 67% likelihood that the Federal Reserve will raise the target interest rate by 100 basis points, or one full percentage point, to 250-275 basis points this month, up from only 7.6% a day prior and 0% a week prior.
The odds of the Fed reprising June’s 75 basis point hike to a target rate of 225-250 is down to 33% from 92.4% a day ago.
On Wednesday, the Labor Department released the CPI, the most widely tracked measure of inflation, showing the highest inflation gauge in four decades.
“The fresh inflation high could give central bankers the green light for another aggressive rate hike. The Fed has prioritized the battle to stabilize prices over any push for economic growth at this point in time,” Helene Braun reported.
The Federal Open Market Committee (FOMC) is scheduled to meet on July 26-27 to discuss further monetary tightening.

Altcoin roundup

  • StarkWare confirms StarkNet token: The crypto firm, which created the StarkNet blockchain scalability product, confirmed the creation of the long-rumored StarkNet token to help maintain, secure and evolve the ecosystem. The token will go on Ethereum as an ERC-20 token in September. Read more here.
  • Over $400M in BNB burned in quarterly move: Over 1.9 million of crypto exchange Binance’s BNB tokens worth roughly $405 million were burned as part of a quarterly burn program, data shows. The action is part of an automatic system to reduce the total supply of BNB to 100 million. Read more here.
  • UK court allows serving legal documents via NFTs: The High Court of England and Wales has allowed Fabrizio D'Aloia, founder of Italy-based online gambling company Microgame, to file a lawsuit against anonymous people through a non-fungible token (NFT) drop. The ruling will allow legal proceedings against otherwise anonymous persons through their wallet addresses. Read more here.

Relevant insight

  • Listen 🎧: Today’s "CoinDesk Markets Daily" podcast discusses the latest market movements and takes a look at what decentralization can do for energy.
  • US Inflation Gauge Jumps to Fresh 4-Decade High of 9.1%; Bitcoin Falls: The new consumer price index (CPI) reading keeps pressure on the U.S. central bank to further tighten monetary policy aggressively at its next meeting later in July.
  • Celsius Pays Off Last DeFi Loan, Reclaims Nearly $200M of Wrapped Bitcoin From Compound: The troubled crypto lender previously paid off loans from Aave and Maker.
  • Tony Hawk Skates Into the Metaverse With ‘Largest Virtual Skatepark Ever Made’: The skateboarder's foray into the metaverse will take place in The Sandbox, an Ethereum-based virtual land game.
  • US Tribal Nation-Backed Economic Zone Passes Rules Defining Digital Assets: The Catawba Digital Economic Zone in South Carolina hopes to attract crypto companies to remotely incorporate under its laws.
  • Ukraine Seizes Assets From OTC Crypto Brokers for Working With Russians: The Prosecutor General's office said it confiscated $1.7 million in fiat money and almost a ton of silver.
  • Compass Mining CEO and CFO Resign Amid 'Setbacks and Disappointments': The company appointed co-founder and Chief Technology Officer Paul Gosker and Chief Mining Officer Thomas Heller as interim co-presidents and CEOs.
  • South African Central Bank to Look at Regulating Crypto: The country may also issue a central bank digital currency.
  • Crypto Custodian Copper Soon to Close Delayed Funding Round: Copper’s Series C round will value the company around $2 billion, according to two sources. The firm sought a $3 billion valuation in November.
  • Rare CryptoPunk Sells for $2.6M as Collection Continues Resurgence: The Tuesday sale was tied for the fifth largest in the collection’s history.
  • Mila Kunis-Linked Web3 Studio Toonstar Partners With Hot Topic to Market Entertainment NFTs: Toonstar is partnering with Hot Topic to target the intersection of entertainment and NFTs, through retail.

Other markets

Biggest Gainers

AssetTickerReturnsDACS Sector
PolygonMATIC+4.7%Smart Contract Platform
AvalancheAVAX+4.0%Smart Contract Platform
StellarXLM+3.3%Smart Contract Platform

Biggest Losers

AssetTickerReturnsDACS Sector
TerraLUNA−4.1%Smart Contract Platform
LoopringLRC−2.7%Smart Contract Platform
GalaGALA−2.2%Entertainment
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 20 is a ranking of the largest digital assets by volume on trusted exchanges.
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