Bitcoin Surpasses $21.3,000 as Cryptos 2023 Feel-Good Story Continues

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Hello. Here is what happens:

Price: Bitcoin surged above $21.3,000 for the first time since early November before pulling back slightly. But BTC remained in the green in Monday’s trading.

Insights: The rise of FTX’s FTT token defies reason, but is part of a trend of cryptos whose prices are rising even as their projects fail and flounder.

Watch the latest episodes of CoinDesk TV for insightful interviews with industry leaders in crypto and analytics. And sign up for First Mover, our daily newsletter providing context on the latest moves in the crypto markets.

Prices

CoinDesk Market Index (CMI)

1,015.47

+11.6 1.2%

Bitcoin (BTC)

$21,194

+339.2 1.6%

Ethereum (ETH)

$1,574

+23.3 1.5%

S&P 500 daily close

3,999.09

+15.9 0.4%

Gold

$1,920

+2.0 0.1%

10-year Treasury yield

3.51%

0.1

BTC/ETH Price by CoinDesk Indices; gold is the COMEX spot price. Prices from around 4 p.m. ET

Bitcoin Surpasses $21.3,000 to Continue Its 2023 Momentum

By James Rubin

Bitcoin’s 2023 feel-good story continued as the largest cryptocurrency by market capitalization held above the $21,000 highs it last hit in 2023. ‘fall.

BTC was recently trading at around $21,190, a gain of more than 1.6% in the last 24 hours in light trading conditions typical of holiday long weekends. US stock markets were closed on the Martin Luther King Day in honor of the late civil rights leader. Bitcoin was trading below $17,000 just over a week ago before a rush of favorable economic data, including a drop in the US consumer price index (CPI), catapulted prices from crypto and stocks on the rise.

Ether was approaching $1,600 recently, up about 1.5% from Sunday, the same time. The second largest crypto by market value has jumped over 32% this year.

Most other major cryptos spent much of Monday in the green with CRO, the Crypto.com exchange token recently up more than 7% and SOL, the Solana blockchain token up more than 1%. .4% to continue its momentum of the last three weeks . FTT, the token of embattled crypto exchange FTX, also added to its unlikely recent gains, rising more than 24% at one point.

The story continues

As CoinDesk’s Shaurya Malwa reported, the total capitalization of crypto markets surpassed $1 trillion over the weekend, and investors liquidated nearly $500 million in shorts, or bets against prices. higher, since Friday to mark the highest levels since October 2022. Meanwhile, the Crypto Fear & Greed Index reached 45, still in fear territory, but more than six times higher than it was in June.

“We consider the main driver behind this 20% rise in BTC over the past week to be that some macro fears are easing with positive economic data in the US, including weaker inflation statistics and strong job growth, in Europe, released EU unemployment statistics that were the lowest in 23 years and China lifted numerous border restrictions,” wrote Bradley Duke, co-CEO of the crypto ETP provider ETC Group, in an email: “This shift in sentiment was reflected in the BTC futures market, with traders betting long four days in a row based on the Long-Short ratio.

Bitcoin’s surge also came as the US debt ceiling debate intensifies. In a letter to party leaders on Friday, US Treasury Secretary Janet Yellen called on Congress to raise the ceiling as soon as possible, warning that the government would hit a borrowing limit of more than $30 trillion on January 19 when the agency is expected to take special actions to manage government cash flow, possibly through June. On Sunday, incoming House Speaker Kevin McCarthy (R-Calif.) reiterated his party’s call for spending cuts as a precursor to raising the debt ceiling.

“In our three-part thesis on the adoption of digital assets, the juxtaposition of growing American indebtedness and a shrinking, aging workforce ‘figures prominently,'” wrote Mark Connors, head of research at Canadian Digital Asset Manager 3iQ, in an email to CoinDesk “If we don’t let inflation reduce our debt in real terms and we can’t grow it, expect more.”

Connors added, “BTC is more correlated to debasement than inflation, so not surprised to see BTC rising with the prospect of more debt.

Will the current tailwinds for risky assets continue? In an email, Craig Erlam, senior market analyst for forex market maker Oanda, noted the current optimism among investors, but also questioned whether that tone would endure as companies report earnings in the coming weeks.

“The question now is whether earnings season will bolster this newfound sense of hope or spoil the party before it really begins,” Earlam wrote. “Companies have so far been reluctant to lay off staff, which has kept the labor market tight even as some economic indicators weaken and inflation clouds demand and cost prospects. A poor season results could undermine hopes for a soft landing that seems more possible now than it has for many months.”

Erlam added that it was unclear if bitcoin’s rise represented “a resurgence or just a brief rebound,” “but clearly there are still some very bullish traders out there. It should make for an interesting couple of weeks.”

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Why is FTX’s FTT Token Rising?

By Sam Reynolds

The FTT token has risen dramatically over the past 24 hours, climbing 24.5% according to data from CoinDesk. In the past two weeks, it has increased by almost 200%, and many are wondering why the token from a failed exchange is doing so well.

There is no material reason for FTT to do anything other than sit idle. The exchange has disappeared and is not relaunched. Worse still, the SEC took notice and there is no dispute that FTTs (and other exchange tokens) are securities. Creditors have a long way to go to get anything back from the courts.

Of course, most reputable exchanges have long since removed FTT from the list. It’s only on KuCoin and a handful of others.

But the market is in the mood for meme token degeneration. Traders like to push a corpse up and down, which is why Lunas Classic (Terras token) has gone up and down like a rollercoaster even as the entire project was effectively declared dead earlier this year.

You can also see it in the success of Solana-based BONK, which spearheaded the Solana cover, on the back of Shiba Inu memes and a dislike of Alameda tokens (Sam coins).

The Decentralands MANA token also defies gravity, up over 80% in the past week. A minor update released by the team improved some parts of the UI/UX but did nothing for the virtual worlds small player base.

Sometimes the market does what its worst critics accuse it of being, nothing more than a casino.

Important events.

World Economic Forum

China Gross Domestic Product (Q4/YoY/QoQ)

Retail sales in China (Q4/Annual)

CoinDesk TV

In case you missed it, here’s the most recent episode of “First Mover” on CoinDesk TV:

Crypto in Focus at the World Economic Forum; Bitcoin Surpasses $20,000

“First Mover” was live from Davos, Switzerland, where the World Economic Forum’s annual gathering of business, government and civic leaders kicks off. One big topic is crypto and blockchain innovation, seen as both a challenge to financial systems and a tool to help solve some of the world’s most pressing problems. Coinbase Vice President of International Policy Tom Duff Gordon, World Economic Forum Managing Director Saadia Zahidi, Global Blockchain Business Council CEO Sandra Ro, and Accenture Senior Managing Director David Treat joined the conversation .

Securities

Long-term adoption of crypto depends on regulation, says Coinbase Exec: Live from the World Economic Forum in Davos, Switzerland, Tom Duff Gordon, Vice President of International Policy at Coinbase, explains why the fall of FTX put crypto on the radar of policy makers.

DeFi Protocol Sushi outlines plans for 2023 with focus on DEX and user experience: Sushi will launch a DEX aggregation router in Q1 2023, protocol CEO says.

Brazil’s second-largest private bank launches first tokenized credit note: Bradesco completed the operation as part of a regulatory sandbox promoted by the South American country’s central bank.

Options swing to show stronger bitcoin in July: Long-term sentiment turned bullish with bitcoin showing its biggest weekly percentage gain in two years.

Bitcoin Surge Causes Over $500M in Liquidations, Highest in 3 Months: Crypto Markets Hit the $1 Trillion Market Cap Mark for the First Time Since November.

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