Crypto markets plunged, and the FTX exploiter moved a total of 180,000 ether. |
Nov. 21, 2022
What happened today in crypto markets
By Jocelyn Yang, CoinDesk Markets Reporter
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Happy Monday. Here’s what moved in the crypto markets today:
Bonds issued by Coinbase and MicroStrategy tanked as the FTX collapse dented institutional confidence in crypto. Coinbase’s shares sank to an all-time low.
The FTX exploiter moved a total of 180,000 ether (ETH) – worth roughly $200 million – to 12 crypto wallets Monday.
Bitcoin and ether prices plunged amid continued market uncertainty triggered by the FTX collapse.
BTC/ETH prices per CoinDesk Indices; gold is COMEX spot price. Prices as of about 4 p.m. ET
Top Story
Crypto markets wobbled on Monday, with major assets feeling continuing nervousness over the potential for further market contagion following the collapse of the FTX exchange.
In a story reported by Omkar Godbole, bonds issued by crypto exchange Coinbase (COIN) and by business-intelligence company MicroStrategy (MSTR) have slumped as investor confidence dropped due to the FTX collapse.
Coinbase’s bond due 2031 has dropped 15% in value this month to 50 U.S. cents on the dollar, according to data source Finra-Morningstar, sending the yield – which moves in the opposite direction to price – to a record high of 13.5%.
MicroStrategy followed a similar trend: On Friday, the yield on the company’s 2028 notes, issued last year to finance bitcoin accumulation, climbed to 13.35% as the price dropped to a record 72.5 cents on the dollar.
The companies’ bonds carry a premium of around 1,000 basis points – or 10 percentage points – to the U.S. 10-year Treasury note yield, as of Friday. In traditional markets, a premium of that level is taken to represent credit stress. The 10-year Treasury was yielding 3.83% at press time.
Mike Alfred, a value investor and founder of digital assets investment platform Eaglebrook Advisors, said that high bond yields are “reflective of sharply higher rates” but also of “genuine skepticism about the long-term viability of crypto amongst institutional investors” following the contagion fallout from a list of crypto firms this year.
Coinbase’s shares dropped to $40.62 Monday, hitting an all-time low since it went public in April 2021, CoinDesk’s Helene Braun reported.
Some investors believe bonds tied to Coinbase and MicroStrategy are a safer way to bet on a crypto bull revival. According to Rich Rosenblum, co-founder of crypto trading firm and liquidity provider GSR noted that while bonds are a safer route, the upside is also “far more muted.”
Other News
Bitcoin (BTC) dropped to the $15,500 level, nearing a two-year low, amid a gloomy market climate following the FTX collapse. The largest cryptocurrency by market capitalization was trading as low as $15,591, close to the 52-week low of $15,554. Bitcoin had settled back to around $15,800 as of press time, down roughly 5% in the past 24 hours. “If the $15,500 level breaks for bitcoin, there is not much support until the $13,500 level, followed by the psychological $10,000 level,” Edward Moya, Oanda senior market analyst for the Americas, wrote in a Monday note.
Ether (ETH) slid further to the $1,080 level, down 8%. A CoinShares report Monday said short-ether investment products – those that bet on a price decline – saw the largest inflows on record, with net inflows of $14 million in the seven days ended Nov. 18. The negative sentiments around ether could attribute to the uncertainty over the upcoming Shanghai update and the hacked FTX ETH assets, which sum to around $280 million, according to CoinShares.
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Market Analysis: Bitcoin and Ether Approaching Oversold Levels
Data for bitcoin’s RSI (CoinMarketCap/CoinDesk)
Bitcoin and ether prices, down 4% and 12% over the last seven days, are approaching traditionally oversold levels, when using the RSI as a tool of measurement. The question is whether that even matters.
RSI, or the relative strength index, is a commonly used tool in technical analysis. I personally use it frequently, with the caveat being that I tend to use a 10-day RSI as opposed to the conventionally used 14-day RSI.
Part of the RSI’s popularity is driven by its relatively straightforward set of “rules.” While not ironclad, they allow novices as well as seasoned professionals to quickly evaluate an asset’s price level and determine where it falls in the range of cheap vs. expensive.
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Altcoin Roundup
Blockchain data showed a crypto account associated with the FTX exploiter moved a total of 180,000 ETH – worth roughly $200 million at current prices – to 12 crypto wallets Monday, with each wallet receiving 15,000 ETH over a period of minutes. Failed crypto exchange FTX suffered an exploit on Nov. 11 – the same day it filed for bankruptcy protection in the U.S. – enduring about $600 million of unauthorized withdrawals.
– Jocelyn Yang
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Listen 🎧: Today’s “CoinDesk Markets Daily” podcast discusses the latest market movements and a look at what FTX losses mean for your taxes.
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
