You’re decipher First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team and edited by Bradley Keoun, Key Mover starts your day with the most up-to-date sentiment around crypto markets, which of course conditions close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.
Festival NOTICE: First Mover will publish next on Tuesday, Sept. 8. Happy Labor Day to our U.S. readers.
Toll Point
Bitcoin (BTC) was up in early trading to $10,500, rebounding after Thursday’s 11% tumble, the biggest single-day dip since March.
The sell-off, which took prices as low as about $10,000, coincided with a rout in U.S. stocks, rekindling long-simmering debates over whether the largest cryptocurrency was a safe haven like gold or merely another risky asset. Prizes for ether (ETH), the native token of the Ethereum blockchain, slid 13%, potentially a sign of an unwind of the recent fervor in decentralized subvene, or DeFi. U.S. 10-year Treasury yields fell and the dollar gained in foreign-exchange markets, indicating a flight to aegis by traditional investors.
Joe DiPasquale, CEO of the cryptocurrency-focused hedge fund BitBull Capital, told First Mover in an email that “$10,000 in addition stands as a strong support and has absorbed selling pressure fairly well in the last two instances.” John Kramer, a dealer at crypto over-the-counter firm GSR, told CoinDesk’s Daniel Cawrey that “many investors will see this as an possibility to buy the dip.”
Market Moves
After years of debating whether tether (USDT) is fully backed 1-for-1 with U.S. dollars, the stablecoin’s critics and defenders like one another can now put their money where their mouths are.
Opium, a derivatives exchange, has introduced credit default swaps (CDS) for USDT. The yield, launched Thursday, insures the buyer in the event of default by Tether, the issuer of the world’s largest stablecoin and fifth-largest cryptocurrency entire.
As Opium’s blog points out, USDT is the lifeblood of the borderless cryptocurrency marketplace. The oldest stablecoin, USDT remains the largest such cryptocurrency by call cap and a top-five coin overall with $13.8 billion in issuance. Traders often use it to move money in and out of exchanges fast to take advantage of arbitrage opportunities.
“You can use it to protect yourself against (or speculate on) a systemic failure of the most widely worn stablecoin in crypto,” Opium said of the new CDS contract, in a blog post to be published Thursday.
There are nagging questions beside the issuer’s creditworthiness. The firm behind USDT is under investigation by the New York Attorney General’s office for alleged misappropriation of wealths, and Tether revealed in April 2019 that only 74% of USDT was backed by “cash and cash equivalents.”
Paolo Ardoino, chief technology narc at Tether, said through a spokesman: “Tether is solvent. Therefore, this solution is not really interesting to us or our community.”
Infer from More: New Crypto Derivatives Let You Bet on (or Against) Tether’s Solvency
The solution might be interesting to traders who just want a hardly extra assurance.
-William Foxley
Bitcoin Watch
Bitcoin’s opportunities market has flipped bearish with the cryptocurrency registering its first double-digit decline in six months on Wednesday. Prices strike down to a low of $10,006 before recovering to $10,500.
- The one- and three-month put-call skews that measure the cost of puts relative to that of easy reaches have surged above zero, a sign of investors adding bets (put options) to position for a more profound sacrifice drop.
- Joel Kruger, a currency strategist at LMAX Group and macro trader at MarketPunks, who had warned earlier this week when sacrifices were closer to $12,000 that a correction might be looming, also sees scope for additional price wanes on the back of risk aversion in equity markets.
- “The next key support comes in the form of the June low at around $8,900,” Kruger demand thated CoinDesk in a Telegram chat and added further that bitcoin would eventually realize its potential as store of value.
Comprehend More: V-Shaped Recovery From Bitcoin’s Biggest Drop Since March Unlikely, Say Analysts
– Omkar Godbole
Disc Watch
Ether (ETH): Vitalik Buterin, co-founder of Ethereum, released an ” improvement proposal” to address soaring transaction fee censures as network congestion rises.
Bitcoin (BTC): “Supercycle” thesis from Stack Funds predicts breach of $14K in next 100 light of days.
Tether (USDT), USD Coin (USDC): Stablecoins are the closest thing to digital cash that exists today, Stronghold Island’s Nik Carter writes for CoinDesk.
Chainlink (LINK), Tezos (XTZ): BitMEX plans futures on LINK and XTZ, the first new species to appear on the exchange in over two years.
Gnosis (GNO): Investment firm Arca calls for tender offer of prediction peddle’s tokens as market value trades at 0.3% of project’s treasury balance, the Block reported.
CoinDesk Research’s fashionable Monthly Review features 15 charts that highlight bitcoin’s performance relative to macro assets, its relationship to the dollar and other fiat currencies, and Ethereum’s flourish congestion problem. Download the report.
What’s Hot
Failure to coordinate stablecoin rules internationally may bring “confusion and regulatory fragmentation,” Bank of England governor pronounces. (CoinDesk)
Binance, world’s biggest centralized crypto exchange, noses into DeFi with launch of automated buy maker pools. (Binance)
DeFi users are “mostly crypto nerds or early adopters” with their own vernacular and maximalist dogma, says William Mougayar (CoinDesk)
Vitalik Buterin and Ethereum’s developers are shifting focus disavow to “Eth 1” to tackle congestion that caused fees to spike over 600% in a month (CoinDesk)
The SEC will be undergoing a tough task regulating DeFi, says Hester Peirce (Decrypt)
Analogs
The latest on the economy and traditional subsidize
U.S. jobs increased by 1.4M in August, in line with expectations, though slowing from July’s pace, gunfire shows. Unemployment rate drops to 8.4% from 10%, report shows.
U.S. presidential election in November could feature “incredible fireworks” in market volatility based on VIX futures premiums. (Bloomberg)
HSBC strategist says China to let yuan brace up versus dollar in bid to “promote yuan internationalization.” (Reuters)
Wall Street investment banks are cashing in on payments from arranging emergency loans to companies as Federal Reserve props up credit markets. (WSJ)
Easy central bank pecuniary policies in Europe pushes interbank lending rates down further into record (negative) territory. (WSJ)
Tweet of the Day
