First Mover Americas: Bitcoin Inches Up After Report Shows Slowing U.S. Jobs Growth

  • Price Point: Bitcoin was rising Friday after a U.S. Labor Department report showed that jobs growth slowed dramatically last month – seen as a boost for prices of risky assets, since it relieves pressure on the Federal Reserve to raise interest rates aggressively.
  • Market Moves: A look at how derivatives are dominating ether markets ahead of the Merge.
  • Chart of the Day: U.S. inflation-adjusted bond yield is at its highest since mid July.

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Price point

Bitcoin (BTC) was back trading just above $20,000 Friday, after dipping to levels of $19,500 during the week as stock markets in Europe opened positively after a negative week.

The largest cryptocurrency got an extra boost from a U.S. government report showing that the world's largest economy added 315,000 jobs in August – a slowdown from the 526,000 reported for the prior month but still exceeding economists' estimates for a gain of 300,000. The data might prompt traders to dial back their expectations for interest-rate increases by the Federal Reserve - theoretically a positive for prices of risky assets like cryptocurrencies.

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up 2% on the day and made gains of 6% over the last seven days. The network’s Merge is now less than two weeks away.

In the altcoin market, Lido DAO, a liquid staking solution for Ethereum, was up 8%. The solution has almost $7 billion in total value locked (TVL) alongside a market capitalization of $1.2 billion. Polygon’s MATIC was up 7%.

In the news, Reuters reported Thursday that in late 2020, U.S. federal prosecutors asked crypto exchange Binance to submit internal documents related to its money-laundering checks and communication involving CEO Changpeng "CZ" Zhao.

Futures exchange FTX.US Derivatives said Thursday that former CFTC Commissioner Jill Sommers has joined its board in a move to help bolster the firm’s regulatory efforts. The hire comes as FTX has previously pitched the CFTC to directly clear customers' crypto swaps.

The International Monetary Fund has called for a global platform for cross-border payments, and reiterated calls to regulate a crypto sector that officials say is unstable, inefficient and riddled with fraud.

Cryptocurrency exchange has backed out of a five-year sponsorship deal worth $495 million with the UEFA Champions League, European soccer's elite league, according to a report in SportBusiness.

Biggest Gainers

Asset Ticker Returns DACS Sector
Chainlink LINK +7.8% Computing
Polygon MATIC +5.6% Smart Contract Platform
Polkadot DOT +5.3% Smart Contract Platform

Biggest Losers

Asset Ticker Returns DACS Sector
Terra LUNA −8.9% Smart Contract Platform

Market Moves

Ether Derivatives Markets Continue to Heat Up Ahead of the Merge

As the much anticipated Merge gets closer and closer, data from Kaiko shows that ether derivative markets are heating up.

New money is returning to the perpetual futures markets more ferociously than ever, specifically for ETH, with open interest recently breaking all-time highs and an increase in volumes in ETH perpetual futures as investors on either side of the debate look to position themselves ahead of the Merge.

The share of perpetual futures volume between bitcoin and ether had ETH commanding 45% of volume at start of August, going up to 57% at the end of month as this month's Merge approaches, according to Kaiko.

BTC & ETH daily perpetual futures volume (Kaiko)

Spot vs. perpetual futures volume

An increasing amount of ETH perpetual futures trades are being made compared to spot markets, and beginning to have an outsized influence on sentiment surrounding ether, according to a report from Kaiko.

According to the report, volumes typically correlate to price movements, and if futures markets are seeing a greater increase in volumes than spot markets, the correlation might signal that the futures market is leading price discovery.

"Back when markets were at all time highs last November, perps only did 4x the volumes of spot markets," said the report.

"Now at 7x the volumes and with open interest at all-time highs, it seems investors and institutions are turning to perpetual futures to place their bets on ETH, which as we’ve seen over the last month have been predominantly biased to the short side."

Based on the ETH perpetual future daily volume over the last year, there is an increase from $19 billion to over $33 billion. Daily spot volumes rose from $3.7 billion to $4.8 billion in just over a year.

ETH perpetual future and spot volume (Kaiko)

Chart of the Day

U.S. Inflation-Adjusted Bond Yield at Highest Since Mid-July

By Omkar Godbole

  • The inflation-adjusted 10-year U.S. bond yield has jumped to 0.67%, the highest since July 11, according to data sourced from charting platform TradingView.
  • Like gold, bitcoin tends to move in the opposite direction of the real yield.
  • Bitcoin's 90-day inverse correlation with the real yield reached a record -0.95 in July and remained elevated at press time.

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