First Mover Americas: Bitcoin Jumps Most in Six Months, as 'Powell Pivot' Speculation Returns

• Price Point: Bitcoin posts its biggest daily gain in six months, surging past $20,000 on speculation that the Federal Reserve could quickly pause or reverse monetary-policy tightening as the U.S. economy slides into recession.
• Market Moves: CoinDesk rolls out new broad-market gauge of digital-asset prices, the CoinDesk Market Index – and the media company hopes the new gauge could become the "S&P 500 of crypto."
• Chart of the Day: The "backwardation" in ether futures is starting to fade – perhaps the latest chapter in traders' ongoing efforts to position themselves ahead of the Ethereum blockchain network's upcoming Merge.

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

By Omkar Godbole and Bradley Keoun

Bitcoin posted its biggest daily gain in six months on Friday, surging past $20,000 as traditional-market investors shrugged off Federal Reserve Chairman Jerome Powell's pro-liquidity tightening stance.

Bitcoin (BTC), the leading cryptocurrency by market value, jumped 8.6% to $20,997 and ether (ETH), the native token of Ethereum's blockchain, scheduled to undergo a major technological upgrade next week, rose 4% to $1,705, according to CoinDesk data.

The newly released CoinDesk Market Index rose 5.5%. (Scroll down to Market Moves for more on that.)

The rally appeared tied to speculation that risky assets, from stocks to cryptocurrencies, could draw strength from monetary easing next year – a turnabout from 2022 where central banks from the Federal Reserve to European Central Bank are ratcheting interest rates higher. (The last time the Fed tried to raise interest rates in 2018, markets lurched, and Fed Chair Jerome Powell agreed to pause the campaign and then leading a rate-cutting cycle the following year.)

In traditional markets, stock futures were wavering after major U.S. stock indexes finished the day higher on Wednesday. The European Central Bank raised interest rates by 0.75 percentage point, the biggest single hike since it began setting monetary policy in 1999.

In the news, the controversial crypto mixer Tornado Cash once again found itself at the nexus of stolen tokens from a decentralized-finance protocol, as PeckShield spotted $500,000 of the dollar-linked stablecoin Dai moving through its pipes, Sam Reynolds reports. In August, the US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash prohibiting all US persons and entities from interacting with the protocol.

And crypto influencer Cooper Turley – one of the original "yield farmers" from the 2020 "DeFi Summer" – told CoinDesk that he was spinning up a $10 million fund to invest in artists and startup founders bringing crypto and music together.

Market Moves

Crypto’s S&P 500: CoinDesk Unveils Broad-Market, Digital-Asset Index

By Bradley Keoun

CoinDesk on Friday unveiled a new index of digital-asset prices, saying it hopes the broad gauge of crypto markets could become an industry benchmark similar to the stock market’s Dow Jones Industrial Average or Standard & Poor’s 500.

The CoinDesk Market Index initially consists of 148 digital tokens, said Jodie Gunzberg, managing director for CoinDesk Indices. To be included, each token must have a pricing history from at least two eligible exchanges going back at least 30 days.

“It’s meant to be as inclusive as possible,” Gunzberg said in an interview. “We’re just trying to represent the market.”

The new index joins a growing field of competitors aiming to meet demand from investors and traders for ways to measure the crypto market’s performance. Other providers include Bloomberg Galaxy, CF Benchmarks (part of the Kraken exchange), Nasdaq, Solactive, MarketVector, MSCI and S&P.

Read the full story here.

Chart of The Day

Ether futures "backwardation" starts to fade

By Bradley Keoun and Omkar Godbole

• Trades surrounding the Ethereum blockchain's upcoming Merge have put the ether (ETH) futures curve into "backwardation" – where the futures price trades below the current market or "spot" price. That's a departure from the more usual condition of "contango" where the futures price is higher than spot.
• In the past couple days, though, the discount is starting to shrink.
• On the CME exchange, the one-month discount has slimmed to 8.85% from 13% earlier in the week, based on data from crypto-derivatives tracker Skew.
• The three-month discount has shrunk to 3.8% from 6%.
• Some analysts have linked the backwardation to bets that the Ethereum network might get forked by crypto miners resisting its shift to a less energy-intensive "proof-of-stake" blockchain system from the current "proof-of-work" version.

Latest Headlines

• BofA Says Crypto Exchange Binance to Benefit From Increased Supply of Its own Stablecoin: The automatic conversion of other stablecoins could increase Binance USD supply by $908 million, the bank said.
• New French Bill Could Give Authorities Powers to Seize Crypto Assets: The country joins the U.K. in seeking to ensure authorities can get their hands on crypto linked to criminal activities.
• FTX Ventures to Take 30% Stake in SkyBridge Capital: SkyBridge will invest some of the funds into crypto assets for its balance sheet.
• Bitcoin Miner CleanSpark to Buy Mawson’s Georgia Mining Facility, Rigs for Up to $42.5M: The deal has potential to increase CleanSpark’s hashrate to 5.2 EH/s by the year-end, exceeding the company’s previous guidance.