Good morning. Here’s what’s happening:
Prices: DOGE was soaring again, UNI jumped and bitcoin and ether traded flat a day before the Fed's latest, likely 75 basis point, rate hike.
Insights: Ripple's policy director for the Asia Pacific rim region noted a shift in Hong Kong's recent policy statement, but said the industry needs more details.
Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis. And sign up for First Mover, our daily newsletter putting the latest moves in crypto markets in context.
CoinDesk Market Index (CMI)
1,027.79 +2.5 0.2
Bitcoin (BTC)
$20,490 +2.3 0.0
Ethereum (ETH)
$1,581 +9.6 0.6
S&P 500 daily close
3,856.10 −15.9 0.4
Gold
$1,650 +14.0 0.9
Treasury Yield 10 Years
4.05 0.0
BTC/ETH prices per CoinDesk Indices; gold is COMEX spot price. Prices as of about 4 p.m. ET
DOGE Continues to Climb; Bitcoin Trades Flat
By James Rubin
The DOGE were on the loose again in Tuesday trading, while bitcoin and ether remained more tightly leashed.
The popular meme coin was recently trading over 13 cents, a more than 12% gain for the past 24 hours and its highest point since late April. DOGE has been soaring since the middle of last week as billionaire entrepreneur and dogecoin enthusiast Elon Musk neared the close of his $44 billion purchase of social media platform Twitter.
BTC and ETH were recently changing hands sideways with the largest cryptocurrency in market value down a smidgen and ether in the green. Bitcoin held its place snuggling above the $20,000 threshold it assumed more than a week ago amid hopeful signs the U.S. central bank will scale back its current diet of hefty interest rate hikes by early next year, if not sooner. The Federal Open Market Committee, which sets monetary policy, will likely announce a fourth consecutive 75 basis point increase on Wednesday.
Yet recent indicators suggest that inflation will soon be waning meaningfully without throwing the economy into a harsh recession. As CoinDesk analyst Glenn Williams wrote, investors hoping for a more dovish turn in monetary policy may look optimistically at a percentage decline in the M2 money supply growth from a year ago. The parabolic increase in U.S. money supply during 2020 is largely behind the current inflationary environment. The reduced supply growth could be evidence that recent Federal Reserve measures are working.
DOGE was not the only altcoin to surge as UNI recently rose 3.3%. Decentralized exchange (DEX) Uniswap’s native token was up more than 5.1% at one point and has climbed more than 10% over the past week. The gains have followed Uniswap's closing of a $165 million Series B funding round earlier in October.
Meanwhile, equity markets closed down slightly with the tech heavy Nasdaq and S&P 500 dropping 0.8% and 0.4%, respectively.
Noting an unexpected increase in job openings in the latest U.S. JOLTs (Job Openings and Labor Turnover Survey) data, Edward Moya, senior market analyst at foreign exchange market maker Oanda, wrote pessimistically that "momentum was building on expectations for the Fed to downshift their tightening pace in December, but now that call seems like it may have been premature. Rates might need to stay higher for longer if the labor market is still healthy and inflation ends up being stickier than markets are initially thinking."
Moya added: "It seems like Wall Street might have to wait until the New Year for the Fed to downshift, which means Bitcoin could be vulnerable to finish the week lower."
What Does Hong Kong's Policy Statement Really Mean?
By Sam Reynolds
Hong Kong may be “ready to engage” with the digital assets industry to provide retail investors with a “suitable degree of access to virtual assets,” but the industry still needs to see more details of what this plan entails, says Ripple’s Rahul Advani, the firm’s policy director for APAC.
“The tone has changed slightly,” Advani told CoinDesk.
Previously, Hong Kong authorities had been adamant that investment in virtual assets was only to be the domain of professional (accredited) investors. Sam Bankman-Fried cited this as one of the reasons, alongside COVID-19 restrictions, why FTX moved its headquarters from Hong Kong to the Bahamas last year.
“But I think the statement was very broad,” Advani continued. “What we’re expecting to see next is a consultation from the [Securities and Futures Commission], which will have more specifics on what that permission looks like.”
Advani believes that the “devil is in the details.” There could be all sorts of clauses the SFC throws in, like suitability tests or other types of restrictions on how much you can trade and trading venues such as what Singapore has.
In Singapore, the government is not anti-retail crypto, but it has been “very clear that not all retail investors should be investing in crypto assets,” Advani said, pointing to a recent consultation from the Monetary Authority of Singapore, which advocates for suitability tests for investors and restrictions on borrowing to purchase crypto.
“Singapore is ensuring that there are safeguards in place,” he said. “They’ve said that they aren’t going to ban retail participation in crypto because that’s going to move the market offshore. And it's not solving risks.”
Hong Kong vs. Singapore?
While some have argued that the crown for Asia’s crypto hub is a zero-sum, winner-take-all, game. Advani doesn’t agree.
“I don't think it's a question of Singapore versus Hong Kong. I think the market is big enough that both Singapore and Hong Kong can coexist,” he said.
Retail crypto’s rise in Hong Kong doesn’t come at a cost to Singapore. But the question remains, what will that rise look like? For now, everyone is in wait-and-see mode.
“It’s a positive statement that we’ve seen from the Hong Kong government ... We’re waiting to see that consultation.”
8:15 p.m. HKT/SGT(12:15 UTC) United States ADP Employment Change (Oct.)
2:00 a.m. HKT/SGT(18:00 UTC) United States Fed's Monetary Policy Statement
6:00 a.m. HKT/SGT(22:00 UTC) Australia S&P Global Services PMI (Oct.)
In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:
Dogecoin Trumps All Other Major Cryptos in October; Binance Exec on Future of Twitter Under Elon Musk:
Binance Chief Strategy Officer Patrick Hillmann joined "First Mover" to discuss the crypto exchange's involvement in Twitter under the direction of Elon Musk. Plus, dogecoin (DOGE) was the top performer in October among the 150 digital assets in the CoinDesk Market Index (CMI). Digital asset analysts attributed the big jump in DOGE to Musk’s $44 billion takeover of Twitter – ostensibly tied to speculation that the deal might somehow, eventually, bring value or utility to the Dogecoin blockchain and its eponymous cryptocurrency.
Early MakerDAO Developer and Stablecoin Pioneer Found Dead in Puerto Rico: A 29-year-old man's body was pulled from the currents Friday morning off a beach in the Condado area of San Juan, El Nuevo Dia reported, citing local police.
South African Supermarket Chain Pick n Pay Now Accepts Bitcoin Payments, South Africa's The Times Reports: The retailer is taking payments from any Lightning Network-enabled wallet.
Crypto Regulation Will Be a Priority for G-20 Under India Presidency, Official Says: India is set to take over the presidency of the intergovernmental group for one year starting in December.
Elon Musk Tweet Sparks Flurry of Twitter-Themed Dogecoin Tokens: The price of some 67 tokens dropped more than 90% following their issuance, on-chain data shows.
Dollar Reversal Could Bring Inflationary Pressure, Former U.S. Treasury Secretary Larry Summers Warns: Speculation is mounting over when the Federal Reserve might pivot dovish. But economists, including Summers, warn any such move might lead to weakness in the U.S. dollar versus other global currencies, in turn driving up prices for imports.
