Bitcoin Retreats Further Into the Gloom

December 29, 2022 World Blockchain

The largest crypto by market capitalization dropped below $16.5K at one point on Wednesday. ALSO: CoinDesk research analyst George Kaloudis ranks his top five industry annoyances with FTX topping the list.

Here’s what’s happening:

Prices: Bitcoin, ether and most other major cryptocurrencies spent Wednesday in the red.
Insights: In this last week of 2022, First Mover Asia is revisiting a few of CoinDesk’s (CD) most noteworthy columns. In his latest Crypto Long and Short newsletter, CD Research Analyst George Kaloudis considered five of the most annoying events and trends in 2022. Unsurprisingly, topping his list, Kaloudis wrote of his anger at FTX.

Bitcoin added another dollop of gloom to an already gloomy year on Wednesday.

The largest cryptocurrency by market capitalization was recently down a percentage point over the past 24 hours to trade just above $16,500. BTC has been clinging closer to $17,000 since mid-December amid market concerns about the latest macroeconomic uncertainties and the increased likelihood of the U.S. central bank adding to its recent diet of interest rate hikes.

In an interview with CoinDesk TV’s First Mover program, Brent Xu, founder and CEO of cross-chain DeFi hub Umee, said that markets seem destined to continue their current negativity well into 2023. “Markets are going to bottom out around Q2 to Q3,” Xu said. “We’re going to see another six to 12 months of negative sentiment, possibly 18 months.”
Still, he added that he expects “better developments” in the long term.

Ether was recently changing hands just under $1,200 for a second consecutive day, off more than 2% from Tuesday, same time. Other major cryptos by market value were largely in the red amid tepid trading that is typical for most assets as a year closes. SOL, the token of the Solana blockchain, and APT, the native cryptocurrency of the Aptos blockchain system were down more than 11% and 10%, respectively. The CoinDesk Market Index (CDI), an index measuring cryptos’ performance, recently fell 1.86%.

U.S. equity indexes slipped slightly as investors chewed over the implications of China reopening its borders after months of Covid lockdown. The tech-focused Nasdaq and S&P 500, which has a hefty technology component, declined 1.4% and 1.2%, respectively. Stocks usually trade sideways at this time of the year, although a massive sell-off of Tesla stock this month and Southwest Airlines mass cancellations may alter this traditional course.

For at least one day, a couple of faintly positive stories replaced the latest developments in crypto exchange FTX’s ongoing crisis among industry headlines. Bitcoin miner Argo Blockchain (ARBK) avoided filing for bankruptcy protection after agreeing to sell its Dickens Country, Texas mining facility to Galaxy Digital for $65 million and securing a $35 million loan from the crypto-focused financial services firm.

Earlier in the day (Hong Kong time), CoinDesk also reported that MicroStrategy (MSTR), the business software vendor that was co-founded by crypto proponent Michael Saylor, has added to its bitcoin (BTC) stockpile, purchasing about 2,395 bitcoins for $42.8 million between Nov. 1 and Dec. 21 through its MacroStrategy subsidiary.

Umee’s Xu said that the recent uptick in macroeconomic conditions and crypto price stability has been troublesome for options trading.

“If you’re an options trader, not a lot of volatility,” Xu said. “Whenever there’s any price movements, they’re not going to be sustained long enough form some notable trend.

He added: “It’s just not the best time for investing in crypto assets.”