What happened today in crypto markets By James Rubin, CoinDesk Markets Editor Was this newsletter forwarded to you? Sign up here. |
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A bit of good and bad news. Here's what moved Wednesday's crypto markets: |
- The Kraken exchange slashed 30% of its workforce.
- Dovish comments by Powell sent Bitcoin and cryptos surging a second day.
- Zuck stayed optimistic about the metaverse, despite dismal Meta performance.
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Crypto exchange Kraken is laying off 30% of its global staff – around 1,100 people – in response to the crypto market downturn, the company said Wednesday. |
- "Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client sign-ups," Kraken said in a blog post.
- The crypto market has sunk this year, with bitcoin (BTC) losing 63% of its value since the end of 2021 and the total crypto market cap down by more than two-thirds in the past 12 months.
- Back and forth: Companies that ramped up staffing levels during the preceding boom years have had to cut back during the decline. This month alone, publicly traded exchange Coinbase (COIN) trimmed 60 positions and Unchained Capital, a bitcoin financial-services firm, shed more than 600.
- As recently as June, Kraken said it was looking to expand as other companies laid off staff, flooding the market with experienced labor, saying it wanted to hire another 500 people.
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Market divergence: A key tone shift in crypto markets during November was just how dramatically they diverged from the path of traditional markets. Stocks rose as investors processed speculation that the Federal Reserve might slow the pace of interest rate hikes as soon as December. The S&P 500 is up 2.2% for the month, while gold climbed 7.8%. Dismal month for crypto: The largest coin by market cap fell in value by more than 18% for the month and ether tumbled 21% amid the collapse of crypto exchange giant FTX and the ensuing fallout. FTX filed for Chapter 11 bankruptcy protection little more than a week after CoinDesk reported irregularities on the balance sheet of its trading arm Alameda Capital, and other companies with exposure to FTX have been forced into survival mode. Still, a few tokens soared above the mess, including BAND and LTC, which jumped 57% and 38%, respectively. Equity markets enjoyed a memorable day as investors, buoyed by Fed Chair Jerome Powell's dovish remarks at the Brookings Institution's Hutchins Center on Fiscal and Monetary Policy on Wednesday, sent the tech-heavy Nasdaq up 4.4%, and the S&P 500, which has a strong technology component, and Dow Jones Industrial Average rising 3% and 2.1%, respectively. Brent crude oil, a measure of energy markets, sank 0.2%. |
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Market Insight: BTC and DXY Correlation |
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The correlation of bitcoin (BTC) and ether (ETH) to the U.S. Dollar Index (DXY) has once again turned negative. BTC's correlation coefficient to the DXY has fallen to -0.36, after moving as high as 0.84 on Nov. 19. Correlation coefficients measure the relationship between two assets, and range between 1 and -1. The former implies a direct pricing relationship between the assets, while the latter indicates an inverse relationship. BTC had held a persistently inverse relationship to the DXY since July, before crossing into positive territory on Nov 9. In August, the correlation between the two assets fell to -0.94. |
- Bitcoin (BTC) cracked the $17,000 threshold for the first time since the early part of November. The largest cryptocurrency by market capitalization was recently trading at about $17,060, up 3.6% over the past 24 hours.
- Ether (ETH), the second-largest crypto in market value, was recently changing hands just below $1,300, a 6.6% gain from Tuesday, same time.
- Altcoins were largely moving upward from Tuesday. UNI, the token of the smart contracts-based Uniswap platform was up more than 6% and the popular meme coin DOGE rose more than 3%.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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