First Mover Asia: Did Nvidia Profit From Crypto Mining? Consider Its Manufacturing Partners’ Stocks; Cryptos Have a Rough Day

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Good morning. Here’s what’s happening:

Prices: Bitcoin and other major cryptos plummet.

Insights: Nvidia has a peevish relationship with the crypto industry.

Technician's take: BTC's breakdown is confirmed and upside appears limited.

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Bitcoin continued to spiral in Monday trading, dropping to levels it hasn't seen since early July and is at less than half its price in late November when it approached $70,000.

The euphoria of wider adoption and growing institutional interest coupled with growing awareness of blockchain-fueled projects has long since evaporated, replaced by fear of higher interest rates, geopolitical turmoil and a looming recession. The largest cryptocurrency by market value was recently trading at just over $31,000 after dropping well below that threshold earlier in the day. But bitcoin's more than 8.5% plunge over the past 24 hours was better than most major cryptocurrencies fared on Monday as investors fled assets with even an inkling of risk. The riskier the asset the faster the exit.

Terra's LUNA token was off more than 30% over the same period after the Luna Foundation Guard, the Singapore-based, non-profit established to support the Terra network, tweeted that would loan $1.5 billion in bitcoin (BTC) and terraUSD (UST) to defend the peg of its algorithmic stablecoin to the U.S. dollar. CRO tumbled more than 16% at one point. ADA and DOT were off about 14%.

Ether, the second-largest crypto by market cap, was more resilient, roughly mirroring BTC's more modest drop. Trading volume increased slightly, reflecting the pickup in sellers' activity, although it remained well off 2022 highs earlier in the year. The Fear & Greed index remained in the extreme fear range where it has spent the past month amid investors' growing concerns about inflation, central bank monetary hawkishness that could send the global economy into recession and the widening aftershocks of Russia's unprovoked invasion of Ukraine. Daily, weekly and monthly charts for bitcoin have all trended negative.

Crypto's bloodbath tracked steep declines in equity markets with the tech-focused Nasdaq dropping over 4.3% and the S&P 500 and Dow Jones Industrial Average falling 3.2% and nearly 2%, respectively. Even gold, a safe-haven asset that typically rises in stressful periods, declined 1.5%.

Mark Lurie, the CEO of crypto trading software provider Shipyard Software, noted the impact of Terra's announcement, but called it "noise relative to the macro story" that has sucked in "growth assets," including Amazon (AMZN), Alphabet's (GOOG) Google and some of the biggest names in technology.

"This macro drop is probably for two converging reasons,"

Lurie wrote that the macro drop was due to rising interest rates that were making "safer assets more attractive" and pulling "capital from growth stocks." But he also highlighted the easing of pandemic restrictions that has reduced consumers' reliance on technology. "Many people are returning to offline buying behaviors, hurting e-commerce and tech stocks that did the best during lockdowns," he wrote.

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