First Mover Asia: Bitcoin Hovers Around $28,000

Good morning. Here’s what’s happening:

Prices: The crypto market is ending the week flat.

Insights: Stefan Rust, CEO of data aggregator TruFlation, suggests that TradFi may be approaching a tipping point and that bitcoin may benefit.

Prices

By Sam Reynolds

CoinDesk Market Index (CMI) 1,213 −2.1 ▼ 0.2% Bitcoin (BTC) $28,303 −3.4 ▼ 0.0% Ethereum (ETH) $1,813 +28.2 ▲ 1.6% S&P 500 4,050.83 +23.0 ▲ 0.6% Gold $1,998 +31.9 ▲ 1.6% Nikkei 225 27,782.93 −100.8 ▼ 0.4% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Both bitcoin and ether are opening the Asia business day fairly flat, with bitcoin flat at $28,303 and ether up 1.6% to $1,813.

Stock markets in Asia are in the green, with the Nikkei 225 opening 1%.

Bitcoin is likely dormant, and awaiting major economic news for its next move, because of low liquidity. As Kaiko noted earlier this week, bitcoin trading is at its lowest level in eight months after crypto exchange Binance reintroduced trading fees. This is on top of the existing liquidity woes bitcoin now faces, as fiat pipelines dry up.

Looking ahead to the next week there are a number of economic events that should spur traders’ interest.

John Williams, president of the Federal Reserve Bank of New York , is scheduled to speak Friday afternoon U.S. time, along with Federal Reserve governors Lisa Cook and Christopher Waller later in the day. Traders often read the tea leaves from these engagements to see what’s coming ahead.

With the U.S. government taking an apparent stand against crypto, traders are no doubt looking to see if there’s anything that can disprove this and show that authorities plan to treat the asset class fairly.

Insights

Stefan Rust Has a Few Things to Say About Banks and Crypto

By James Rubin

Has crypto really, finally, truly reached its breakthrough moment?

Stefan Rust, a crypto investor and CEO of data aggregator TruFlation suggested that traditional finance may be approaching a tipping point amid multiple bank failures in the U.S. and near meltdowns at two banking giants in Switzerland and Germany, and that investor worries lie at the root of this week's surge in crypto prices.

“It seems people are realizing that the banking crisis isn't really over and, given all the noise out there, a lot of people are starting to question the approach that they're taking to their savings and wealth management," Rust wrote. "I think many techprenuers and SVB clients will move some of their savings into crypto.

He added: "Indeed, there already seems to be a demand to move some of this across into bitcoin and Ether on-chain, which could explain some of the recent price rises – especially as former SVB (Silicon Valley Bank) clients are receiving their savings back from the FDIC (Federal Deposit Insurance Corp.) right now."

Rust noted that the collapse of crypto-friendly banks have eliminated valuable resources for investors and others eager to participate in the digital-asset ecosystem and alluded to rising regulatory pressures in the U.S. that may be creating obstacles to the industry's growth. "Many are trying to navigate the on and offramp situation and find loopholes," he wrote.

The byproduct of this turn of events could benefit Hong Kong, whose leading financial regulatory agency, the Securities and Futures Commission, has recently proposed new, more crypto-friendly regulations. The SFC is seeking public comment on the rules, which could establish a new licensing regime for crypto service providers and allow licensed platforms to serve retail investors under certain protections.

"A lot of Asian customers that had crypto in SVB are now moving funds to Hong Kong where they can set up accounts and use the Hong Kong banking system to on and off ramp," Rust wrote. "Indeed, it's interesting to see that during these times, as the Western banking world is experiencing another crisis, that a small tax haven in China like Hong Kong is inviting crypto companies to work with them to identify new regulations that could be put in place to build a sustainable crypto economy."

Rust expects the recent unsettled relationship between decentralized finance, or DeFi, and TradFi to steady. "Over the long term, there will be a whole new on and offramp system between DeFi, crypto and the fiat world, as trust in centralized, regulated institutions has definitely had its back broken," he wrote. "There is no longer a need to keep all your funds in one bank, one central entity that holds all of your assets in custody, as who knows what will happen with that entity and ultimately your savings."

He added: "Markets always take a bit of time to readjust, reacquire confidence and find new paths and funding streams. Money will always move uphill, however.”

Important events.

Miami NFT Week

Metaverse Fashion Week by Decentraland

Speech by Federal Reserve Board Governor Christopher Waller

HKT/SGT(UTC)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

XRP Trading Volumes Spike to Billions of Dollars on South Korean Crypto Exchanges; SBF Legal Developments

Trading volumes for XRP spiked to billions of dollars on Upbit, Bithumb and Korbit, three of Korea’s top exchanges by volume, on the back of the token's 26% rise in the past week. Gracy Chen, managing director at Bitget, and Mark Connors, head of research at 3iQ, joined the conversation. Plus, Nansen's Jason Meng discussed Binance's on-chain balance following the Commodity Futures Trading Commission lawsuit against the crypto exchange. And "First Mover" offered an update on Sam Bankman-Fried's legal developments ahead of a status hearing on Thursday.

Headlines

Circle’s USDC Remains Dominant in DeFi as Pressure Eases on the Stablecoin: USDC, the key stablecoin in decentralized finance, temporarily lost its dollar peg earlier this month after the collapse of its key banking partner.

Bitcoin Miner TeraWulf Reports 146% Increase in Revenue as It Ramps Up Operations: The company reiterated its 5.5 EH/s computing power target for the second quarter of this year.

3 Strategies Crypto Firms Can Use to Land a New Banking Partner: After the recent collapse of three crypto-friendly banks, many firms are left hunting for new banking partnerships.

Bevy of Economic Data Barely Stirs Bitcoin, Ether: Bitcoin and ether trade flat on below-average volume after GDP contracts slightly and initial jobless claims exceed expectations.