First Mover Asia: Crypto Can’t Shake the Correlation Narrative; BTC, ETH Sink but Meme Coins Rise

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Good morning. Here’s what’s happening:

Prices: Bitcoin and ether fall slightly, but meme coins continue to rise.

Insights: Crypto is struggling with a stocks correlation narrative.

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.

?Bitcoin (BTC): $23,870 -1.3%

?Ether (ETH): $1,877 -2.0%

?S&P 500 daily close: 4,305.20 +0.2%

?Gold: $1,790 per troy ounce +0.5%

?Ten-year Treasury yield daily close: 2.82% +0.03

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at

Bitcoin and Ether Fall, but Meme Coins Are Rallying

By James Rubin

Most major cryptos were on the defensive for a second consecutive day, with bitcoin and ether both trading slightly lower from respective two-plus-month highs they reached less than 48 hours ago.

BTC was recently changing hands below $24,000 after cracking $25,000 on Sunday and down roughly a percentage point over the past 24 hours. Ether was trading under $1,900 less than two days after breaching $2,000 for the first time since late May, as investors large and small paused from more recent risk-embracing postures.

“The recent crypto rebound has hit a wall as retail traders continue to lick their wounds and institutions respect key technical levels,” Edward Moya, senior market analyst for foreign exchange Oanda, wrote in an email. “Bitcoin can’t yet break above the $25,000 level, but it seems to be maintaining a bullish trajectory here.”

Over the past seven days, ETH has outperformed BTC amid growing anticipation of the Merge, which will shift the Ethereum protocol from proof-of-work to a faster, more energy efficient proof-of-stake protocol. ETH’s total market capitalization is now 50% of BTC’s, approaching levels last seen in January. ETH’s market cap compared to BTC’s indicates the potential for a “flippening” event, where ETH’s total market cap exceeds BTC’s. In a report, FSInsight suggested that ether could approach bitcoin’s market cap over the next 12 months.

“The upcoming merge has led to elevated trading activity for ETH, especially in the options market, where the open interest surpassed BTC’s for the first time in history,” Arcane Research noted in a newsletter.

Other cryptos were mixed, with popular meme coins DOGE and SHIB continuing their recent surge and rising more than 13% and 3%, respectively. But MANA, YGG and SAND all recently fell more than 2.5%.

Futures tracking DOGE and SHIB recently had over $25 million in liquidations, data showed, suggesting part of the rally in them has stemmed from futures bets. But the two cryptos’ gains have also been confounding.


Stocks were mixed. The Dow Jones Industrial Average (DJIA) was slightly in the green after big box retailers Walmart (WMT) and Home Depot (HD) posted unexpectedly strong second-quarter earnings but the tech-focused Nasdaq down declined a fraction of a percentage point. The tech sector, which has largely correlated with crypto pricing, has been weathering disappointing results from major chip manufacturers.

Still, a 17-month low in housing starts offered investors the latest hopeful sign that the the U.S. economy was decelerating sufficiently for the Federal Reserve to scale back interest rate hikes at some point over the next six months. A decline in the July Consumer Price Index (CPI) last week suggested that the bank’s recent monetary hawkishness was slowing inflation. Travis Kling, founder and chief investment officer for Ikigai Asset Management, told “First Mover” on CoinDesk TV that these signs could “bode well for asset prices broadly and for crypto as well.”

Crypto news

The fallout from the terraUSD (UST) stablecoin collapse and wide-spreading price declines has slowed this month but is far from over. In an announcement on its website, cryptocurrency lending platform Hodlnaut said it had filed an application with the Singapore High Court to be put under judicial management, which is a form of protection from creditors. The application was filed on Aug. 13, five days after the company froze withdrawals, and will temporarily safeguard the lender from any legal claims.

Hodlnaut is the latest in a long line of crypto companies that have been stung by the recent market downturn, Singapore-based exchange Zipmex received creditor protection on Monday, while trading firm Three Arrows Capital owes billions of dollars to creditors after imploding in June due to leverage.

Later Tuesday, Stronghold Digital Mining (SDIG) said it was negotiating with its lenders over a possible debt restructuring or refinancing agreement that would keep the bitcoin miner afloat. Publicly traded miners have suffered in the bitcoin bear market, with their shares falling more than 60% on average this year, worse than bitcoin itself, which has lost less than half of its value. Stronghold’s share price has tumbled about 70%.

Also Tuesday, Acala’s native stablecoin, aUSD, came close to regaining its peg to the U.S. dollar. The Polkadot-based decentralized finance (DeFi) platform burned over 1.2 billion aUSD tokens that were minted by exploiters over the weekend who took advantage of a bug in one of the platform’s liquidity pools.

Oanda’s Moya struck an upbeat note despite bitcoin’s recent retreat, highlighting institutional interest in digital assets. “Pretty much everyone on Wall Street thought that the mid-June lows would get retested for bitcoin, but now it seems this dead cat bounce doesn’t want to stop,” he said. “It appears the institutional money is mostly behind this recent rebound, which suggests it could have a better chance of lasting.”

Biggest Gainers

Biggest Losers

Crypto’s Struggle With Correlation

By Sam Reynolds

Long ago, crypto was thought of as an asset to use in time of risk. When Cypriot authorities forced the country’s people to take a haircut on deposits in 2013, they turned to bitcoin to preserve wealth.

Now, things are different. Crypto is a different kind of asset. A risk asset like tech stocks. Not the safe haven it once was.

Nobody knows when this will end, or even if it will return to where it once was.

In an email to CoinDesk, Scott Sheridan, CEO of options trading platform Tastyworks, pointed to the bull market’s major equity valuations as a magnet for more capital, which in turn drives up prices. Sheridan, for his part, rejects the idea that crypto can be considered a safe haven given its volatility.

“Crypto, on the other hand, doesn’t have the same valuation metrics. It’s still in its infancy and so are its valuation models,” he said to CoinDesk via email. “That ambiguity, with respect to valuations, is what allowed for investors to justify chasing prices higher. If I’m right on that, then I would expect the volatility in crypto to outlast the volatility in equities, something you don’t want if you’re seeking a safe haven.”

Crypto and stocks will rebound together

Sheridan thinks crypto won’t turn around until equities do and market volatility subsides.

“Once we get back to a VIX [an index measuring volatility] near its mean of 18, then I think you’ll see equity prices stabilize and at that point, you might see crypto stabilize or begin moving higher. Until then, I think the combination of potential alpha in equity markets and the evolving state and subsequent turbulence in crypto are more geared toward speculation than they are sheltered from the storm,” he continued.

Speaking at this year’s Consensus festival, Galaxy Digital CEO Mike Novogratz predicted it will be in October when the U.S. Federal Reserve flinches first on raising interest rates. But that all depends on how inflation goes and how economies worldwide respond. With the People’s Bank of China taking a seemingly different approach than the Fed – lowering rates while the Fed raises them – it could be a while before things stabilize.

U.S. FOMC minutes released

11 p.m. HKT/SGT(3 p.m. UTC): U.S. FOMC minutes released

2 p.m. HKT/SGT(6 a.m. UTC): U.K. core consumer price index (July)

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

“First Mover” spoke with former CFTC Commissioner Dawn Stump on the future of crypto regulation and her new role at crypto risk monitoring firm Solidus Labs. Plus, a closer look at Celsius Network as a new court filing revealed the crypto lender holds $2.8 billion less in crypto than it owes to depositors.

Crypto Twitter Sees ‘Bearish Wedge’ Pattern in Bitcoin’s Price Recovery: The rising wedge – a pattern that has appeared in bitcoin’s price charts – has some analysts and traders calling for a renewed sell-off toward $16,400.

Jump Crypto Picked to Revamp Solana to Make Blockchain More Reliable: The crypto trading firm and builder is reupping its commitment after the once-hot blockchain hit potholes.

Acala Stablecoins Near $1 Peg After Community Burns 1.2B aUSD Minted by Exploiters: Developers said trace reports were underway to identify the transactions performed by the 16 wallet addresses connected to the exploit.

US Fed Opens Pathway for Crypto Banks to Tap Central Banking System: The central bank will create a three-tiered system for evaluating whether a financial institution should have access.

SEC Files Complaint Against Dragonchain for Unregistered Initial Coin Offering: The complaint alleges the blockchain startup failed to register more than $16 million in crypto asset securities.

Stop Attacking DeFi Founders for Complying With the Tornado Cash Sanction: Crypto projects are being criticized for censoring use of their websites.

“Dog coins vs $BTC over the last 30-days” (@cryptowat_ch) … “The series seems designed to resuscitate Kwon’s sullied image. In a 30-minute interview, filmed over two days, Yahoo Finance alum Zack Guzman asks Kwon questions including, “Are you an Elizabeth Holmes,” did lawyers counsel him against speaking to the press, and is it “fair” to say UST was valueless from the start.” (CoinDesk columnist Daniel Kuhn)


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