First Mover: It's Still an Active Market

PLUS: Planning to Short Bitcoin? Better Check China's 'Tether Premium' First

February 25, 2021 Everything you need to make sense of the crypto markets and beyond Sponsored By: By the CoinDesk Markets Team Edited by Lawrence Lewitinn If you were forwarded this newsletter and would like to receive it, sign up here.  Bitcoin (BTC) -0.85%  $50,605 Ether (ETH)  -4.19%  $1,626.70 (Price data as of Feb. 25 @12:57 UTC) Good morning. Here's what we're writing about: Market Moves: It's Still an Active Market Muyao Shen: Planning to Short Bitcoin? Better Check China's 'Tether Premium' First Check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Lawrence Lewitinn and Emily Parker, at 9 a.m. U.S. Eastern time. Today the show will feature guests: Sam Bankman-Fried, CEO of FTX and Alameda Research Michele Schneider, managing director of MarketGauge Group MARKET MOVES In prehistoric times (that is, before October 2020), a $3,200 price range in bitcoin over the course of a day would be considered cataclysmic. However, given recent price action, such a move may seem like a welcomed respite. Nonetheless, it's worth noting that even the past day's trading is far from ordinary in an already extraordinary market. Bitcoin prices, Feb. 24 to Feb. 25, 2021. (CoinDesk)  Over the past 24-hours, bitcoin has stayed in a range between. $48,091.13 and $51,309.91, or 6.5% of current prices. In percentage terms, that's still nothing to sneeze at but relative to the $8,000 that happened Sunday into Monday, the $11,000 fall from Monday's high to Tuesday's low or even the $6,000 range from Tuesday into Wednesday, $3,200 feels like a quiet day at the office.   Spot market volume has also come off from turbulence earlier this week. The eight exchanges tracked in the CoinDesk 20 had a combined volume of just under $5.3 billion Wednesday, compared to $10.5 billion and $12.2 billion for Monday and Tuesday, respectively. Bitcoin volume, Feb. 1 to Feb. 24, 2021. (CryptoCompare via CoinDesk)  Spot volumes have soared since mid-December. Thus a $5 billion day in these eight exchanges was something that rarely happened. Well, at least since late 2017/early 2018. Bitcoin volume, Jan. 1, 2017 to Feb. 24, 2021. (CryptoCompare via CoinDesk)  The bitcoin futures market has also quieted a little bit. Total volume on the major futures exchanges was at $77 billion Wednesday compared to $184 billion Tuesday, according to data site Skew. Bitcoin futures volume, Feb. 18 to Feb. 24, 2021. (Skew)  Yet at $1.7 trillion (with a "t"), February is the second-highest month in volume terms and there's still a few more days to go. Bitcoin futures volume by month, May 2019 to Feb. 2021. (Skew)  The same holds true for the ether market. Spot prices ranged between $1,556.38 to $1,708.62 over the past 24 hours, a 9% range given current prices. Ether prices, Feb. 24 to Feb. 25, 2021. (CoinDesk)  Yet that's just a quarter of the range it faced at the start of the week. Ether prices, Feb. 18 to Feb. 25, 2021. (CoinDesk)  Volume on the eight CoinDesk 20 exchanges was at $2.5 billion in aggregate Wednesday, down from $5.4 billion Tuesday. Ether volume, Feb. 1 to Feb. 24, 2021. (CryptoCompare via CoinDesk)  But one would have to go back three years to see daily ether volumes regularly above $1 billion. Ether volume, Jan. 1, 2017 to Feb. 24, 2021. (CryptoCompare via CoinDesk)  Bitcoin prices, Feb. 23 to Feb. 24, 2021. (CoinDesk)  The bottom line: Everything is relative and it's still a relatively active market. --Lawrence Lewitinn SPONSORED BY NEXO Your digital assets deserve a savings account in their BEST INTEREST. 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Bitcoin's rapid recovery from the biggest two-day sell-off in almost a year shows the power of a recently overlooked factor in cryptocurrency markets: demand from Chinese retail traders.   The sudden demand for bitcoin (BTC) from Chinese traders, possibly motivated by the price drop, can be viewed through a hitherto largely ignored metric: the "tether premium" – or the difference between prices quoted in yuan on the dollar-linked stablecoin tether (USDT) by over-the-counter cryptocurrency traders, and the implied yuan-denominated price for tether based on the prevailing rate in global markets.      Under normal market conditions, tether should have depreciated against the yuan because the Chinese currency was appreciating against the dollar in foreign-exchange markets. However, tether denominated in Chinese yuan has traded at a premium since last week, ostensibly due to elevated demand from the country's traders, who routinely use the stablecoin as an on-ramp to crypto markets. The practice of trading directly from government-issued currencies is still banned in China.   Tether has been sold at premium on Huobi OTC since last Friday, according to a spokesperson from the parent crypto exchange Huobi. The premium went as high as 2% on Tuesday. Under normal market conditions, the premium is zero or negligible. Huobi OTC's USDT-Chinese Yuan rate in the past 45 days shows that tether has become more expensive since last week. (Source: Price Dancing) At OKEx, another Asia-focused cryptocurrency exchange, its over-the-counter desk also saw rising prices for tether, when denominated in Chinese yuan.    The renewed interest in bitcoin and other cryptocurrencies from the retail market in China, which was the main driver of the last crypto bull market in 2017, might stem from mainstream media coverage in China, said Mable Jiang, a principal at crypto investment firm Multicoin Capital. She pointed out that people in China have been buying the market dip in the past few days.   In a rare report on Sunday, CCTV 2, the state-controlled finance television channel, gave an update on the bitcoin market, claiming the cryptocurrency's return since March 2020 has surpassed 1,300%. The stated performance record reflects what is perhaps the most bullish framing of bitcoin's price run because it uses last year's lows as the starting point and goes through the recent all-time high price above $58,000. But it's not wrong.    The TV channel's report continued by elaborating on Bill Gates' changing attitude towards bitcoin (he's neutral now instead of negative) and ARK Investment's Cathie Wood's support of bitcoin.   "As bitcoin continues rising, more and more corporates have announced that they are considering bitcoin as part of their asset allocation," the news anchor said on CCTV 2. --Muyao Shen The full version of this story can be found here: https://www.coindesk.com/short-bitcoin-check-china-tether-premium BIGGEST MOVERS These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Gainers: Litecoin (LTC): +4.14% Kyber Network (KNC): +0.48% Losers: Cosmos (ATOM): -8.43% 0x (ZRX): -6.63% Orchid (OXT): -6.34%   The CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20. These assets constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges. BOLO Be on the lookout for these events today:   15:00 UTC (10:00 a.m. ET): U.S. House Financial Services Committee hearing on domestic terror finance.  What to look for: The Subcommittee on National Security, International Development and Monetary Policy will be asking five expert witnesses questions about how "domestic terrorism" is funded by cryptocurrencies. Treasury Secretary Yellen has tied cryptocurrencies to domestic terrorism three times in recent weeks.  LATEST HEADLINES Coinbase's Financials Are Now Public Ahead of Stock Market Listing "Although we generated net income of $322.3 million in 2020, we incurred a net loss of $30.4 million in 2019." Federal Reserve Explains 'Preconditions' for a Digital Dollar The U.S. central bank is grappling with how to proceed on a potential "digital dollar" project. Andreessen Horowitz Leads $25M Round in Ethereum Scaling Solution The titan of Silicon Valley VC is leading a major round in Optimism.  Nvidia Estimates Ethereum Miners Contributed 2%-6% of Q4 Revenue Nvidia expects $50 million in revenue from its new mining-specific product during its first quarter of sales Germany's Solarisbank Launches Licensed Crypto Brokerage With its close partnership with Bitstamp, Solarisbank is touting an instant "in-custody" settlement system. Mystery Over Why Blockchain Australia Revoked Membership of Crypto Project Qoin Qoin itself seems unsure why its membership was terminated, according to comments provided to CoinDesk.   Coinbase Has Held Crypto Assets Like Bitcoin on Its Balance Sheet Since 2012 The disclosure comes as Coinbase is preparing for a public listing in the U.S.   Jim Cramer Tells GameStop to Buy Bitcoin Amid Latest Stock Surge Cramer's comments came as GameStop shares spiked 100% in late trading.   Benchmark Leads $50M Round for Digital Soccer Collectibles Platform Sorare Accel Partners and soccer star Rio Ferdinand also joined the Series-A investment round.   Bitcoin 'Too Volatile' to Be Global Medium of Exchange, Says Berkshire's Charlie Munger The 97-year-old vice chairman of Berkshire Hathaway said buying bitcoin is "the pursuit of the uneatable by the unspeakable."   Introducing First Mover, live daily on CoinDesk TV   From the world leader in crypto news and events, the all-new CoinDesk TV covers the rapidly evolving world of digital finance and its role in the global economy.   We cut through the hyperbole and confusion to explain what's happening in this fast-changing industry and why it matters to investors, companies and governments.   First Mover, CoinDesk TV's flagship show, gives investors the top global market, business and regulatory news stories impacting digital assets. Hosted by CoinDesk's Christine Lee, Lawrence Lewitinn and Emily Parker, the programming features daily dispatches from reporters and partners around the world and high-profile guests including top newsmakers, influencers, analysts, traders and trend watchers at crypto exchanges.   Watch First Mover every weekday at 9 a.m. ET on YouTube or CoinDesk.com. 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.  ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. First Mover   A newsletter from CoinDesk   See Previous Editions Copyright © 2021 CoinDesk, All rights reserved.    250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.