Bitcoin Slips Below $43K as Ukraine Shadows Financial Markets

The latest moves in crypto markets, in context

February 17, 2022

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Good morning, and welcome to First Mover. Here's what's happening this morning:

Market Moves: Bitcoin slips as cryptocurrency trades in sync with tech stocks and geopolitical tensions over Ukraine cast a pall over broader financial markets.
Featured stories: Metaverse-related tokens nurse hangover after Super Bowl euphoria. Deflation comes to graphics-card prices as proof-of-stake transition starts to hit computer-processor market.

And check out the CoinDesk TV show "First Mover," hosted by Christine Lee, Emily Parker and Lawrence Lewitinn at 9:00 a.m. U.S. Eastern time. Today's show will feature guests:

Dante Disparte, chief strategy officer and head of global policy, Circle
Don Kaufman, co-founder, TheoTrade

Today's newsletter was edited by Bradley Keoun and produced by Parikshit Mishra.

Market Moves

By Lyllah Ledesma

Over the last 7 day days, bitcoin has struggled to reach above the $45,000 mark. (Messari)

Bitcoin (BTC) is down 2% on the day, falling in line with broader markets as traders continue to assess the geopolitical tensions between Russia and the U.S. over Ukraine.

Unable to break the $45,000 mark over the last seven days, bitcoin's relationship with global markets continues to strengthen, despite previously having been touted as an uncorrelated hedge against inflation.

Futures contracts tracking the U.S. S&P 500 share index fell by 0.5% on Thursday, and futures tracking the tech-stock-heavy Nasdaq 100 fell 0.6%.

"Bitcoin quite clearly is still viewed as a 'risk-on' asset at the moment and declining in line with broader assets and tech," said Jason Deane, analyst at Quantum Economics.

The world's largest cryptocurrency by market capitalization, bitcoin, was trading in the $44,300-$43,100 range over the past 24 hours. Ether (ETH), the second-largest cryptocurrency, was trading at $3,054 at press time, down 2.5% over the same period.

For the short-term, bitcoin's choppy trades in sync with equity markets could continue, according to Matthew Dibb, chief operating officer of Stack Funds. "However, we believe that crypto (BTC) is beginning to show some relative strength to other assets."

Dibb predicts that in the medium term, bitcoin will break $50,000 again, though a push past the all-time high near $69,000, set last November, may take a little longer.

Also read: BofA Says Chainlink Likely Driver for DeFi's TVL Growth to $203B

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Crypto Prices

Bitcoin (BTC)

See the latest price here

Ether (ETH)

See the latest price here

The following are the biggest movers in the CoinDesk 20 digital assets over the past 24 hours:

Biggest Gainers:

Asset	Ticker	Returns	Sector
Cosmos	ATOM	+5.0%	Smart Contract Platform
Filecoin	FIL	+1.0%	Computing

Biggest Losers:

Asset	Ticker	Returns	Sector
Algorand	ALGO	−5.0%	Smart Contract Platform
Litecoin	LTC	−3.9%	Currency
Polkadot	DOT	−3.5%	Smart Contract Platform

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.

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Latest Headlines

Metaverse hangover

By Sam Reynolds

Metaverse tokens are pulling back after a rally fueled by the crypto-heavy Super Bowl, which broke records for viewership ratings with an audience of 112 million.

Yield Guild Games, the eponymous token of the YGG gaming guild, a DAO that generates yield by providing laborers for play-to-earn games, was down 7% on-day, according to CoinGecko.

Axie Infinity's AXS token, the largest token for a play-to-earn game, posted losses of nearly 6% by the start of the European business day.

Sandbox's SAND and Decentraland's MANA followed, with losses of 5.8% and 2.5% respectively.

Metaverse stocks fell. Meta (formerly Facebook) is down 2% on the day and 5% for the last week. So far the stock has posted a 31% decline during the last month as confidence wanes in Mark Zuckerberg's ambition to transform Facebook into a metaverse-centric company.

HTC, the Taiwanese producer of virtual reality headsets that are considered an essential tool for VR-based vision of the metaverse was up 1% during the Asia trading hours. During the past half-year the stock is up nearly 80% as retail investors in Taiwan latch on to the idea of it being a proxy for the broader growth of the metaverse.

GPU Supply Improving as Proof of Stake Shift Continues

By Sam Reynolds

According to analysis by European tech research firm 3D Center, pricing for graphics cards continues to decline as supply improves because of slackening demand from miners preparing to shift towards proof-of-stake protocols.

The report said that while the median price for a graphics card is way above the manufacturer's suggested retail price, it's trending downwards — a 30% decline since December for median pricing of Nvidia cards and 37% for AMD.

During an earnings conference call with stock analysts on Wednesday, Nvidia said its cryptocurrency Mining Processors (CMP) revenue fell to $24 million in its fiscal fourth quarter, down 77% on quarter.

Chipmaker Intel has also recently announced that it's working on a mining application-specific integrated circuit (ASIC) for mining. Argo Blockchain (ARGO) and Block (SQ) will receive Intel's first ASICs when they are available later this year.

The OGs of NFTs get animated with the biggest stars from around the world in this entertaining new series from CoinDesk TV. Tune in Tuesdays in February at 4 p.m. ET.

ICYMI

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

Could Ukraine Be the Crypto Capital of the World? Colorado to Accept Tax Payments in Crypto by End of Summer

"First Mover" hosts speak to Ukraine Ministry of Digital Transformation Deputy Minister and Head of Diia City Project Alex Bornyakov, as geopolitical tensions weigh on global markets. Colorado governor Jared Polis (D) takes the hosts behind the scenes of 2022 ETHDenver and shares the state's plan to accept tax payments in crypto by end of the summer. Plus, crypto market analysis from Lennix Lai of OKX.

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.