1. First Mover Asia: Crypto Traders Laying Low While Fed Ponders; Bitcoin, Ether Gain
A move by the U.S. central bank to ratchet up interest rates could lead investors away from cryptocurrencies, which are considered riskier investments.
Market moves: Bitcoin moved above $47,000 a day before a Fed decision on combating inflation.
Technician’s take: Bitcoin’s tight price range could persist into the Asia trading day.
Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.
Prices
Bitcoin (BTC): $48,304 +2.8%
Ether (ETH): $3,843 +1.1%
Markets
S&P 500: $4,634 -0.7%
Dow Jones Industrial Average: $35,544 -0.3%
Nasdaq: $15,237 -1.14%
Gold: $1,771 -0.8%
Market moves
Bitcoin recovered some losses from Monday, trading above $48,000 on Tuesday. But the optimism may be short-lived as trading volume remained low.
Data compiled by CoinDesk shows that bitcoin’s trading volume across major centralized exchanges on Tuesday was down from a day ago, reflecting a conservative view among traders.
The U.S. Federal Reserve is expected to release its decision on Wednesday on whether it will move faster to wind down its bond purchases and signal if it will start raising interest rates next year. The stock market extended its losses on Monday as investors were closely monitoring the Fed’s upcoming decision.
2. Market Wrap: Cryptocurrencies Stabilize as Traders Await the Fed
Analysts are cautious about crypto prices as risk appetite wanes.
Bitcoin traded in a tight range around $46,000 on Tuesday. Some traders prefer to remain on the sideline until the U.S. Federal Reserve concludes its two-day monetary policy meeting on Wednesday, which could be a source of market volatility.
Despite relative calm in crypto markets, equities traded lower as the CBOE Volatility Index (VIX) remained elevated around the 20 level. It appears that investors are in no rush to increase their risk exposure ahead of any Fed announcement out of the meeting.
Also, economic headwinds continue to linger. “The failure of inflation to recede as anticipated will put central banks in a more aggressive tightening stance, causing a sharply negative reaction in financial markets and most likely a significant economic recession,” Deutsche Bank warned in a Tuesday report.
In crypto, there are also signs of caution. “In the last week, the stablecoin dominance also increased by 0.64%, indicating a flight to safety in the crypto markets,” Arcane Research wrote in a report.
Latest prices
Bitcoin (BTC): $47,854, +2.61%
Ether (ETH): $3,838, +2.09%
S&P 500: $4,634, -0.75%
Gold: $1,771, -0.80%
10-year Treasury yield closed at 1.43%
Altcoins have continued to struggle after the sell-off earlier this month, which could reflect a lower appetite for risk among investors.
Still, there has been one bright spot in the CoinDesk 20 this month. Polygon’s MATIC token has outperformed its peers since the crypto exchange-traded product (ETP) issuer 21Shares announced it was listing a product linked to the cryptocurrency’s performance on Euronext exchanges in Paris and Amsterdam.
3. Bitcoin Miner CleanSpark 2021 Revenue Rises 400%
The sustainable bitcoin mining company nearly reached its goal of generating $50 million in revenue for the fiscal year, but also recorded a net loss of $21.8 million.
CleanSpark’s total revenue rose 400% in its 2021 fiscal year, but the sustainable bitcoin mining and energy technology company also recorded a net loss of $21.8 million, or $0.75 per share, it announced on Tuesday.
For the year ended Sept. 30, CleanSpark generated $49.4 million in revenue, up from about $10 million the previous year. More than $27 million came in its fourth quarter as bitcoin’s price rose. The net loss was slightly less than the $23.3 million or $2.44 per share loss for its 2020 fiscal year.
CleanSpark’s adjusted EBITDA for the year was $9 million or a $0.31 gain per share versus a $10.2 million, $1.07 loss per share compared with the same period a year ago.
The company has been expanding significantly over the last eight months. In April, it signed contracts to purchase 22,680 bitcoin mining machines.
In August, CleanSpark acquired a second data center in Norcross, Ga. for $6.5 million, and over the last two months has purchased additional mining machines. More recently, it announced that it had bought 20-megawatt, immersion cooling infrastructure for the Norcross facility to boost its mining efficiency by over 20%.
The company’s current has a current hashrate of 1.3 exahash per second, which it intends to increase with its additional mining power.
In an earnings call Tuesday, CleanSpark CEO Zach Bradford called CleanSpark “incredibly undervalued” and highlighted the company’s energy expertise. “We are deploying advanced technologies like renewable energy assets and immersion cooling to make our operations more efficient,” Bradford said. “These efficiency enhancements are expected to increase production and decrease operating costs at all our facilities.”
4. BCB Group Expands in Europe With Acquisition of 100-Year-Old German Bank
The German regulator is expected to approve the transaction by the end of February.
BCB Group, the crypto-dedicated payments services provider, has acquired fintech-focused Sutor Bank, gaining control of a German bank to drive its expansion in the European Union.
Terms of the deal, which requires approval from the German regulator, BaFin, were not disclosed. BCB said it expects the transaction to be cleared by the end of February.
“Adding a fully licensed bank to the group will enable BCB Group to better service its clients in the EU and drive growth across its business line,” the company said in a statement.
The London-based company has witnessed a huge jump in volume growth, and in February this year processed over $4 billion in payments and trades, according to a press release. In March it raised $4.5 million as it sought to attain more licenses and make a push into Switzerland and Singapore.
Hamburg, Germany-based Suto was founded in 1921.
Moonpay, a cryptocurrency payments app, entered into a strategic partnership with BCB Group in June this year. The partnership involved Moonpay taking a sizable stake in BCB Group and terms of the deal were also not disclosed.
5. Animoca Brands Leads $130M Investment in Venture Accelerator Brinc for Web 3 Expansion
The funds will be used to lead Brinc’s expansion into DeFi and crypto gaming.
Venture accelerator Brinc closed a $130 million funding round, led by NFT and metaverse investor Animoca Brands.
Brinc closed a $30 million Series B and a further $100 million for startup investments, the company said.
The funds will be used to aid Brinc’s expansion into new locations and Web 3, which includes blockchain-focused programs in decentralized finance (DeFi), gaming and more.
Metaverse refers to an immersive digital world created by the combination of virtual reality, augmented reality and the internet, while DeFi is a blanket term that refers to financial activities carried out on blockchain without traditional middlemen.
The investment from Animoca Brands continues the two firms’ ongoing partnership, following the joint development of an NFT launchpad.
Hong Kong-headquartered Brinc claims to have supported the growth of more than 200 startups since its launch in 2014.
The Brinc investment comes after Animoca and Binance Smart Chain started a $200 million program to invest in blockchain gaming projects.
Also based in Hong Kong, Animoca Brands is an investor in NFTs and metaverse projects and has a majority stake in metaverse game The Sandbox. It received a valuation of $2.2 billion during a $65 million funding round in October.
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