coindesk.com
Good morning. Here’s what’s happening:Prices: Bitcoin drops below $29.5K as investors' appetite for riskier assets lessens.Insights: What crypto projects are solving particularly important problems? Consensus Magazine presents 19 that bear watching in 2023.PricesIs Bitcoin Entering a New Range?
After a week-long rise above $30,000, bitcoin dipped below the psychologically important threshold.
The largest cryptocurrency by market capitalization was recently trading at about $29,400, down about 1.9% over the past 24 hours. BTC dipped below $29,300 at one point as banking unrest subsided, treasury yields rose and investors shied away from riskier assets.
"Cryptos are losing some appeal as banking turmoil risks appear to be disappearing," Edward Moya, senior analyst at foreign exchange market maker Oanda, wrote in an email. "Fed lending to banks continues to ease and earnings has not revealed any major strains with the early banks that have reported. Also dampening the appeal for crypto is the surge behind Treasury yields, which is dampening the appeal for most risky assets.
Moya noted that a number of major banks reported solid first quarter earnings, including Wells Fargo and Citigroup and that "emergency lending is decreasing."
"The mid-and small banks are about to report and while we are about to see some serious deposit outflows, the focus is not about bank solvency, but on banking profitability," Moya wrote.
Ether was recently changing hands at about $2,075, off the better part of a percentage point. The second largest crypto in market value has yet to see many ill effects from the recent Ethereum Shanghai upgrade, the final step in the blockchain platform's transformation from a proof-of-work to a more energy efficient proof-of-stake protocol.
Other major cryptos were in the red, albeit lightly so. ARB, the token of the layer 2 Ethereum scaling protocol Arbitrum, and ADA, the native crypto of the Cardano blockchain, both recently declined about 3%. The CoinDesk Market Index, a measure of the crypto markets overall performance, was recently down 1.6%.
Equity markets inched upward as investors chewed over the encouraging bank earnings and the possibility that the U.S. central bank might continue raising interest rates to tame inflation. In last month's near banking meltdown, that prescription seemed less likely. Meanwhile, the 10-year Treasury yield has increased three straight days to 3.59%, while gold, which a week ago neared its all-time high, has edged downward to just above $2,000.
Oanda's Moya was wary about bitcoin's near-future path forward. "Bitcoin looks like it might be consolidating, possibly settling on a new range between the $26,500 and $31,000 region," he wrote.
Biggest Gainers
| Asset | Ticker | Returns | DACS Sector | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Decentraland | MANA | +7.3% | Entertainment | Gala | GALA | +5.0% | Entertainment | Loopring | LRC | +4.3% | Smart Contract Platform |
InsightsCrypto Innovation Thrives: Here Are 19 Projects to Watch
For the past three years the Pew Research Center has polled Americans about their exposure to cryptocurrency. The percentage of people who have “ever invested in, traded or used a cryptocurrency such as bitcoin or ether” has remained roughly 16% since 2020. But this spring, Pew sought to identify how people feel about crypto. Among the 88% who have ever heard of cryptocurrency, 75% are “not very or not at all confident that cryptocurrencies are reliable or safe.” Only 6% are very confident.
Trust in crypto is very low.
The CoinDesk editorial team didn’t need a poll to see this. Our Most Influential 2022 list, published in December, subjectively identified the 50 people who defined the year in crypto. A significant percentage of the list was feel-bad stories of scammers and hucksters and possible sociopaths who depleted customer’s savings. The list came out less than a month after the sudden and shocking collapse of FTX, capping off a year of scandals. Understandably in response, Congress, mainstream media and the public are ready to punish crypto.
To state the obvious, 2022 was the antithesis of crypto, which was invented as a remedy in 2009 to broken global financial systems and not to make sharks and charlatans rich. Bitcoin made peer-to-peer transactions possible, bypassing banks that make the transfers slow, costly and intrusive. By solving the trusted-mediator problem, bitcoin allowed transactions to be quicker and cheaper and therefore more accessible.
The CoinDesk team set about to find projects that fulfill the ethos of crypto by solving a problem. In brainstorming sessions, we debated what problems crypto could be employed to solve, which quickly split into two baskets: problems within the crypto ecosystem itself, and problems in the world generally.
Then the team explored the merits of projects aiming to solve the identified problems. From a list of more than 35 projects, we selected 19. Some haven’t launched yet, others have been around for years. Funding ranges from bootstrapped to tens of millions of dollars, to undisclosed support from a parent foundation or project. We didn't put a lot of restrictions or parameters on these projects. Crypto organizations come in many forms (from traditional startups to DAOs to major corporations). It is still relatively new and many of its brands – even if valued in the billions of dollars – are not widely recognized.
What the CoinDesk team looked for are innovative ideas, convincing proposals or evidence of success, and talented, committed people. Moreover, the problems the projects were aiming to solve had to be real, and the remedies needed. They could not just be a crypto version of something that is adequately managed in traditional finance, for instance, or purely meant for speculation or fun.