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First Mover Americas: Ether-Bitcoin Volatility Spread Slides, Bitfinex Shorts Surge

source-logo  coindesk.com 11 March 2022 14:05, UTC

Good morning, and welcome to First Mover, our daily newsletter putting the latest moves in crypto markets in context. Sign up here to get it in your inbox each weekday morning.

Here’s what’s happening this morning:

  • Market Moves: Ether-bitcoin implied volatility spread suggests investors are focused on macro factors. Bitcoin shorts surge on Bitfinex.
  • Featured stories: U.S. yield curve signals recession.

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:

  • David Gan, founder and general partner, OP Crypto
  • Pavel Kravchenko, co-founder, Distributed Lab

Market Moves

By Omkar Godbole

Major cryptocurrencies traded in familiar price ranges while traditional risk assets picked up a bid early Friday after Russian President Vladimir Putin reportedly said there were some "positive shifts" in talks between Russia and Ukraine.

While bitcoin bounced 1.3% to nearly $40,000, it remained locked in a six-week triangle pattern identified by Jan. 24 and Feb. 24 lows and Feb. 10 and March 2 highs. Ether, the second-largest cryptocurrency, also traded similarly.

The spread between the six-month ether and bitcoin implied volatilities fell to a two-year low of 13%, perhaps indicating that the cryptocurrencies' fortunes are more strongly tied to each other than before. Implied volatility refers to investors' expectations for price turbulence over a specific period.

Latest Headlines

  • UK FCA Orders Operators to Shut Down Crypto ATMs
  • OnlyFans Donated 500 ETH to DAO Supporting Ukraine
  • First Mover Asia: India Loses Foreign Investment, Chinese Indices Continue a Downward Trend; Cryptos Suffer an Off Day
  • Vitalik Buterin Asks Court For Leniency in Upcoming Sentencing of Virgil Griffith
  • Bessemer Commits $250M to Web 3, Launches DAO

US Treasury Yield Curve Close to Signaling Recession

By Omkar Godbole

The U.S. Treasury yield curve has collapsed, with the spread between yields on 10-year and two-year notes sliding to a two-year low and just 26 basis points short of inversion – a recession signal.

A curve inversion is when short-term borrowing costs rise above long-term borrowing costs.

In a note published Thursday, Goldman Sachs warned of a U.S. recession next year, putting the probability at 35%, according to Bloomberg. Further, the investment bank downgraded their growth forecast for 2022, citing soaring oil prices and economic fallout from the ongoing Russia-Ukraine military conflict.

Recession fears may bode well for assets with a safe-haven appeal. While bitcoin's link with the real economic activity is still relatively weak, the cryptocurrency tends to move or less in tandem with risk assets, mainly high-beta stocks, as discussed in Tuesday's First Mover edition.

U.S. Treasury yield curve, or spread between the 10- and two-year yields (Source: TradingView)

coindesk.com