Bitcoin settles below $29.5K as appeals to riskier assets wane

Good morning. Here’s what happens:

the prices: Bitcoin drops below $29.5K as investors’ appetite for riskier assets decreases.

ideas: What crypto projects solve particularly important problems? Consensus Magazine presents 19 You Must Watch in 2023.

Is Bitcoin entering a new range?

After a one-week rally above $30,000, bitcoin has fallen below the symbolic threshold.

The largest cryptocurrency by market cap was recently trading around $29,400, down about 1.9% over the past 24 hours. BTC fell below $29,300 at one point as banking turmoil subsided, Treasury yields rose and investors moved away from riskier assets.

“Cryptocurrencies are losing some of their appeal as the risks of banking disruptions appear to be fading,” Edward Moya, senior analyst at foreign exchange market maker Oanda, wrote in an email. “The Fed’s lending to banks continues to ease and earnings did not reveal any significant pressure with early banks reporting this. Also mitigating the appeal of cryptocurrency is the rally behind Treasury yields, which reduces the appeal of riskier assets.”

Moya noted that a number of major banks posted strong earnings in the first quarter, including Wells Fargo and Citigroup, and that “emergency lending is decreasing.”

“Medium and small banks are on the verge of reporting, and while we are about to see some serious deposit inflows, the focus is not on the solvency of the banks, but on the profitability of the banks,” Moya wrote.

Ether was recently trading at around $2,075, less than the better part of a percentage point. The second largest cryptocurrency by market cap has yet to see many ill effects from the recent Ethereum Shanghai upgrade, the latest step in the blockchain platform’s shift from Proof of Work to a more energy efficient Proof of Stake protocol.

Other major cryptocurrencies were in the red, albeit slightly. ARB, the Ethereum Layer 2 Scaling Protocol token, and ADA, the native crypto of the Cardano blockchain, both recently fell around 3%. The CoinDesk Market Index, which is a measure of the overall performance of cryptocurrency markets, is down 1.6% recently.

Stock markets jumped higher as investors were chewing on encouraging bank earnings and the prospect of the US central bank continuing to raise interest rates to tame inflation. In the past month’s near bank collapse, that prescription seemed less likely. Meanwhile, the 10-year Treasury yield rose for three straight days to 3.59%, while gold, which a week ago approached an all-time high, fell to just over $2,000.

Oanda’s Moya was concerned about Bitcoin’s trajectory in the near future forward. He wrote: “Bitcoin looks likely to consolidate, possibly settling on a new range between $26,500 and $31,000.”

Crypto innovation boom: Here are 19 projects to watch

For the past three years, it has been Pew Research Center It surveyed Americans about their exposure to cryptocurrency. The percentage of people who have “invested in, traded in, or used a cryptocurrency such as bitcoin or ether” has remained around 16% since 2020. But this spring, Pew sought to determine how people feel about digital currencies. Of the 88% who have heard about cryptocurrencies, 75% are “not completely or not at all confident that cryptocurrencies are reliable or safe.” Only 6% are very confident.

Trust in encryption is very low.

The CoinDesk editorial team didn’t need a poll to see this. Our Most Influential List of 2022, published in December, personally identified the 50 people who defined the year in crypto. A large percentage of the list were disturbing stories about scammers, would-be peddlers and sociopaths who had depleted customers’ savings. The list was released less than a month after the sudden and shocking implosion of FTX, capping off a year of scandal. In response, it is understandable that Congress, the mainstream media, and the public are willing to sanction cryptocurrencies.

To state the obvious, 2022 was the antithesis of cryptocurrency, which was invented in 2009 as a remedy for broken global financial systems and not to make sharks and charlatans rich. Bitcoin has made peer-to-peer transactions possible, bypassing banks that make transfers slow, expensive, and intrusive. By solving the problem of a trusted middleman, Bitcoin has allowed transactions to be faster, cheaper, and therefore easier to access.

The CoinDesk team set out to find projects that catered to the spirit of crypto by solving a problem. In brainstorming sessions, we discussed problems that cryptography could be employed to solve, which quickly split into two baskets: problems within the crypto ecosystem itself, and problems in the world in general.

The team then explored the advantages of projects aimed at solving the identified problems. From a list of over 35 projects, we picked 19. Some of them haven’t been launched yet, while others have been around for years. Funding ranges from funding to tens of millions of dollars, to undisclosed support from an original foundation or project. We didn’t put a lot of restrictions or standards on these projects. Crypto organizations come in many forms, from traditional startups to decentralized independent organizations (DAOs) to large corporations. It’s still relatively new and many of its brands — even if they’re valued at billions of dollars — aren’t widely recognized.

What the CoinDesk team looked for were innovative ideas, compelling proposals or proofs of success, talented and committed people. Moreover, the problems that the projects aim to solve must be real, and the necessary remedies. It can’t just be a crypto version of something that’s appropriately managed in traditional finance, for example, or that’s only for speculation or fun.

Read the full article here:

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