You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team and edited by Bradley Keoun, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to.
Bitcoin was up in crypto markets early Wednesday, bouncing after a 2.4% drop that appeared synced with a sell-off in U.S. tech stocks. Traditional markets also appeared to be pausing the recent retreat from risky assets.
The move down in digital assets has provided a “healthy reset after a fast and furious summer rally,” the cryptocurrency-focused investment firm Arca said Wednesday in a blog post. Bitcoin prices are still up about 42% year-to-date.
“This market still isn’t mature enough to absorb an increase of selling pressure from the market’s biggest investors,” Arca Chief Investment Officer Jeff Dorman wrote.
Bitcoin is suffering its worst two-week stretch since March, down 15% since the end of August, and anxious investors are once again scrambling to identify the 11-year-old cryptocurrency’s closest analog in traditional markets.
Is it a hedge against currency debasement, similar to gold? A disruptor of banks and the financial industry? A revolutionary innovation that should trade in line with tech stocks like Facebook, Amazon, Apple, Netflix and Google or even Tesla?
As the Federal Reserve pumped about $3 trillion of freshly created money into the global financial system this year in an effort to calm uneasy markets, the currency-debasement investment thesis garnered the most attention. Bitcoin outperformed the tech-heavy Nasdaq Composite index while trading broadly in line with the high-flying stocks.