First Mover Americas: Bitcoin Slides After Wednesday's Tech Rout

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Bitcoin (BTC) fell to just above $64,000 amid a stock market rout and weakening sentiment for risk assets, including cryptocurrencies. The plunge led to over $250 million worth of bullish bets being liquidated, the worst hit since early July. Bitcoin is priced around $64,200 at the time of writing, a drop of almost 3.5% in the last 24 hours. The broader digital asset market, as measured by the CoinDesk 20 Index (CD20), has fallen 5.6%. The slump follows the tech-heavy Nasdaq 100 index posting its biggest drop since 2022 after Google parent company Alphabet and Tesla reported mixed quarterly earnings.

Ether (ETH) has fallen over 8% in the last 24 hours, faring worse than the wider crypto market, following $810 million worth of outflows from Grayscale's Ethereum Trust ETF (ETHE). Most of the other ETH ETFs continued in the green during the Wednesday session, with BlackRock's ETHA leading the pack at $283.9 million of net inflows, followed by Bitwise's ETHW at $233.6 million and Fidelity's FETH with $145.7 million. ETHE bucking this trend echoes the plight of Grayscale's bitcoin equivalent, GBTC, which experienced heavy outflows when it listed earlier this year. Ether is trading at $3,165 at the time of writing.

The aggregate market capitalization of the stablecoin sector, which includes hundreds of coins, jumped to over $164 billion for the first time since the collapse of Terra in May 2022, according to data source DefiLlama and trading firm Wintermute. It had been languishing around the $160 billion mark. The expansion "indicates growing investor optimism, underpinning a bullish outlook," Wintermute said in a note shared with CoinDesk. "The increase in stablecoin supply indicates that money is being deposited into on-chain ecosystems to generate economic activity, either through direct on-chain purchases that can catalyze price appreciation or yield-generation strategies that could improve [market] liquidity. This activity ultimately fosters positive on-chain growth."

Chart of the Day

• Activity in Chicago Mercantile Exchange's ether futures reached new heights on Tuesday as the debut of spot ETH ETFs in the U.S. galvanized investor interest in the second-largest cryptocurrency.
• The previous peak of 7,550 contracts was set one month ago. The standard contract is sized at 50 ETH.
• CME witnessed 14,736 contracts change hands on Tuesday, which is three times higher than the average daily volume of 5,010 contracts seen throughout July. Tuesday was also one of the top 10 volume days for ether futures.
• Giovanni Vicioso, global head of cryptocurrency products at CME Group, attributed the surge in activity to the onset of spot ether ETF trading in the U.S.
• Source: Chicago Mercantile Exchange

- Omkar Godbole

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