Bitcoin Climbs Back Above $19.5K Amid New Haven Hopes

Prices: Bitcoin climbs past $19.5K in a good day for crypto.

Insight: Binance’s plan to burn a small amount LUNC’s inflated supply failed to have a lasting impact on the hyper-inflated token.

Prices

• Bitcoin (BTC): $19,566 +2.5%
• Ether (ETH): $1322 +3.0%
• CoinDesk Market Index (CMI): $963 +2.6%
• S&P 500 daily close: 3,678.43 +2.6%
• Gold: $1,707 per troy ounce +2.7%
• Ten-year Treasury yield daily close: 3.65% -0.2

Bitcoin, Ether and Gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the spot price for COMEX. Information on CoinDesk indices can be found at coindesk.com/indices.

Bitcoin and Ether climb amid renewed hopes of a Fed retreat

By James Rubin

Crypto investors who have prized bad economic news more than good in recent months felt fresher on Monday as the latest manufacturing indicators came in cooler than expected.

Bitcoin recently traded above $19,550, up more than 2% in the past 24 hours, amid a surprise monthly decline in the Institute for Supply Management’s manufacturing index, which measures factory activity. The fall didn’t send asset prices skyrocketing, but it did provide faint hope that the economy was slowing meaningfully, inflation would soon ease, and the US Federal Reserve would be able to reverse its recent monetary hawkishness. Markets have been desperate for signs of improvement in the inflation battle that Federal Reserve officials see as key to long-term economic stability.

Ether recently changed hands at just over $1,300, up about 3% from a day earlier at the same time. Most other major altcoins by market cap traded higher with ATOM and MATIC both rising more than 5%. The CoinDesk Market Index (CMI), a broad-based market index that measures performance across a basket of cryptocurrencies, rose over 2.5%.

Crypto prices, which have tracked stocks for much of the year, continued the trend with the tech-focused Nasdaq, S&P 500 and Dow Jones Industrial Average (DJIA) jumping 2.3%, 2.6% and 2.7% respectively. The gains followed a September of almost uninterrupted declines as investors continued to worry about rising prices and the prospect of a hard recession.

Meanwhile, yields on 10-year US Treasuries fell, continuing their trajectory in recent days after rising to 15-year highs late in previous months. Yields and asset prices usually move in opposite directions. The decline may also reflect an increase in investor confidence that Fed policy is working.

Markets remained jittery about Credit Suisse as the investment banking giant tried to allay fears about its financial health, although the company’s share price ended up only falling about 1%. In Florida, the toll from Hurricane Ian continued to rise, although the cost of repairs and lost economic growth remains unclear.

In an email to CoinDesk, Jon Campagna, partner and head of trading and capital markets at crypto investment firm CoinFund, optimistically noted that bitcoin and crypto in general have struggled in September, but had their best performance in the last quarter of the year with an average quarterly return of more than 100%. “It remains to be seen if history can repeat itself for Q4 as it did for the month of September,” he wrote.

And Anastasia Amoroso, investment strategist at financial technology firm iCapital, told CoinDesk TV’s First Mover program that bitcoin’s price was “much closer to the bottom than we’ve been, although she added that bitcoin was unlikely to escape the $19,000 to $20,000 band that it has occupied.” even unless the Fed swings.”

“Until then, I think, unfortunately, we’re still going to be held around these current levels,” she said.

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Insight

Binance’s failed scheme to increase the price of Luna Classic

By Krisztian Sandor

Crypto exchange Binance’s planned “burning” of luna classic (LUNC) – the remaining cryptocurrency of the failed blockchain project Terra before it was restarted – was set to boost its price. At least that was the speculation of many crypto traders.

But the impact turned out to be overwhelming.

Since the mechanism was implemented a week ago, Binance — “burned” in crypto terms, or a reduction in the outstanding supply — destroyed $1.8 million worth of LUNC, based on a tweet Monday by Binance CEO Changpeng “CZ” Zhao. This amount represents only 0.08% of the total supply of the token, too little to have any measurable impact on the tokens hyper-inflated supply.

The price of LUNC fell 12% in the last 24 hours, to $0.0003037, according to cryptocurrency price tracker CoinGecko.

LUNC is the original token of the Terra Classic blockchain, which imploded in May, wiping out $60 billion in market capitalization; The project’s algorithmic stablecoin lost its peg to the dollar, and LUNC, the token that was supposed to be the stabilizer, fell into hyperinflation. While most crypto developers and projects left the blockchain, some community members tried to bring new life to the network by introducing a scheme that reduces the inflated supply of the token.

LUNC nearly doubled in price last week after Binance, the world’s largest crypto exchange by trading volume, unveiled its own supply reduction scheme, CoinDesk reported last week. The crypto exchange implemented a mechanism that destroys the same amount of coins as the fees it collects from trading LUNC.

LUNC became the third most traded asset on Binance by trading volume after bitcoin (BTC) and ether (ETH), according to data from CoinMarketCap.

The burn was calculated based on the token’s trading volume between September 21st and October 1st. So Binance took 5.6 billion tokens out of circulation by sending them to a “burn” address, according to blockchain data.

Given that there are more than 6.8 trillion tokens in circulation, the burn rate works out to a meager 0.08% of the total supply – extrapolating to just a few percentage points of year-over-year reduction.

Binance’s scheme “is meaningless in its direct impact,” a crypto trader who goes by the pseudonym Ogle told CoinDesk in a Telegram chat.

“At this rate, assuming the volume continued to be as high as now (which I doubt), it will take 15 years to reach the total burn target.”

Important events

MetaBeat Conference (San Francisco)

11:30 HKT/SGT(03:30 UTC): Interest rate announcement from the Reserve Bank of Australia

9 a.m. H1HKT/SGT(13:00 UTC): Speech by Federal Reserve Bank of New York President John C. Williams