Crypto traders are betting on WC-themed tokens. What is driving the interest?
Good morning. Here’s what happens:
Prices: Bitcoin rose significantly for the second day in a row, despite disappointing earnings from the technology sector.
Insight: What is driving crypto traders’ interest in World Cup-themed tokens?
Prices
CoinDesk Market Index (CMI)
1,022.42 +38.3 3.9
Bitcoin (BTC)
$20,825 +731.6 3.6
Ethereum (ETH)
$1575 +113.5 7.8
S&P 500 daily close
3,830.60 -28.5 0.7
Gold
$1669 +16.2 1.0
Treasury Yield 10 years
4.01 0.1
BTC/ETH prices per CoinDesk indices; gold is the COMEX spot price. Prices from approximately 4:00 PM ET
Bitcoin continues its high-flying ways
By James Rubin
Bitcoin (BTC) continued its recent mini-rally, topping $21,000 at one point after Canada’s central bank raised interest rates less sharply than expected and despite disappointing earnings late Tuesday by Google parent Alphabet and software giant Microsoft.
The largest cryptocurrency by market capitalization recently traded at around $20,800, up more than 3.5% in the past 24 hours after the Bank of Canada approved a 50 basis point (BPS) hike instead of 75 BPS. The bank noted its concerns about the slowdown in the economy. Central bankers around the world have tried to tame inflation without triggering a steep recession. On Tuesday, BTC topped $20,000 for the first time since October 5th.
“Economic growth is expected to stall through the end of this year and the first half of next year as the effects of higher interest rates ripple through the economy,” the Bank of Canada said in a statement, noting progress in cutting inflation below 7% and underlining concerns about falling economic growth.
Ether (ETH) recently changed hands at $1,575, a gain of nearly 8% from the same time on Tuesday, and went on to gain more than 11% the next day. The second largest crypto by market capitalization has reached its highest level since mid-September.
Most major altcoins was well in the green, with popular meme coins DOGE and SHIB recently up more than 14% and 5%, respectively. The former’s progress comes amid the nearing completion of billionaire entrepreneur and DOGE enthusiast Elon Musk’s acquisition of social media platform Twitter.
CoinDesk Market Index (CMI)a broad-based market index that measures the performance of a basket of cryptocurrencies climbed 3.09% in the past 24 hours.
In traditional markets, U.S. stocks fell after rising the previous two days as investors pondered the tech industry’s struggles, which are likely to continue. Combative social media platform.
Meta platforms (FB) reported third-quarter revenue of just $285 million for its Facebook Reality Labs (FRL) division, which includes augmented and virtual reality, according to its earnings report released Wednesday. That was short of consensus analyst estimates of $406 million, and down from $452 million in the second quarter.
The technology-focused Nasdaq fell by about 2%, while S&P 500, which has a strong technology component, fell 0.6%. The Dow Jones Industrial Average (DJIA) was roughly flat. Both Microsoft and Alphabet earnings results killed what was shaping up to be a “not so bad outlook for the economy,” wrote Edward Moya, senior market analyst for forex market maker Oanda.
In goods, Brent crude, a measure of energy markets, rose to $94 a barrel, up about 0.27% from the previous day. Three weeks after OPEC announced it was cutting production, investors remain concerned about energy prices. Brent crude is up more than 15% since the start of the year. Safe-haven gold was up 0.7% at $1,664 an ounce.
Housing starts plunged nearly 11% in September, continuing a recent trend that some observers of US monetary policy hope will allow the Federal Reserve to dial back its recent monetary hawkishness. The latest decline comes as mortgage rates top 7%, hitting a two-decade high.
The University of Michigan’s monthly Consumer Sentiment Index on Friday will provide new insights into the public’s perceptions of the economy. “Bitcoin is now comfortably above the $20,000 level and now it will try to stabilize here until [Fed’s Federal Open Market Committee] meeting,” Moya wrote. “If risk appetite remains healthy, bitcoin could go higher towards the $22,500 level.” ?
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Insight
Why are crypto traders and Degens interested in World Cup themed tokens?
By Shaurya Malwa
You would probably think of a sophisticated sports betting platform if someone said they wanted to bet on matches during the FIFA World Cup in Qatar.
But crypto planners do one better. Crypto Twitter and niche altcoin Telegram groups are full of discussions about countless tokens named after participating countries, players, stadiums and even the host country itself. The tokens allow speculators to place odd bets on the prices of their favourites.
No licensing
None of these tokens are licensed, or even affiliated, with any WC participants. That hasn’t stopped players from making big wins. A token called world cup inu rose by 500% in the last week alone, while others such as CHAMPS and world cup token rose by at least 200% (before you saw the price drop in the last 24 hours).
But not everything is random. As CoinDesk’s Omkar Godbole reported on Tuesday, some fan tokens issued on blockchain-based fan reward platforms Socios and Bitci allow holders to contribute to merchandising, participate in exclusive meet-and-greet events and earn loyalty rewards.
Over the past seven days, the fan tokens of the Peruvian Football Team (FPFT), Spain National Team (SNFT), and Brazil National Team (BFT) have rallied by 29%, 17%, and 12%, respectively, according to data source CoinGecko. Fan tokens of Turkish and Argentinian teams have risen by 10% and 9%, as reported.
Availability of capital
What’s driving the latest craze? The likes of Wes Hansen, director of trading and operations at crypto fund Arca, blame it on sideline capital looking to invest in, well, just about anything with a short-term narrative.
“There’s a lot of money sitting on the sidelines waiting for any opportunity to invest, which is why short-term event trades have been the only way to generate decent returns for a few months now,” Hansen told CoinDesk in a recent chat.
He added: “When these conditions are combined with a massive month-long event like the World Cup and the love this industry has for meme tokens, there are bound to be some savvy entrepreneurs launching World Cup themed tokens (eg WCI and WILLIE).”
But aspiring investors should still exercise some caution, he noted. “These tokens just become high-speed trading vehicles that have little or no intrinsic value or functionality and will disappear as soon as the arrangement starts to wear,” Hansen said, adding that is one of the interesting reasons behind the rise of such tokens. was that they give fans a way to “interact with and support their favorite teams.”
Important events
16:15 HKT/SGT(8:15 UTC) The European Central Bank’s monetary policy decision
16:30 HKT/SGT (8:30 UTC) US durable goods orders (Sept)
16:30 HKT/SGT (8:30 UTC) US gross domestic product on an annual basis (Q3)
18:15 HKT/SGT(10:15 UTC) European Central Bank President Lagarde’s speech
07:00 HKT/SGT (23:00 UTC) Bank of Japan Monetary Policy Statement
CoinDesk TV
In case you missed it, here’s the latest episode of “First Mover” on CoinDesk TV:
Encryption in Crypto Markets, Liquidations, Tech Income and Reddit NFTs
“The Hash” team hashed out hot topics, including the rise of the crypto market, with bitcoin challenging $21,000. Additionally, Google’s third quarter earnings report revealed how the crypto winter affected ad revenue. And what is driving the popularity of Reddit NFTs?
Headings
Decline in crypto ad spending contributes to Google’s soft quarter: The company’s advertising growth in the third quarter was the lowest in nine years.
Crypto Exchange SushiSwap Approves Restructuring, Will Create 3 Firms For DAO: The development of the decentralized autonomous organization will be managed by three organisations, which will be based in Panama and the Cayman Islands.
A16z’s largest crypto fund loses 40% in the first half of 2022, the Wall Street Journal reports: Andreessen Horowitz has slowed its crypto investments, with just nine in the third quarter, compared to 26 in the fourth quarter last year.
Ethereum’s Layer 2 hash reduces costs, but risks are underestimated: Ethereum’s established rollup network cannot currently claim to “borrow” Ethereum’s security.
British police have crypto experts stationed across the country: Police have managed to seize and store hundreds of millions of pounds worth of cryptocurrency, but welcome planned laws to ease the seizure of crypto linked to crime and terrorism.
