First Mover Asia: Bitcoin Is Off on US Holiday and Could Fall Further

Good morning. Here’s what’s happening:

Market moves: Bitcoin dropped below $42,000; ether and most other, major altcoins also fell.

Editor's Note: Because of the U.S. Martin Luther King holiday, First Mover Asia is substituting a recent column on DeFi by CoinDesk Chief Content Officer Michael Casey for the usual Technician's Take.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

Prices

Bitcoin (BTC): $42,140 -2.5%

Ether (ETH): $3,209 -4.5%

Top gainers

Asset Ticker Returns Sector Cardano ADA +9.4% Smart Contract Platform Litecoin LTC +3.5% Currency

Top losers

Asset Ticker Returns Sector Cosmos ATOM −7.9% Smart Contract Platform Chainlink LINK −7.2% Computing Polkadot DOT −7.1% Smart Contract Platform

Markets

S&P 500: 4,662 +.08%

DJIA: 35,911 -0.5%

Nasdaq: 14,893 +0.5%

Gold: $1,817 -0.2%

Market moves

Crypto prices sagged on Monday, a national U.S. holiday honoring civil rights activist Martin Luther King Jr., and showed few signs of reversing any time soon.

Bitcoin, the largest cryptocurrency by market capitalization, fell below $42,000, although at the time of publication it was above that mark. Ether dropped under $3,200, while most of the other leading altcoins stayed in the red.

Equity markets were shuttered on the holiday, offering a respite from the recent drumbeat of bad news that seems to be increasingly intertwined with crypto pricing. The Wall Street Journal reported that about 220 U.S. publicly traded companies with market capitalizations over $10 billion have fallen 20% from their peaks and that the S&P 500 and Nasdaq had declined 2.2% and 4.8%, respectively.

Meanwhile, a New York Times story highlighted the inability of the U.S. Centers for Disease Control and Prevention to keep pace with data about the Omicron variant of the coronavirus, which has been hammering the global economy.

Pankaj Balani, CEO of the crypto derivatives exchange Delta Exchange, said that bitcoin is vulnerable to falling further because buying demand is absent. "We are not seeing any bottom fishing at these levels, and the interest to own bitcoin risk around $40,000 remains low," Balani told CoinDesk's Omkar Godbole in a WhatsApp chat. "We could retest $40,000 and should that break, we can see a fresh round of selling come through."

Column

Off the Charts: DeFi Rebound:Total value locked is rising despite the retreat in other crypto prices. (By Michael Casey)

Amid the weakness in bitcoin and other crypto assets during the latter part of 2021 and early 2022, there’s been an anomalous counter-performance by the decentralized finance (DeFi) sector. The last few weeks have seen a modest rebound in total value locked, a measure of how much digital asset value has been collateralized for loans in the DeFi system. CoinDesk’s Shuai Hao whipped me up this chart, based on data from DeFi Pulse, which shows TVL, as expressed in ether, versus the value of the CoinDesk Indices' DeFi (DFX) index.

It’s too early to say whether the rebound in TVL will meaningfully reverse the declines in DeFi commitments seen since last spring. However, it’s notable the value has increased despite close to no rebound in dollar prices. We will have to see whether the sector can return to the unbridled enthusiasm of a year ago, or whether the zeitgeist has been lost to NFTs.

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Important events

11 a.m. HKT/SGT (3 a.m. UTC): Bank of Japan announces its decision on interest rates and issues a monetary policy statement.

11 a.m. HKT/SGT (3 a.m. UTC): Bank of Japan outlook report (Q4)

12:30 p.m. HKT/SGT (4:30 UTC): Industrial production (Nov. MoM/YoY)

3:30 p.m. Switzerland producer and import prices (MoM/YoY Dec.)

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

(Editor's note: Because of the U.S. Martin Luther King Jr. holiday, First Mover Asia is substituting the following episode of CoinDesk TV's The Hash for the usual First Mover program.)

Dogecoin Spikes as Tesla Accepts Payments, Should the Fed Be Banned From Issuing a US Digital Dollar?

"The Hash" tackled the following hot topics in this episode from last week: Dogecoin soaring as Tesla accepted payments for merchandise; "Blockchain City" CityDAO being hacked via Discord; El Salvador journalists and activists getting hacked via Pegasus spyware; and why U.S. Representative Tom Emmer (R-Minn.) wants to prohibit the Federal Reserve from issuing a digital dollar.

Latest headlines

Binance to Set Up Crypto Exchange With Thailand's Gulf Energy Development:Gulf Energy Development says it foresees "rapid growth in digital infrastructure" in the country.

Indian Prime Minister Calls for Global Cooperation on Cryptocurrency: Narendra Modi likened crypto to supply-chain disruptions, inflation and climate change, saying they can't be tackled by nations in isolation.

Pakistan’s Crime Agency to Ask Telecom Authority to Block Crypto Websites: Report: The State Bank of Pakistan has already submitted recommendations for regulating cryptocurrencies.

Indian TikTok Rival Chingari Raises $15M Round Led by Republic Capital: Report: Following a ban on TikTok in India, Chingari grew rapidly and now has over 35 million active users.

Crypto.com Capital Hires Jon Russell as GP, Hints at Expanding Fund Size:Russell spent 10 years as a tech journalist, including stints at The Ken and Tech Crunch.

Hulu Targets ‘Streamers of Tomorrow’ as It Seeks Candidates With Metaverse, NFT Backgrounds: The streaming platform’s Jan. 14 job listing signaled an interest in crypto tech.

Crypto Job Postings Jumped 395% in 2021: LinkedIn: The top cities for listings were San Francisco, Austin, New York City, Miami and Denver.

Longer reads

Off the Charts: DeFi Rebound: Total value locked is rising despite the retreat in other crypto prices.

Today's crypto explainer: What Is Proof-of-Stake?

Other voices: Bitcoin crashes the midterms(Politico)

Said and heard

“More and more people of color, women, single moms are looking into Bitcoin,” the largest cryptocurrency, Rhodes said. “I never met anyone who was against it.” (California congressional candidate Aarika Rhodes to Politico) ... "But spying on opposition journalists is several orders of magnitude more reprehensible to me than any other claims made about Bukele so far. I am admittedly biased, but the suppression of information is a fundamental attack on the good and fair functioning of any society." (CoinDesk columnist David Z. Morris) ... "I do not know who needs to hear this, but owning an NFT is not the same as owning a project’s copyright or intellectual property." (CoinDesk columnist Daniel Kuhn) ... “There’s been a lot of disruption and divergence between winners and losers.” (Ilya Feygin, a managing director at WallachBeth Capital, on equity prices this year to The Wall Street Journal)