First Mover Americas: Bitcoin Inches Up After Report Shows Slowing US Jobs Growth

• Price Point: Bitcoin was rising Friday after the U.S. Labor Department reported that jobs growth slowed dramatically last month, which is seen as a boost for the prices of risky assets, because it relieves pressure on the Federal Reserve to raise interest rates aggressively.
• Market Moves: A look at how derivatives are dominating ether markets ahead of the Ethereum blockchain's Merge.
• Chart of the Day: U.S. inflation-adjusted bond yield is at its highest since mid-July.

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Price point

Bitcoin (BTC) was back trading just above $20,000 Friday, after dipping to $19,500 during the week as stock markets in Europe opened in the black after a negative week.

The largest cryptocurrency got an extra boost from a U.S. government report showing that the world's largest economy added 315,000 jobs in August – a slowdown from the 526,000 reported for July, but still above economists' estimates for a gain of 300,000. The data might prompt traders to dial back their expectations for interest-rate increases by the Federal Reserve, which is generally a positive for the prices of risky assets like cryptocurrencies.

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up 2% on the day. It has gained 6% over the last seven days. The network’s Merge, which is a major software update, is now less than two weeks away.

In the altcoin market, Lido DAO, a liquid staking tool for Ethereum, was up 8%. The platform has almost $7 billion in total value locked and a market capitalization of $1.2 billion. Polygon’s MATIC was up 7%.

In the news, Reuters reported Thursday that in late 2020, U.S. federal prosecutors asked crypto exchange Binance to submit internal documents related to its money-laundering checks and communication involving CEO Changpeng "CZ" Zhao.

Futures exchange FTX.US Derivatives said Thursday that Jill Sommers, a former commissioner at the Commodity Futures Trading Commission,has joined its board in a move to help bolster the firm’s regulatory efforts. The hire comes as FTX has previously pitched the CFTC to directly clear customers' crypto swaps.

The International Monetary Fund has called for a global platform for cross-border payments, and reiterated calls to regulate a crypto sector that officials say is unstable, inefficient and riddled with fraud.

Cryptocurrency exchange Crypto.comhas backed out of a five-year sponsorship deal worth $495 million with the UEFA Champions League, Europe's elite soccer league, according to a report in SportBusiness.

Biggest Gainers

Asset Ticker Returns DACS Sector Chainlink LINK +7.8% Computing Polygon MATIC +5.6% Smart Contract Platform Polkadot DOT +5.3% Smart Contract Platform

Biggest Losers

Asset Ticker Returns DACS Sector Terra LUNA −8.9% Smart Contract Platform

Market Moves

Ether Derivatives Markets Continue to Heat Up Ahead of the Merge

As the much anticipated Merge gets closer, data from Kaiko, a provider of crypto data, shows that ether derivative markets are heating up.

New money is returning to the perpetual futures markets more ferociously than ever, specifically for ETH, with open interest recently breaking all-time highs and an increase in volume in ETH perpetual futures as investors on either side of the debate look to position themselves ahead of the Merge.

The share of perpetual futures volume between bitcoin and ether had ETH commanding 45% of volume at the start of August and going up to 57% at the end of August as this month's Merge approaches, according to Kaiko.

Spot vs. perpetual futures volume

An increasing number of ETH perpetual futures trades are being made compared with spot market trades and are beginning to have an outsized influence on sentiment surrounding ether, according to Kaiko.

According to Kaiko's report, volume typically correlates to price movements, and if futures markets are seeing a greater increase in volume than spot markets, the correlation might signal that the futures market is leading price discovery.

"Back when markets were at all-time highs last November, perps only did 4x the volumes of spot markets," the report stated.

"Now at 7x the volumes and with open interest at all-time highs, it seems investors and institutions are turning to perpetual futures to place their bets on ETH, which as we’ve seen over the last month have been predominantly biased to the short side."

Based on the ETH perpetual future daily volume over the last year, there is an increase from $19 billion to over $33 billion. Daily spot volumes rose to $4.8 billion from $3.7 billion in just over a year.

Chart of the Day

U.S. Inflation-Adjusted Bond Yield at Highest Since Mid-July

By Omkar Godbole

• The inflation-adjusted 10-year U.S. bond yield has jumped to 0.67%, which is its highest level since July 11, according to data sourced from charting platform TradingView.
• Like gold, bitcoin tends to move in the opposite direction of the real yield.
• Bitcoin's 90-day inverse correlation with the real yield reached a record -0.95 in July and remained elevated at press time.

Latest Headlines

• Thailand Toughens Rules for Crypto Ads: The new rules, which took effect this week, require crypto operators to display clear risk warnings on ads and prohibit the inclusion of false or exaggerated information about companies.
• Bitcoin, Ether Consolidate as Traders Eye U.S. Jobs Report to Gauge Next Fed Rate Hike: Instead of weighing the broader path for interest rates or the terminal rate, markets are trading the odds on the Fed's Sept. 21 decision, either 50 basis points or 75 bps, one trading firm said.