First Mover Americas: Bitcoin Traders Await Fed, Cosmos Is Heating Up

• Price Point: Bitcoin slips to about $19,200 on fears of higher interest rates.
• Market Moves: Cosmos' ATOM token gains on the hope of more uses for the Cosmos blockchain – bucking the overall bearish mood that appears to have taken hold in crypto markets following last week's Merge on the Ethereum blockchain. Omkar Godbole reports.
• Chart of the Day: Ether's supply growth has slowed dramatically since the Ethereum blockchain's Merge last week.

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 lower at around $19,200, as traders in traditional markets prepared for a big interest-rate hike by the Federal Reserve.

The U.S. central bank’s two-day, closed-door meeting is set to start Tuesday and culminate Wednesday with a statement at 2 p.m. ET (18:00 UTC). For much of this year, bitcoin, the largest cryptocurrency, has traded in sync with U.S. stocks, which have come under pressure from the Fed’s efforts to tighten monetary policy in the face of soaring consumer prices.

In traditional markets, European equity indexes fell and U.S. stock futures pointed to a drop when New York exchanges open.

"Given the aggressive stance that the Fed has taken in terms of raising interest rates, I think that we are probably in the middle innings of a recession,” Adam Sze, head of digital assets at Global X ETFs, told CoinDesk TV on Monday.

Ether (ETH), the second-largest cryptocurrency, was changing hands at about $1,350, still well off last month’s high above $2,000, despite all indications that last week’s historic Merge on the Ethereum blockchain went smoothly. Citigroup analysts estimate that the change will reduce ETH issuance by 90%.

In the news, the cryptocurrency market maker Wintermute was hacked for $160 million, and the failed crypto lender Voyager Digital asked a bankruptcy court in New York for an order to unwind a loan it made to trading firm Alameda Research.

CoinDesk Market Index

Biggest Gainers

Asset Ticker Returns DACS Sector Perpetual Protocol PERP +6.17% DeFi Algorand ALGO +6.03% Smart Contract Platform Compound COMP +4.86% DeFi

Biggest Losers

Asset Ticker Returns DACS Sector Rarible RARI -12.66% Culture & Entertainment Terra Luna Classic LUNA -8.68% Smart Contract Platform Optimism OP -8.06% Smart Contract Platform

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk Market Index (CMI) is a broad-based index designed to measure the market capitalization weighted performance of the digital asset market subject to minimum trading and exchange eligibility requirements.

Market Moves

Cosmos' ATOM Gains, Bucks Post-Merge Lull on Outlook for New Uses, Better Security

By Omkar Godbole

Investors starved for bullish catalysts seem to be parking their money in ATOM, the native coin of Cosmos Hub, the blockchain acting as an intermediary between all independent blockchains created within the Cosmos network.

Observers say they are doing so in expectation that a conference next Monday will bring an announcement of additional uses for the token and better security for the network.

ATOM has risen 10% to about $15.30 since Thursday, bucking the broader market weakness caused by the "sell-the-fact" response to the successful implementation of Ethereum's software upgrade called the Merge, according to CoinDesk data. The token's ether- and bitcoin-denominated prices have increased by 32% and 14%, respectively.

"The market is looking for assets with a catalyst right now and ATOM happens to have one, which is why it is outperforming," said Katie Talati, director of research at Arca, a digital-asset management firm. "Cosmos is holding its annual conference next week, where it is expected to release a tokenomics white paper detailing more use cases for ATOM.

"Some potential announcements could relate to the release of interchain security, a feature that allows projects to rely on the Cosmos base chain for their security, which might increase the usage and staking of ATOM," Talati said.

Read the full story here.

Chart of The Day

Ether's Supply Growth Has Slowed Drastically Since Merge

By Omkar Godbole

• Ether's supply has increased by 3,688 ETH since the Merge, which took effect on Thursday, according to data source Ultra Sound Money.
• The transition to the proof-of-stake consensus mechanism of verifying transactions has reduced the issuance by 95%.
• Had Ethereum continued to use a proof-of-work consensus mechanism of verifying transactions, the supply would have increased by more than 65,000 ETH.
• The reduced supply might help ether absorb macroeconomic shocks better than bitcoin.

Latest Headlines

• Cosmos' ATOM Gains, Bucks Post-Merge Lull on Outlook for New Uses, Better Security: Cosmos is likely to announce the interchain security feature next week, opening doors for the token to capture value from the entire network.
• Citi Says Ether Remains Relatively Stable Despite Significance of the Merge: ETH token issuance is estimated to drop 90% to around 600,000 a year, the bank said.
• Crypto Market Maker Wintermute Hacked for $160M, OTC Services Unaffected:Wintermute's lending and OTC operations have not been affected despite the hack.