Bitcoin holding pattern continues as lawmakers progress in debt limit negotiations
Good morning. Here’s what’s happening:
Prices: Bitcoin remained around $26.5K for most of Thursday despite strong jobs and productivity data.
Insights: Nvidia GPUs were initially useful for AI because they can handle large amounts of data, but now they are key to the company’s growth because they are well-suited for artificial intelligence (AI) technology.
Prices
Bitcoin’s Debt Limit Holding Pattern
The following table provides the CoinDesk Market Index (CMI) and the prices for Bitcoin, Ethereum, S&P 500, Gold, and Nikkei 225 as of 7 a.m. ET (11 a.m. UTC).
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A table with various financial data is displayed. The first row shows the CoinDesk Market Index (CMI), followed by its value and percentage increase/decrease. The subsequent rows show Bitcoin (BTC), Ethereum (ETH), S&P 500, Gold, and Nikkei 225, with each row displaying the current value and percentage increase/decrease. The table is followed by a paragraph discussing the ongoing negotiations about the U.S. debt ceiling and how it is affecting crypto investors.
The article then talks about the current state of Bitcoin and Ether, which are trading within a tight range. Other major cryptocurrencies are also trading mixed, with the CoinDesk Market Index up by 0.4%. The article quotes Dave Weisberger, the CEO and co-founder of CoinRoutes, who believes that the debt ceiling crisis is keeping the crypto markets in a holding pattern.
The article then discusses the release of positive weekly unemployment figures and GDP data, which failed to cause any significant movement in the equity markets. The article concludes with Weisberger’s analysis of the three possible paths out of the debt ceiling crisis and how they could affect the crypto markets.
Weisberger observed that trading volumes have decreased recently, however, he noted that data suggests that “we are in an accumulation phase, where the buyers are relatively passive.”
He wrote that Tether-denominated trading for BTC is stronger and the liquidity has grown relative to USD-denominated pairs, indicating that both volumes and liquidity are higher overseas.
Biggest Gainers
| Asset | Ticker | Returns | DACS Sector |
|---|---|---|---|
| Decentraland | MANA | +2.1% | Entertainment |
| Polygon | MATIC | +2.0% | Smart Contract Platform |
| Gala | GALA | +1.4% | Entertainment |
Biggest Losers
| Asset | Ticker | Returns | DACS Sector |
|---|---|---|---|
| Cardano | ADA | −1.6% | Smart Contract Platform |
| Chainlink | LINK | −0.8% | Computing |
| Polkadot | DOT | −0.3% | Smart Contract Platform |
Insights
Nvidia Has Already Forgotten About Mining
Nvidia’s stock price has surged after solid, though not fantastic, earnings. The reason for the growth is artificial intelligence (AI) because Nvidia’s graphics processing units (GPUs) are useful for AI due to their ability to process large amounts of data in parallel, making them much faster than CPUs for the complex computations needed in machine and deep learning.
GPUs were also useful for proof-of-stake mining, and at one time, the price of ether and the adoption of the Ethereum blockchain dictated the price of GPUs. However, once Ethereum switched to proof-of-stake mining, GPU sales collapsed.
Nvidia was always a bit hesitant to disclose the amount of crypto mining that contributed to the company’s revenue. In November 2018, Nvidia CEO Jensen Huang complained that a “crypto hangover” had caused Nvidia to lose $23 billion in market value. Then, in May 2022, it paid a $5.5 million fine to the Securities and Exchange Commission (SEC) to settle the affair.
Market research data from firms like Jon Peddie Research (JPR) shows that overall GPU shipments decreased by 14.9% from the previous quarter in August 2022, as the Merge drew closer. For the fourth quarter of 2022, which JPR says is usually flat, GPU shipments were down 15%. Year-over-year shipments decreased by 38%.
At the same time, Nvidia’s revenue from Crypto Mining Chips, which were designed to preserve the supply of GPUs for gamers, began to decline rapidly. According to JPR, the compound annual growth rate for GPUs is expected to be 0.19% from 2022 to 2026, which is not the kind of growth that drives stocks up by double digits.
In Nvidia’s latest earnings report, its gaming vertical (which includes retail GPU sales) has started to recover, but this is old news for Nvidia now. Its focus is on AI, and it doesn’t have to keep it a secret from investors.
Important events.
8:30 p.m. HKT/SGT(12:30 UTC) United States Durable Goods Orders (April)
8:30 p.m. HKT/SGT(12:30 UTC) United States Nondefense Capital Orders ex Aircraft
8:30 p.m. HKT/SGT(12:30 UTC) United States Personal Spending (April)
CoinDesk TV
In case you missed it, here is the most recent episode of “First Mover” on CoinDesk TV :
Do Kwon Will Remain in Detention; Ripple President Addresses SEC Lawsuit
Terraform Labs co-founder Do Kwon will remain in detention while he faces charges of falsifying official documents, according to a court statement. Separately, bitcoin (BTC) fell toward $26,000 as Treasury Secretary Janet Yellen issued a new warning about the debt ceiling deadline. Nauman Sheikh from Wave Digital Assets shared his crypto markets analysis. Plus, Ripple President Monica Long discussed the blockchain company’s ongoing legal battle against the U.S. Securities and Exchange Commission (SEC). And, Canvas CEO David Lavecky shared an update on central bank digital currency (CBDC) testing in Australia.
Headlines
Blend Seizes 82% of NFT Lending Market Share, Per DappRadar : Since NFT lending marketplace Blend launched on May 1, it has amassed 169,900 ETH, or about $308 million in volume.
Ex-Sushi CTO Led NFT Lending Platform Astaria Rolls Out to Public : After months in beta, the NFT lending platform has witnessed the highs and lows of its competitors in the space and aims to boost NFT market liquidity while protecting the interests of lenders and borrowers.
Binance Launching NFT Loan Feature : The tool, launching on Friday, will initially support Ethereum loans and NFTs from Bored Ape Yacht Club, Mutant Ape Yacht Club, Azuki and Doodles collections.
Sam Altman’s Crypto Project Worldcoin Raises $115M, Led By Blockchain Capital : Other investors in the Series C round included a16z, Bain Capital Crypto and Distributed Global.
Bitcoin’s Hot Ordinals Economy is Getting a Dollar-Backed Stablecoin : Bitcoin’s quickly maturing ordinals scene has come a long way since January.
Edited by James Rubin.
