First Mover Asia: Does Crypto’s Success Depend on the Upcoming Presidential Election?

Good morning. Here’s what’s happening:

Prices: The post-debt ceiling rally in the crypto market has ended, with bitcoin and ether declining in East Asia. What's the next narrative for crypto?

Insights: The latest Commitment of Traders reports shows a rebound in open long positions among asset managers.

Prices

CoinDesk Market Index (CMI) 1,197 −11.5 ▼ 1.0% Bitcoin (BTC) $27,746 −354.3 ▼ 1.3% Ethereum (ETH) $1,893 −21.0 ▼ 1.1% S&P 500 4,205.45 +54.2 ▲ 1.3% Gold $1,960 +15.9 ▲ 0.8% Nikkei 225 31,233.54 +317.2 ▲ 1.0% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)CoinDesk Market Index (CMI) 1,197 −11.5 ▼ 1.0% Bitcoin (BTC) $27,746 −354.3 ▼ 1.3% Ethereum (ETH) $1,893 −21.0 ▼ 1.1% S&P 500 4,205.45 +54.2 ▲ 1.3% Gold $1,960 +15.9 ▲ 0.8% Nikkei 225 31,233.54 +317.2 ▲ 1.0% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Looking for the Next Pricing Narrative

By Sam Reynolds

Good morning Asia,

Yesterday’s post-debt ceiling deal rally has come to an end.

Bitcoin is beginning East Asia’s trading day down 1.3% at $27,746 while ether is down 1.1% to $1,893.

In the last few weeks, crypto has struggled with a narrative problem. The absence of a defining narrative – is it a risk asset, or a hedge against risk? – has made for patternless price swings and confused investors.

Some might say, for instance, that bitcoin should have risen on debt ceiling uncertainty, as a U.S. default would have jolted the traditional financial system. But instead, bitcoin acted like a stock. Perhaps crypto’s narrative is no narrative at all.

Ed Moya, a Senior Market Analyst with foreign exchange market maker OANDA, posits that the upcoming U.S. election is the narrative to watch.

“We were reminded that the key to Bitcoin’s success in the US might depend on the upcoming presidential election," Moya wrote in a note Friday. "Florida governor Ron Desantis announced his intentions to run for president and appears poised to ‘protect’ Bitcoin.”

With Central Bank Digital Currencies being a new wedge issue in Florida’s political landscape, the national stage is the next logical step. Crypto has come up in elections worldwide, such as South Korea and Thailand, and President Joe Biden mentioned it when discussing debt deal negotiations.

Maybe this will be the narrative to watch?

Biggest Gainers

Asset Ticker Returns DACS Sector XRP XRP +2.3% Currency Stellar XLM +0.6% Smart Contract Platform

Biggest Losers

Asset Ticker Returns DACS Sector Gala GALA −4.0% Entertainment Polygon MATIC −3.5% Smart Contract Platform Avalanche AVAX −3.1% Smart Contract Platform

Insights

Funding Rates Remain Positive in Crypto Markets

By Glenn Williams Jr.

The Commitment of Traders report shows that asset managers have increased their open long positions in bitcoin after falling in the two prior weeks. The 24-contract increase follows a reduction of 162 contracts the week prior.

The increase halts what appeared to be more of an overall reduction in exposure than a commentary on price itself. Asset managers reduced their short positions as well over the identical time period by a total of 194 contracts.

The Commodity Futures Trading Commission (CFTC) releases COT data weekly, detailing the open interest and activity of asset managers, leveraged funds, and dealer intermediaries in bitcoin futures.

Asset Managers now comprise 48.9% of open long positions on the Chicago Mercantile Exchange, and are 97.25% long the asset as a group.

Important events.

5 p.m. HKT/SGT(9 a.m. UTC): European Commission business climate (May)

5 p.m. HKT/SGT(9 a.m. UTC): European Commission consumer confidence (May)

10 p.m. HKT/SGT(2 p.m. UTC): U.S. consumer confidence (May)

CoinDesk TV

In case you missed it, here is the most recent episode of "The Hash" on CoinDesk TV:

Lawyer Behind FTX Lawsuit Addresses Shaq Getting Served; Ether Balance on Exchanges Nears All-Time Low

"The Hash" hosts weighed in on the biggest stories shaping the crypto industry today. The number of ether (ETH) on exchanges hit a low not seen since July 2016 as staking saps up available ether. Separately, the potential sign that good-economic-news-equals-bad-news for digital asset prices narrative is beginning to shift. Plus, the lawyer representing some FTX investors, Adam Moskowitz, joined "The Hash" to discuss basketball legend Shaquille O'Neal being served in a class action lawsuit regarding FTX and its celebrity endorsements.

Headlines

Dogecoin Chart Pattern Suggests Volatility Explosion Ahead: A technical analysis indicator called Bollinger bandwidth suggests dogecoin's unusual calm could soon end with a pronounced move in either direction.

Gemini and Bankrupt Lender Genesis Ask U.S. Court to Dismiss SEC Lawsuit Targeting Earn Program:The U.S. Securities and Exchange Commission alleged the two entities had sold unregistered securities through Gemini's Earn program.

Bitcoin's Short-Term Holders Are Again Selling at Profit: Short-term holders' renewed profitability is a positive signal for near-term price action, according to on observer.

Fantom Will Pay Back 15% of Token Fees to Some Projects: The move is part of an initiative to drive demand for block space, which help add to the value proposition of FTM tokens.

Shiba Inu-Themed Floki Sees Trading Volume Surge Amid China Plans: Floki prices rallied on Sunday amid a bitcoin-led market push and bets on the token's “China narrative.”