First Mover Asia: Bitcoin Could Experience Price Turbulence as $30K Is Tested

Good morning. Here’s what’s happening:

Prices: As Asian trading begins, bitcoin maintains above $30,000 despite a minor drop, while Ether trades lower

Insights: For investors and others touching the technology world, AI is the latest shiny object. Is their fascination premature?

Prices

CoinDesk Market Index (CMI) 1,230 −9.8 ▼ 0.8% Bitcoin (BTC) $30,328 −12.4 ▼ 0.0% Ethereum (ETH) $1,860 −24.0 ▼ 1.3% S&P 500 4,328.82 −19.5 ▼ 0.4% Gold $1,933 +13.4 ▲ 0.7% Nikkei 225 32,698.81 −82.7 ▼ 0.3% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)CoinDesk Market Index (CMI) 1,230 −9.8 ▼ 0.8% Bitcoin (BTC) $30,328 −12.4 ▼ 0.0% Ethereum (ETH) $1,860 −24.0 ▼ 1.3% S&P 500 4,328.82 −19.5 ▼ 0.4% Gold $1,933 +13.4 ▲ 0.7% Nikkei 225 32,698.81 −82.7 ▼ 0.3% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Eyes on the Expiry

As Asia opens for trading, bitcoin has still held past the $30K mark at $30,323, flat over the past 24 hours, according to CoinDesk data. Ether, meanwhile, is trading at $1,860, down 1.3%.

Shaun Fernando, Chief Risk Officer at Deribit, told CoinDesk in a note that bitcoin’s ‘max pain’ point, or a part of the market when option holders will experience the most financial loss, while option sellers can be the ones who profit the most, is currently at $26K, which should alleviate some of the downward pricing pressure after the coming options expiry.

“With an impressive open interest of over $350 million at the 30k strike, the approaching quarterly expiration promises an exhilarating conclusion, carrying the potential for price turbulence amidst diverse gamma hedging strategies,” Fernando said.

Fernando noted that ether has witnessed substantial institutional selling activity, but its implied volatility remains lower than bitcoin.

Until then, all eyes are on Friday when the quarterly options expire.

Biggest Gainers

Asset Ticker Returns DACS Sector Stellar XLM +0.4% Smart Contract Platform

Biggest Losers

Asset Ticker Returns DACS Sector Gala GALA −4.7% Entertainment Solana SOL −4.4% Smart Contract Platform Loopring LRC −4.4% Smart Contract Platform

Insights

AI's Hype Doesn't Reflect the Reality

Critics of the digital assets industry say it’s buzzword- laden and unsustainable, always chasing the next new trend without much thought to its sustainability.

And for the most part, they are right.

Over the weekend, 8btc, one of China’s first crypto publications, announced it was abandoning the field entirely and pivoting to primarily covering AI and the metaverse.

Venture Capitalists, seemingly bored of blockchain and crypto, have found a new interest in AI. PitchBook data shows that venture capital funding for crypto is down 80% in the first quarter of 2023, from $12.3 billion to $2.4 billion. PitchBook’s data also shows that AI startups raised $1.6 billion this quarter, and another $10 billion in deals have been announced but have yet to close.

For all the hype the AI bulls have for the technology, after putting it through its paces, AI is still somewhere between the peak of inflated expectations and trough of disillusionment on a hype cycle. Its slow, expensive, and 15-20% of what comes out of ChatGPT’s artificial mouth is a hallucination.

Certainly, there are some similarities between the hype cycles of AI and enterprise blockchain.

Enterprise blockchain was supposed to unlock billions in value through efficiencies, but those that tried to implement it weren’t all that impressed, so much so that IBM dismantled most of its blockchain team because of low revenue, and Microsoft phased out its Azure-based blockchain cloud services.

Even at the height of blockchain mania, the prelude to the Covid bull market, there wasn’t the same fervor as there is with AI. One would think that given the disappointment of the enterprise blockchain bubble bursting, stakeholders would have learned their lesson about enthusiastically embracing new technology.

But here we are.

Important events.

European Central Bank Forum for Central Banking

Point Zero Forum

Robinhood ends support for Polygon, Cardano and Solana

CoinDesk TV

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

BitGo CEO Addresses Terminating Prime Trust Acquisition; Bitcoin Starts Week Above $30K

BitGo CEO Mike Belshe joined "First Mover" to address why the custodian terminated its acquisition of rival Prime Trust after earlier this month reaching a preliminary agreement to acquire the firm for an undisclosed amount. Meanwhile, bitcoin (BTC) is off to a strong start this week, with the world’s largest digital asset holding above the $30,000 mark. Arca head of research Katie Talati shared her crypto markets analysis. And Johns Hopkins University professor of applied economics and Independent Institute senior fellow Steve Hanke shared his thoughts on the current macroeconomic factors impacting crypto, after Russia briefly faced the threat of an armed insurrection over the weekend.

Headlines

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FTX Bankruptcy Team Says the Exchange Owed Customers $8.7B: Commingling and misuse of customer funds occurred from the start at FTX, says current CEO John J. Ray III, and senior executives knew of the shortfall as early as August 2022.

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SEC Sought Freeze Order Despite ‘No Evidence’ That Binance Was Moving U.S. Customer Funds: The SEC’s “pre-crime” litigation strategy seemed to annoy Judge Amy Jackson.