First Mover Americas: Bitcoin Drops Below $56.5K on Risk-Off Day

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Bitcoin slid to just over $56,000 after Kamala Harris was perceived to have bettered Donald Trump in their first presidential debate. BTC recovered to over $56,500 during the European morning, but remained around 1.3% lower over 24 hours. The broader digital asset market, as measured by the CoinDesk 20 Index, dropped about 1%. The Japanese yen rallied to 140.70 per U.S. dollar, its strongest since January, appreciating beyond the early August level of 141.68 in a sign of a move away from riskier assets. The yen picked up a strong bid in late July after the Bank of Japan hiked interest rates for the first time in decades.

Vice President Kamala Harris appears to have beaten Donald Trump in the first debate between the U.S. presidential candidates on Tuesday, based on the direction of prediction bets on Polymarket, while crypto policy went unmentioned. Despite Harris' performance, the two are effectively tied in the Polymarket contract for who will win the election, with Harris' odds increasing slightly during the course of the debate. The debate did not delve into crypto, or even general technology or finance issues beyond a section on the economy. Trump, as he has been doing in recent weeks, touted the benefit of tariffs during his time on the stand, saying he would have "substantial tariffs." Harris pushed back, saying Trump left the Biden administration with a trade deficit, "one of the highest we've seen in history."

Mining was much less profitable in August than July as BTC slid and the average network hashrate rose about 2.7%, investment bank Jefferies said. Miners' average daily revenue per exahash fell by 11.8% from the previous month as a result, the report said. "September is shaping up to be another difficult month as BTC remains below $60K and the network hashrate continues to climb," analysts wrote. Jefferies notes that there were fewer days of extreme heat this summer, which meant better uptime for the largest miners. The bitcoin mined by Marathon Digital last month implies roughly 88% uptime, compared with 75% in August last year. For the 10 largest bitcoin miners the bank tracks, implied uptime last month was around 83% versus 76% a year ago and 79% in August 2022.

Chart of the Day

• The chart shows the distribution of open interest or active positions in bitcoin options listed on Deribit.
• Most open interest is concentrated in call options at higher strikes, with the $100,000 bet being the most popular.
• It shows that sentiment remains bullish despite the recent price swoon.
• Source: Amberdata

- Omkar Godbole

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