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Arbitrum Sees Transactions Soar As Traders Anticipate Potential ‘ARBI’ Airdrop; Ether, Dogecoin fall after FOMC rate hike

Good morning Here’s what happens:

Prices: Ether and Dogecoin fell after the Fed’s latest rate hike; Bitcoin fell more moderately.

Insights: Arbitrum’s on-chain metrics, including weekly transactions, weekly active users, and totals locked, have skyrocketed.

Watch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis. And sign up for First Mover, our daily newsletter that puts the latest moves in the crypto markets into context.

Prices

CoinDesk Market Index (CMI)

1,002.35 −24.7 2.4

Bitcoin (BTC)

$20,142 −342.0 1.7

Ethereum (ETH)

$1,519 −61.6 3.9

S&P 500 daily close

3,759.69 −96.4 2.5

gold

$1,635 −10.3 0.6

Treasury yield 10 years

4.06 0.0

BTC/ETH prices per CoinDesk indices; Gold is the COMEX spot price. Prices from approximately 4:00 p.m. ET

Crypto prices fall after rate hike

By James Rubin

The US Federal Reserve hiked interest rates by a widely expected 75 basis points for the fourth straight month.

Ether, Dogecoin, and other major altcoins didn’t like it, plunging deep into the red on Wednesday afternoon.

Bitcoin fell more moderately.

ETH, the second-largest cryptocurrency by market cap, recently traded a few fractions above $1,500, down more than 4% in the last 24 hours, but right on the same level as last week. DOGE recently declined about 10%, giving back some of its recent, dramatic gains. The popular meme token was still trading above 12 cents, near its highest level in more than six months.

Meanwhile, BTC continued to hover above its recent $20,000 support line, down 1.8% from Tuesday at the same time despite rising investor interest. CoinDesk analyst Glenn Williams noted on Wednesday that the crypto winter has given bullish investors an opportunity to accumulate Bitcoin on a cheap cost basis. “Larger crypto investors continue to explore this opportunity,” Williams wrote, adding, “Whether or not money managers choose the right price point to go long will become clear over the next 12 months, but they appear to be ahead of the curve.”

The story goes on

The CoinDesk Market Index was down about 2.5%.

Meanwhile, major stock markets tumbled following the Fed’s announcement, with the tech-heavy Nasdaq down 3.3% and the S&P 500 and Dow Jones Industrial Average (DJIA) down 2.5% and 1.5%, respectively. Investors remain concerned about the central bank’s strategy to combat rising prices and the prospect of a deep recession. Safe haven gold fell 0.7%.

In an interview with CoinDesk TV’s First Mover program, Nischal Shetty, co-founder of Indian crypto exchange WazirX, said he “wouldn’t be surprised if we see downward pressure on prices,” although he was optimistic about Bitcoin’s recent resilience . “Bitcoin appears to be holding strong at $20,000; that’s an important point,” he said.

insights

According to on-chain data, Arbitrum is more than hype

By Shaurya Malwa

Crypto traders and investors are increasingly viewing the Arbitrum ecosystem as a likely place for generating returns along the lines of the 100+ multiples sometimes seen in previous bull market cycles.

The Ethereum-based scaling product, which allows traders to transact on the blockchain network for less than pennies in fees and transaction times of mere seconds, is among a spate of blockchain networks launched over the past year – each promising to be faster and cheaper than its predecessor.

On-chain data shows that Arbitrum isn’t just hype. Since August, weekly transactions on Arbitrum have skyrocketed by over 550%, with the Arbitrum network now dominating more than 62% of weekly transactions on Ethereum.

Total Value (TVL) on Arbitrum has increased by over $400 million over the past few months, data from DeFiLlama shows, with the ecosystem now holding over $1 billion. The popular trading tool GMX accounts for 43% of this TVL.

Weekly active users on Arbitrum have also increased sharply over the past two weeks, analysts at research firm Delphi Digital said in a report this week.

“Since October 10, weekly active users have increased by 125% to a new all-time high of 282,000, even surpassing the numbers recorded during the Arbitrum Odyssey event,” they said, referring to a week-long initiative that held in July Users can explore the Arbitrum ecosystem with exclusive non-fungible tokens (NFT) as rewards.

Delphi analysts added that much of the ongoing activity is also “likely to come from speculators trying to ramp up their on-chain activity in hopes of a bigger airdrop.”

“Users could also take advantage of the various yield farming opportunities that protocols on Arbitrum offer,” they added.

The Arbitrum developers had not announced any tokens or even plans for tokens as of Wednesday. But rumors and the expectation of a potential developer are sometimes all you need to excite Degens in cryptoland.

Biggest Winners

There are no winners in CoinDesk 20 today.

Biggest Loser

Important events

8:30am HKT/SGT (00:30 UTC) Australia Trade Balance (Month/September)

20:00 HKT/SGT (12:00 UTC) Bank of England monetary policy report

22:00 HKT/SGT (14:00 UTC) United States ISM Services PMI (Oct)

CoinDesk TV

In case you missed it, here’s the latest episode of “First Mover” on CoinDesk TV:

Deribit Exec on $28M Hot Wallet Hack; Bitcoin stable ahead of Fed rate decision

Deribit, the world’s largest cryptocurrency options exchange, has suspended payouts after losing $28 million in a hot wallet hack. Luuk Strijers, Deribit’s Chief Commercial Officer, joined First Mover to discuss what happened and how customers have been affected. And how will crypto markets react as investors await a Federal Reserve rate decision? Nischal Shetty, co-founder of WazirX, joined the discussion.

headlines

Dogecoin above Most’s 200-day moving average since June 2021: While the meme coin has entered what technicians see as bullish territory, following the rally can be risky, according to a chart analyst.

Crypto Investor a16z to Join Ooki DAO Defense Against CFTC: Andreessen Horowitz is just the latest entity to argue that the commodity regulator needs to take its case against individual members of the DAO, not the DAO itself.

Digital Currency Group Promotes Mark Murphy to President and Cuts Nearly 13% of Staff, Bloomberg reports: About 10 employees left the Connecticut-based company, bringing the workforce to 66. DCG is the parent company of CoinDesk, as well as digital wealth manager Grayscale Investments and crypto brokerage Genesis Trading.

What to expect from Ethereum’s next major upgrade: “Shanghai” will allow ETH to be withdrawn, but a long-awaited path to lower gas fees may be missing from the update.

Aave Community Members Vote for Deployment on zkSync v2 Testnet: The decision will allow developers to assess whether to fully deploy their decentralized exchanges on the Layer 2 scaling platform that accelerates Ethereum transactions.

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