First Mover Asia: Bitcoin Seesaws Above $24.1K Following Mixed FOMC Minutes

Good morning. Here’s what’s happening:

Prices: Bitcoin dropped near $23,600 following the release of less than encouraging minutes from the FOMC January meeting but rebounded along with other major cryptos later in the day.

Insights: Hundreds of fake ChatGPT tokens are luring crypto investors. The issuers of these tokens are looking to take advantage of the craze surrounding the this technology innovation.

Prices

CoinDesk Market Index (CMI) 1,121 −7.1 ▼ 0.6% Bitcoin (BTC) $24,164 −233.3 ▼ 1.0% Ethereum (ETH) $1,641 −17.5 ▼ 1.1% S&P 500 3,991.05 −6.3 ▼ 0.2% Gold $1,834 +1.3 ▲ 0.1% Nikkei 225 27,104.32 −368.8 ▼ 1.3% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Bitcoin Sinks Than Rallies Above $24.1K After FOMC Minutes

Stirred but not shaken, crypto markets dropped a little on Thursday, rose some but remained in the red after the U.S. central bank's Federal Open Market Committee (FOMC) released minutes that were short of encouraging.

Bitcoin was recently trading at $24,164, down 1% over the last 24 hours. The largest cryptocurrency by market capitalization dropped near $23,600 in the immediate aftermath of the FOMC report, which noted slowing growth – a boon for investors hoping for more dovish Federal Reserve monetary policy – but also data suggesting that inflation and the prospects of a harsh recession remained real, pleasing monetary hawks.

"Everyone's wary of what's to come over the course of this year," Jake Boyle, chief commercial officer at crypto brokerage Caleb and Brown, said on CoinDesk TV. "At this point it looks like the stance has become more conservative on the basis that 25 basis points is less impactful than 50, but it's critical that we all remember that it is still going up, which means that the solution is clearly not there."

Boyle added: "Paired with the regulatory uncertainty that the crypto space is seeming to have these days, it would be fair for us to make the assumption that there is going to be further volatility and unexpected announcements over the course of this year."

Ether was recently changing hands at $1,641, off 1.1% from Tuesday, same time. Yet, CoinDesk analyst Glenn Williams noted that BTC and ETH were diverging on a different front, with investors sending bitcoin to exchanges and removing ether from them. The moves have signaled bearish sentiment for bitcoin and bullishness for ether, a departure from their usual correlation. Separately, on Tuesday layer 2 scaling system Arbitrum surpassed Ethereum in daily transactions, increasing Arbitrum’s dominance as the leading layer 2 rollup.

Other major cryptos were mixed with some ticking up a little but others slightly in the green, although APT, the token of layer 1 platform Aptos, recently climbed more than 6%.

Stocks fell amid the same inflationary and recessionary fears that have bedeviled markets for the past few days with the S&P 500, which has a tech-heavy component, dropping 0.2%, its fourth consecutive daily decline, and the technology-focused Nasdaq and Dow Jones Industrial Average (DJIA) also edging down slightly.

Crypto news ranged from upbeat to reminders of cryptos' nearly 15 months of sturm und drang. Investment banking giant JPMorgan said in a research report that crypto exchange Coinbase is well positioned to deliver notable year-on-year improvement in EBITDA." But a legal filing by the U.S. Federal Trade Commission said it has started an investigation into bankrupt crypto lender Voyager Digital and its executives for deceptive marketing of cryptocurrency.

In an email to CoinDesk, Anthony Georgiades, co-founder of Pastel Network, a decentralized blockchain for non-fungible tokens, cryptocurrencies and Web3 technology, wrote optimistically that "the slightly better than forecasted earnings reported by Coinbase might suggest that we have moved into the final innings of a crypto winter."

"Clearly, there has been more interest in the digital asset market in recent months, as evidenced by a rally that took a lot of observers by surprise. Part of this has to do with market psychology – everyone was so incredibly bearish that the obvious counter-trade was to be bullish. Coinbase has also been able to increase its overall market share on the back of the fallout of large crypto marketplaces like FTX."

Georgiades was particularly sanguine about cryptos' prospects in Asia: "There is a lot of speculation that buyers in Asia are starting to scale back into crypto in increasing amounts. As a result, the strength in the digital asset market may very well continue for the foreseeable future. Even if the Fed remains hawkish for months to come, what’s happening in other parts of the world in monetary easing might be enough to offset what’s happening in the United States."

But he added that "there could be deep pullbacks in bitcoin and crypto to come," even if "the fodder for an enduring rally seems to be there.”

Insights

Hundreds of Fake ChatGPT Tokens Are Luring Crypto Investors; Majority Issued on BNB Chain

This story first appeared Feb. 21 on CoinDesk.

Nefarious market participants are attempting to cash in on the ongoing ChatGPT craze in technology circles by issuing fake tokens branded after the artificial intelligence chatbot despite having no official association with the tool.

Hundreds of such tokens have been issued in the past few weeks. Of this, 132 different tokens have been issued on BNB Chain, 25 tokens on Ethereum and 10 separate tokens on other blockchains such as Solana, Arbitrum, OKChain and Cronos.

These fake issuances follow software giant Microsoft’s move to integrate OpenAI’s chatbots for search services on Microsoft’s internet browsers.

While OpenAI is the creator of ChatGPT, Microsoft’s own chatbot is a bespoke tool and is said to be an improvement over the publicly accessible ChatGPT.

Scammers are not wasting a chance to monetize on the hype, however. Several “BingChatGPT” have been issued, seeded with liquidity and are seeing thousands of dollars in trading volumes – despite red flags.

“PeckShield has detected dozens of newly created #BingChatGPT tokens, of which 3 appear to be #honeypots & 2 have high sell tax,” blockchain security firm PeckShield said in a tweet Monday.

“2 of them have already dropped over -99%. Deployer 0xb583 has already created dozens of tokens with a pump & dump scheme,” PeckShield added, referring to the wallet address of the nefarious issuer of these tokens.

In cryptocurrency, honeypots are smart contracts that pretend to leak their funds to an arbitrary user, provided that the user sends additional funds to it.

On the other hand, sales tax refers to the intentional amount of money taken by an illicit smart contract when a related token is sold – usually amounts higher than 50%, meaning a user selling $100 worth of a token receives only $50 worth, with the remaining “taxed” amount going to the developer of that smart contact.

At writing time on Tuesday, there are over 170 ChatGPT-branded tokens issued on decentralized exchanges such as Uniswap and PancakeSwap, data from DEXTools shows.

Read More: Here’s Why Artificial Intelligence Focused Cryptocurrencies Are Vastly Outperforming Bitcoin

The most popular one has a market capitalization of over $250 million, with more than 300 unique holders and $600,000 in liquidity and is issued on Ethereum. A separate BNB Chain-version has $246,000 in liquidity and a market capitalization of $24 million.

Trading volumes on such fake tokens – and scams in some cases – are a glimpse of the crypto punting dream being alive and well.

Important events

9:00 a.m. HKT/SGT(1:00 UTC) Eurozone Core Harmonized Index of Consumer Prices (YoY/Jan)

12:30 p.m. HKT/SGT(4:30 UTC) United States Gross Domestic Product Annualized (Q4)

10:30 p.m. HKT/SGT(14:30 UTC) Japan National Consumer Price Index (YoY0/Jan)

CoinDesk TV

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

Coinbase’s Earnings Beat Expectations; SEC’s Shadow Crypto Rule Taking Shape as Enforcement Cases Mount

Coinbase reported Q4 earnings after the bell Tuesday, beating expectations, but usage continues to decline. Pastel co-founder Anthony Georgiades shared his crypto markets analysis. Plus, ConsenSys Director of Global Regulatory Matters Bill Hughes shared his outlook on the future of U.S. crypto regulation. And, SingularityDAO CEO Marcello Mari is probing the far reaches of where Web3 and artificial intelligence collide for CoinDesk's “BUIDL Week."

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