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Youre readingFirst Mover, CoinDesks daily markets newsletter. Assembled by the CoinDesk Markets Team and edited by Bradley Keoun, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you dont have to. You cansubscribe here.

Price Point

Bitcoin was down early Thursday to about $11,250, extending Wednesdays sell-off and falling to its lowest price since early August.[Update: At press time prices had slumped further to around $10,850.]

The cryptocurrency tumbled 4.4% on Wednesday, the most in a month, leading to a heightened level of margin calls and position liquidations. Prices appeared to fall in sync withgold and silver prices, which tumbled as the dollar reboundedfollowing a recent slide.

Failure to hold at the $12,000 level has turned the milksour, the crypto trading firm Diginex wrote in a note to clients. Leveraged longs have been forced to drink it.

Market Moves

With stocks soaring to new records after a decade-long climb, traders in traditional markets are asking how much higher theycango in the midst of a global pandemic, openly discussing whether the market is justpropped up by government stimulus checks and Federal Reserve money injections.

The conversation around bitcoin is very different. The assumption among many digital-asset investors is the cryptocurrencys price will definitely, inevitably go higher, much higher. Its only a matter of time.

Cameron and Tyler Winklevoss, who run the cryptocurrency exchange Gemini, wrote last week thatbitcoin prices could reach $500,000, in an extensive analysis that somehow relates to adatabase of 600,000 asteroids.

Nobody really knows if any of that will pan out, of course. Whats clear is a lot of investors have bought bitcoin because they see it as a deep out-of-the-money option (with no expiration date) on financial Armageddon, severe currency debasement or at the very least an inflation rate well above the Federal Reserves 2% annual target. According toCoinDesk Researchs monthly review published this week, bitcoins price appears to be rising whenever the dollar falls in foreign-exchange markets.

Bitcoin costs $11,200 now, and it might be possible to lose it all, but it also might be worth $500,000 at some point. Thats the general gambit anyway.

Invented just 11 years ago, bitcoin is exceedingly difficult to value partly because it has such a short track record. Similar to gold and many other commodities, the cryptocurrency offers no yield,so bond math wont work. Bitcoin has no earnings or dividend, so stock analysis wont work either.

Philip Bonello, director of research for the money manager Grayscale (owned by CoinDesk parent Digital Currency Group), says his favorite chart for thinking about bitcoins price trajectory might be one showing holders versus speculators. A holder in this case is defined as a bitcoin that has not moved for one to three years, while a speculator coin has moved in the past 90 days.

An increase in holders is considered likely bullish, while an increase in speculators is likely bearish, according to arecent Grayscale report. The idea is that its positive for the market if more investorsappear to be holding the cryptocurrency for the long term, versus those who merely appear to be in it for a quick volatility ride.

Right now, the chart shows holders increasing and speculators decreasing. According to Grayscale, its a similar structure to that of early 2016, just before bitcoin went on a bull run toward its all-time high around $20,000.

Its reassuring, Bonello said Wednesday in a phone interview, that the sentiment of the investor base is growing day by day. The holders appear to have been unfazed by the volatility witnessed in March, when the spread of the coronavirus quickly sent bitcoin prices swooning from above $9,000 to below $5,000. Its probably unlikely that theyre going to sell right now at $11,000, Bonello said.

All of this might mean nothing for the future price of bitcoin. It just shows that a growing number of investors are holding onto their tokens in a bet that the cryptocurrencys price will or even that it might eventually go up. By a lot.

Bitcoin Watch

Token Watch

Ether (ETH):Open positions in Deribits ether options hitrecord high above $500 million.

Bitcoin Cash (BCH):Proposed changes by development team couldreduce rewards for miners, splitting community support.

OKB (OKB):OKEx CEO says foundation burned 3.8 million of its utility tokens, just over 1% of total supply, deepening commitment to deflation at time when central banks around the world are ceaselessly printing money.

Theta Network (THETA):Decentralized streaming network says DeFi could be used to pay content providers who arejust starting out, with few followers.

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