Bitcoin Drops Below $56.5K on Risk-Off Day

This article originally appeared in First Mover, CoinDesk's daily newsletter, putting the latest moves in crypto markets in context.

Bitcoin (BTC) dropped to just over $56,000 on Wednesday after Kamala Harris was perceived to have bettered Donald Trump in their first presidential debate, while crypto policy went unmentioned.

The largest cryptocurrency by market capitalization was trading at $56,496.83 at press time, down 1.1% over the past 24 hours. BTC had dropped below $56,000 earlier in the day.

The broader crypto market was also lower on Wednesday, with the CoinDesk 20 Index dropping about 1%.

Among other top performers, Ether (ETH) dropped 1.45% to trade at $2,314.39, while XRP fell 0.8% to trade at 80 cents. Binance Coin (BNB) dropped 1.2% to trade at $704.03, while Cardano (ADA) fell 0.4% to trade at $3.27.

The Japanese yen rallied to 140.70 per U.S. dollar, its strongest since January, continuing to appreciate past 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.

Harris appears to have beaten Trump in the first debate, based on the direction of prediction bets on Polymarket.

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 in a report on Wednesday.

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.

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Jamie Crawley is a CoinDesk news reporter based in London.

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.