Level 1 — Absolute Beginner

Bitcoin is digital money. It lives only on computers. Its price goes up and down every day.

On Wednesday morning, one bitcoin cost about 76,655 dollars. In the night it went down to about 75,728 dollars. Then it came back up a little.

Why did the price move? People in America voted on Tuesday. The Democrats won. Some traders think new rules for digital money will now come more slowly.

There is a number called the fear index. It shows how worried traders are. It was 26 on Tuesday. On Wednesday it was 34. Traders are still careful.

digital

Existing on computers, not as a real object you can hold.

a price

The amount of money something costs.

to go down

To become smaller or lower.

a trader

A person whose job is to buy and sell things to make money.

a rule

Something that says what you can and cannot do.

slowly

Taking a long time, not fast.

fear

The feeling you have when you are afraid.

careful

Thinking about risk before you act.

Level 2 — Elementary

Bitcoin was trading at about 76,655 dollars on Wednesday morning, slightly lower than the day before. During Tuesday night, while American votes were being counted, it fell as low as 75,728 dollars before recovering. All the world's digital coins together are now worth about 2.66 trillion dollars, and bitcoin alone makes up nearly 58 percent of that.

Several things pushed the price around. The Democrats won control of Congress, and some investors expect financial regulators to look harder at digital money, which could delay a new American law on crypto rules. Big investment funds that hold bitcoin for customers saw 643 million dollars leave in a single day, the largest one day exit since June.

There was also the shadow of a robbery. Last week about 6.34 billion dollars was moved out of the exchange Binance. Roughly 2.85 billion dollars of it has since been frozen or intercepted, and the company says it has replaced almost all of the affected customer tokens.

Share markets looked calmer than crypto. On Tuesday the Nasdaq Composite closed up 0.83 percent at 25,372 points and the S&P 500 rose 0.37 percent to 7,568, while the Dow Jones Industrial Average slipped 0.38 percent. Gold eased to about 3,925 dollars an ounce and American oil stayed close to 97 dollars a barrel. Traders are now waiting for Friday's American jobs report.

to trade at

To be bought and sold at a particular price.

to recover

To return to a better level after falling.

a trillion

A million million, written as 1 followed by twelve zeros.

an investor

A person who puts money into something hoping it will grow.

a regulator

An official body that supervises an industry.

an exchange

A marketplace where things such as shares or coins are bought and sold.

to freeze money

To block money so that nobody can move or spend it.

a jobs report

An official count of how many people are working in a country.

Level 3 — Intermediate

Bitcoin spent Wednesday morning hovering just under 77,000 dollars, a level that would have looked like a crisis a year ago and now reads as ordinary volatility. CoinGecko data put it at 76,655 dollars at four in the morning in London, down 0.3 percent over 24 hours, with a market value of roughly 1.539 trillion dollars and a 57.8 percent share of the whole digital asset market. The overnight low, recorded while American votes were still being counted, was 75,728 dollars. Ether was almost unmoved at 2,259 dollars.

Three forces are pulling in the same direction. The first is political: the Democratic sweep of Congress has investors wondering whether the Clarity Act, the American bill meant to settle which regulator supervises which digital asset, now slides down the legislative queue, and whether the Securities and Exchange Commission and the Commodity Futures Trading Commission become more assertive. The second is institutional. Exchange traded funds holding bitcoin shed 643 million dollars in a single session, described by one outlet as the largest single day institutional exit since June. The third is leverage: more than 366 million dollars of derivatives positions were liquidated, and the damage fell mostly on traders who had borrowed to bet on a rising price.

Sentiment has improved from genuinely frightened to merely wary. The widely watched fear and greed index printed 34 on Wednesday, up from 26 the previous day, but well below the 51 of a week earlier and the 70 of a month ago. The number is a reminder of how quickly the mood in this market resets. Meanwhile the Binance theft continues to cast a shadow: about 6.34 billion dollars was moved out of the exchange on 29 October, roughly 2.85 billion of it has been frozen or intercepted, and net outflows from the platform over the following week still ran to about 11.9 billion dollars.

Traditional markets told a gentler story. The Nasdaq Composite added 0.83 percent on Tuesday to close at 25,372.01 and the S&P 500 gained 0.37 percent to 7,568.96, lifted by chipmakers, while the Dow Jones Industrial Average lost 0.38 percent. Gold slipped towards 3,925 dollars an ounce and American crude held near 97 dollars a barrel after reports of a strike on an Iranian island. Elsewhere, Australia's central bank raised its policy rate by a quarter of a point to 4.85 percent, and Citadel Securities and Cboe sued the Commodity Futures Trading Commission over single stock perpetual contracts. Friday's American payrolls report is the next scheduled test.

volatility

The tendency of a price to move sharply up and down.

market value

The total worth of all the units of an asset in circulation.

a legislative queue

The order in which proposed laws wait to be considered.

assertive

Confident and forceful in using authority.

leverage

The use of borrowed money to increase the size of a bet.

Level 4 — Advanced

There is a particular kind of market day in which nothing dramatic happens and everything is nonetheless being repriced. Wednesday was one. Bitcoin sat at 76,655 dollars on CoinGecko's four o'clock reading, down three tenths of a percent over the day, having touched 75,728 dollars overnight while American returns came in. Its capitalisation of roughly 1.539 trillion dollars represents 57.8 percent of a digital asset complex now worth about 2.66 trillion, itself down 0.6 percent on turnover of 64.8 billion. Ether, at 2,259 dollars, barely twitched. Quoted prices diverge between venues because the timestamps diverge; the Sunday Guardian had bitcoin above 77,600 at a later hour. Precision here is a matter of knowing which clock you are reading.

The political transmission mechanism is worth stating plainly, because it is more specific than the usual talk of uncertainty. A Democratic Congress raises the probability that the Clarity Act, the statute intended to divide jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Commission, loses its place in the queue, and raises the probability that both agencies take a firmer line in the interim. For an asset class whose institutional adoption has been underwritten by the expectation of regulatory settlement, a delay is not a neutral event. Flows registered the point before the commentary did: 643 million dollars left bitcoin exchange traded funds in one session, characterised as the heaviest single day institutional exit since June, and more than 366 million dollars of leveraged positions were liquidated, overwhelmingly on the long side.

Set against that, sentiment actually improved. The fear and greed index moved up to 34 from 26, which is progress only in the sense that a fever of 38 degrees is progress from 39. A week ago the reading was 51; a month ago it was 70. The Binance theft remains the unresolved variable: 6.34 billion dollars left the exchange on 29 October, some 2.85 billion has been frozen or intercepted, the company says 98 percent of affected token assets have been replenished, and depositors have nevertheless withdrawn a net 11.9 billion dollars over the week that followed. Confidence is slower to restore than a balance sheet.

Equities, meanwhile, behaved as though none of this concerned them, which is the usual division of labour. The Nasdaq Composite closed Tuesday 0.83 percent higher at 25,372.01 and the S&P 500 up 0.37 percent at 7,568.96, carried by Nvidia, Micron, AMD and a near six percent move in Oracle, while the Dow shed 0.38 percent and Apple fell about two percent. Gold eased to the 3,925 dollar area, silver lost close to two percent, and West Texas Intermediate firmed to about 97 dollars on reports of an American strike on Iran's Qeshm Island. Two further items deserve a note: the Reserve Bank of Australia lifted its cash rate 25 basis points to 4.85 percent, and Citadel Securities joined Cboe in suing the Commodity Futures Trading Commission over single stock perpetual contracts, a reminder that the fight over who regulates what is not confined to crypto. Friday's non farm payrolls release is the next hard datum in the calendar.