Bitcoin Stuck Below
BTC is down 6% in the last 24 hours, compared to a 3% drop in ETH and a 20% gain in STX.
On Thursday, most cryptocurrencies witnessed rough trading conditions, showing a lack of confidence among traders and investors.
Investors have been on edge due to geopolitical uncertainty, particularly as Russia’s assaults on Ukraine continue. Meanwhile, diplomats’ discussions have stalled after the two sides failed to reach an agreement on a cease-fire on Thursday.
On the macro front, the European Central Bank revealed intentions to end its bond-buying programme by September, potentially leading to higher interest rates. In a report on Thursday, John Hardy, head of foreign-exchange strategy at Saxo Bank, called the news a “game-changer,” pointing to rising pressure on central banks to battle inflation by tightening monetary policy, which might impact on speculative assets.
On Thursday, cryptos and equities were marginally lower, while oil prices fell. Traditional safe havens, such as gold and the US currency, rose in value.
On Thursday, alternative cryptocurrencies (altcoins) faced less selling pressure than bitcoin (BTC). Ether (ETH) has down 3% in the last 24 hours, while Bitcoin (BTC) has fallen 6%. Meanwhile, STX, the Stacks network’s native currency used to power smart contracts, increased by up to 20% on Thursday.
Bitcoin’s connection with the S&P 500 has strengthened in the last year, owing in part to an increase in volatility in global markets. High volatility, along with increasing inflation, often generates a positive change in correlations, particularly between equities and bonds.
During times of market stress, investors seek to limit their risk exposure. Furthermore, the increased link between the S&P 500 and bitcoin may indicate a larger trend away from speculative assets.
This time, though, growing inflation is included in. Commodities, which are traditionally used as an inflation hedge, tend to rise at the onset of an inflationary cycle. As a result, the connection between bitcoin and commodities has recently dropped to more typical levels (zero correlation).
Following the March 2020 market sell-off, there was a boom in demand for speculative assets, and the current macroeconomic situation has led investors to unwind their hazardous bets. This might indicate a time of reduced returns for both stocks and cryptocurrency.
A summary of altcoins
THORChain’s RUNE has increased by 37% after the launch of DeFi synthetic assets: Protocol for inter-chain communication THORChain launched synthetic asset trading on its platform Wednesday night, leading the price of its native token, RUNE, to rise by up to 37% from a low of $4.05 on Wednesday to a high of $5.56 on Thursday. Its trade volume increased by 93% in the last 24 hours. In this example, the synthetic assets – or blockchain-based representations of another asset – are backed by half the original asset’s value and half in RUNE. According to CoinDesk’s Shaurya Malwa, this lets users to keep and trade a representation of a layer 1, or base, blockchain asset quicker and at a lesser cost.
Fantom-based algorithmic assets protocol Fantasm Finance was attacked for more than $2.6 million worth of crypto early on Thursday, with the stolen tokens traded for ether utilising privacy protocol Tornado Cash. “Our FTM collateral reserve has been exhausted, however there is still a total of 1,820,012 FTM pool balance available for redemption,” the project’s organisers tweeted. According to Shaurya Malwa, FTM is Fantom’s native token and one of the tokens utilised as collateral backing on Fantasm.
JustCarbon and Likvidi introduce blockchain carbon credit markets: JustCarbon and Likvidi have both announced the creation of trading platforms for tokenized carbon credits, allowing players to exchange greenhouse gas emissions and reduce their carbon footprints. JustCarbon announced the launch of a marketplace for its JustCarbon Removal Units (JCRs) on Thursday. On Wednesday, Likvidi unveiled a platform for their Liquid Carbon Credit (LCO2).