Macro uncertainties started weighing in on the “New Year” rally across asset classes as markets witnessed a healthy correction last week. Bond markets are waking up to the risk that the Fed hikes rates higher and holds them there for longer.
The yield curve between two- and 10-year Treasuries inverted further to its most extreme levels since the early 1980s. With S&P 500 and NASDAQ falling by ~3.5%, crypto giants BTC and ETH’s fall in prices by ~1.5% seems benign. Overall, crypto markets still have a market capitalisation of over $1.1 trillion, a market analysis by Parth Chaturvedi, Crypto Ecosystem Lead, CoinSwitch, shared with Super Crypto News, said.
What is interesting to note is the short-term “decoupling” between BTC and S&P 500, as the much-touted narrative from last year of BTC trading in sync with high-growth tech stocks seems to be losing steam. The correlation between BTC and S&P 500 had shot up above 0.8 but is now down to ~0.3, suggesting that BTC behaves like a unique asset class and can be considered for portfolio diversification, the analysis added.
In token-specific action, Stacks’ STX continued its price surge, rising over 150%, as Ordinal NFTs on the Bitcoin network continues to gain traction. Stacks could be the Layer 2 solution of choice for a growing BTC NFT market, while some analysts believe that it could have broader adoption in DeFi as well.
The other narrative that continues to grow is the rise in prices of “Chinese Coins” or tokens/protocols with a heavy China dominance in terms of developers and projects. Filecoin (FIL up by >40%), Polkadot (DOT up by 10%), VeChain (VET up by 18%), and Neo (NEO up by 40%) are the main gainers from this increasingly bullish theme. A Bloomberg report added fuel to this fire by stating that Hong Kong would become the gateway for Chinese crypto access.
CRE8, an Indian Rupee denominated Virtual Digital Asset (crypto) index, was up 3.4% in the past 7 days. The index value stood at Rs. 3065.46 at 8 AM, February 24, 2023.
