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Will the crypto market always follow bitcoin's price lead? It may not in the future, this asset manager explains. – MarketWatch

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Hello! Welcome back to Distributed Ledger, our weekly crypto newsletter that reaches your inbox every Thursday. I’m Frances Yue, crypto reporter at MarketWatch, and I’ll walk you through the latest and greatest in digital assets this week so far. Find me on Twitter at @FrancesYue_ to send feedback or tell us what you think we should cover.
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Bitcoin BTCUSD is recently trading at around $42,900, with a 1.5% gain over the past seven days. Ether ETHUSD logged a 2.2% loss over the past seven days, recently trading at around $3,287. Meme token Dogecoin DOGEUSD rallied 6.9% over the past seven days, while another dog-themed token, Shiba Inu SHIBUSD recorded a 4.5% gain.
Major cryptocurrencies often trade in tandem, as investor sentiment shifts around news about macroeconomics, regulatory oversight, and broad adoption of digital assets. However, such correlations are likely to weaken as the crypto space becomes increasingly mature with different industry verticals, some industry participants said.   
“Every time there’s a huge correction, correlations go up very momentarily,” Jeff Dorman, chief investment officer at crypto asset management firm Arca told Distributed Ledger in an interview. But such correlations will decrease in a longer timeframe, according to Dorman.
Tokens in various sectors have posted drastically different returns during the past year. Bitcoin gained about 25%, while ether rose 216%. Among other blockchains, Terra’s LUNA rallied more than 10,770%, while Solana SOLUSD logged a gain of more than 4,000%. XRP XRPUSD and Cardano ADAUSD posted a return of 160% and 335%, respectively.  
During the same period, DeFi Pulse index, a capitalization-weighted index that tracks the performance of decentralized finance tokens, gained 42%.
Blockchain gaming token Axie Infinity AXSUSD and Sandbox traded up 16,419% and 13,024%, respectively.
“There’s no reason why just because two assets are wrapped in a digital asset wrapper that they should behave the same way,” Dorman said. “In the same way, why would you expect the healthcare stock to move in the same way that a gold ETF moves that an early stage technology ETF moves? They’re all ETFs doesn’t mean they’re similar.”
“It’s the same thing with digital assets. Just because they’re wrapped in a digital asset wrapper doesn’t make them similar assets. They behave differently. There’s different inputs that drive outputs,” according to Dorman.
This chart shows bitcoin’s correlation during the past three years with smart contract blockchain Ether, proof-of-stake blockchain Cardano, Metaverse-related token Decentraland MANAUSD, meme token Dogecoin, decentralized exchange token SushiSwap SUSHIUSD and centralized crypto exchange token Binance coin, respectively.
Though an ideal version would be presenting bitcoin’s correlations with different market value-weighted indexes of various verticals, the chart provides some general idea of how bitcoin has been trading with other cryptocurrencies.
Correlation ranges in magnitude from -1.00 to 1.00. A positive correlation means assets have been moving in the same direction, while a negative correlation means they moved in the opposite direction. The larger the absolute value of the coefficient, the stronger the relationship. 
Bitcoin has posted positive correlations with most of the selected crypto during the timeframe. Its correlation coefficient with ether is notably higher than that with other tokens. Bitcoin’s correlations with most crypto selected saw an uptick during the most recent round of market sell-offs.
Citadel Securities, the electronic market maker founded by Ken Griffin, on Tuesday announced a $1.15 billion investment from venture-capital giant Sequoia and cryptocurrency investment outfit Paradigm. 
In an opinion piece, MarketWatch’s Thornton McEnery wrote about how the deal could give Citadel the liquidity to go bigger and go abroad. “It’s been an open secret for years that Griffin wants Citadel to be the next Goldman Sachs, a financial-services superpower with a global reach that can make markets, dominate equity trading and fund deals of spectacular size,” McEnery wrote.
The deal may also hint at Citadel’s potential push into crypto, as Paradigm is a venture capital firm that focuses on investing in crypto companies and protocols. 
In a statement, Matt Huang, Co-Founder and Managing Partner of Paradigm wrote that “we look forward to partnering with the Citadel Securities team as they extend their technology and expertise to even more markets and asset classes, including crypto.”
Compared with some other major quantitative trading firms, Citadel has been somewhat late to the crypto game, which might be related Griffin’s long-time doubts around digital assets, though the billionaire in October said his firm would trade cryptocurrencies if they are regulated properly.
Other major high frequency trading firms, such as Jump Trading and Hudson River Trading have brought their quantitative approach to the industry, while quant hedge fund Two Sigma has also also hiring for crypto operations roles to build out its crypto trading business.
Coinbase announced Wednesday that it is purchasing derivatives exchange FairX in a push to expand the crypto exchange’s offerings for retail and institutional clients, giving them one spot to trade bitcoin and other cryptocurrencies, but also access to the growing world of related derivatives.
After Binance, Coinbase has the second-largest spot trading volume in cryptocurrencies, with a 24-hour trading volume of about $3.3 billion, according to CoinMarketCap.
The addition of FairX, a Chicago-based derivatives exchange with roots in the retail market, would help Coinbase expand by offering its clients access to certain crypto futures traded on a CFTC-regulated platform.
The trading volume of crypto derivatives stood at $2.9 trillion in December, surpassing that of spot trading, according to a report by data site CryptoCompare.
Changpeng Zhao, or CZ, founder of the world’s largest crypto exchange Binance, has a net worth of $96 billion, exceeding that of Mark Zuckerberg, according to the Bloomberg Billionaires Index. The wealth didn’t take into account CZ’s personal crypto holdings. Binance disputed the accuracy of Bloomberg’s estimates of Zhao’s net worth, saying that crypto is “susceptible to higher levels of volatility”, according to the Bloomberg article.
In a tweet last year, Zhao warned investors that it is important to manage their risks. “I could handle losing the house. I can always find a job at a bank if bitcoin went to 0. My (simple) life style would not be affected much. Not everyone is in the same situation,” Zhao wrote.
In other crypto-related news, more companies and banks are launching their own stablecoins, a type of cryptocurrency with its value pegged to another asset, often fiat currencies.
Pay Pal is exploring to launch its own stablecoin, while a consortium of banks, including  New York Community Bank, NBH Bank, FirstBank, Sterling National Bank, and Synovus Bank, is launching their own stablecoin called USDF.
In crypto-related company trading, shares of Coinbase Global Inc. COIN  traded down 1% to $232.75 Thursday afternoon. It was down 0.5% for the past five trading sessions. Michael Saylor’s MicroStrategy Inc. MSTR  traded 3.4% lower on Thursday to $497.34, and lost 0.3% over the past five days.
Mining company Riot Blockchain Inc. RIOT shares fell 3.2% to $20.44, with a 0.2% loss over the past five days. Shares of Marathon Digital Holdings Inc. MARA plunged 6% to $28.53, and down 2.7% over the past five days. Another miner Ebang International Holdings Inc. EBON traded 7.1% lower at $0.98, with a 5.5% gain over the past five days.
Overstock.com Inc. OSTK   tanked 2.85% to $52.23. The shares went down 2% over the five-session period.
Block Inc.’ SQ s  shares are down 3.7% to $144.15, with a 3.12% loss for the week. Tesla Inc. TSLA’s shares traded down 4% to $1,061.5, while its shares logged a 0.3% loss for the past five sessions.
PayPal Holdings Inc. PYPL lost 1.5% to $184.52, while it recorded a 4% loss over the five-session stretch. NVIDIA Corp. NVDA lost 4% to $268.47, and was looking at a 4.8% loss over the past five days.
Advanced Micro Devices Inc. AMD  went down 2.7% to $134.1 and lost 1.6% over the past five trading days, as of Thursday afternoon.
In the fund space, ProShares Bitcoin Strategy ETF BITO was 2.2% lower to $27.01 Thursday, while Valkyrie Bitcoin Strategy ETF BTF  was down 2.2% to $16.71. VanEck Bitcoin Strategy ETF XBTF fell 2.5% to $42.2.
Grayscale Bitcoin Trust GBTC was trading at $30.97, off 3.4% Thursday afternoon.

One key analyst is again making the case for equities. But beware what the fixed-income market is saying.

Frances Yue covers the cryptocurrency market as a Reporter for MarketWatch.

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Crypto

Cryptocurrency prices today under pressure: Bitcoin falls 3%, ether 6%; Uniswap gains | Mint – Mint

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  • The global cryptocurrency market cap today remained below the $1 trillion mark

Cryptocurrency prices today came under pressure after the US Federal Reserve delivered another big interest-rate hike and warned of economic pain from the aggressive policy tightening still to come. The Fed’s determination to raise rates to levels that hammer inflation at the cost of sliding asset prices sent a chill across global markets.
Bitcoin, the world’s largest and most popular cryptocurrency, was trading more than 2% lower at $18,627, came close to dropping below $18,000 level. The global crypto market cap today remained below the $1 trillion mark, as it was down over 2% in the last 24 hours at $943 billion, as per CoinGecko. On the other hand, Ether, the coin linked to the ethereum blockchain and the second largest cryptocurrency, continued to underperform and fell more than 6% at $1,260.
“Bitcoin, Ethereum, and most cryptocurrencies traded lower on late Wednesday after the Federal Reserve raised interest rates by 75 basis points marking the third consecutive time this year. BTC continues to struggle below the $19,000 since bears are more powerful than bulls in the market. The second largest crypto, Ethereum was seen changing hands above the $1,200 level. The price of ETH has been dipping since the Merge took place as miners continued to dump their ETH in the market coupled with macroeconomic factors. If the selling pressure from miners increases, ETH is likely to fall below the $1,000 level,” said Edul Patel, CEO and Co-founder of Mudrex.
Meanwhile, dogecoin price today was also trading about 3% lower at $0.05 whereas Shiba Inu slipped more than a per cent to $0.000011. Other crypto prices’ today performance also declined as XRP, Stellar, Solana, Polygon, Avalanche, Binance USD, Polkadot, Litecoin, Apecoin, Cardano, Chainlink, Tron, Tether prices were trading with cuts over the last 24 hours, whereas Uniswap gained.
Such a backdrop offers little respite for crypto markets. They were already reeling from a $2 trillion plunge from a 2021 record high, an unraveling pockmarked with blowups such as the Three Arrows Capital hedge fund and the Terraform Labs project — whose co-founder Do Kwon is wanted by authorities.
(With inputs from agencies)
 
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Bitcoin's Accumulated Momentum Is Going To Be Hard To Stop – Bitcoin Magazine

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While "the smartest people in the room" scan the horizon, bitcoiners are out there actually building the future they want to live in.
The below is a direct excerpt of Marty's Bent Issue #1259: "Bitcoin is action. The accumulated momentum is going to be hard to stop." Sign up for the newsletter here.
This morning I listened to a recent Macro Voices podcast with Brent Johnson from Santiago Capital. It was a very good conversation about the state of the global economy, particularly focused on the dollar's relative strength against other currencies and how things may play out as the dollar continues to strengthen as prophesied by the "Dollar Milkshake" theory. Here's a link to the episode for those interested.
Toward the end of their discussion Erik (the host) and Brent make it clear without saying anything explicitly that it is insane that global markets are essentially beholden to the whims of a very select few people, central bankers, out of the billions who are alive on this planet. The fact that the world hinges on the cryptic language of people who are completely disconnected from reality and do not suffer the consequences of their actions is a bit baffling. With that being said, what I'd like to focus on is the fact the Erik and Brent ended their conversation with a brief detour to discuss the next world reserve currency. Both gentlemen acknowledged that it would likely be a cryptocurrency – likely produced by one of the governments or a coalition of governments – and will certainly not be bitcoin.
To your Uncle Marty, this is an incredibly hilarious line of thinking from a couple of individuals who seem to "get it" in regards to the fact that the fiat system is doomed for failure and it's failure is being driven by incompetent central planners. To think that the solution to bad central planning from an incompetent group will be better central planning from the same group via a fresh slate a CBDC or something like it would provide. Even funnier is the fact that they emphatically proclaim that bitcoin most certainly will not become the dominant money in the world while deriding "bitcoin maximalists". This is our edge, freaks.
While "the smartest people in the room" scan the horizon waiting to place their bets on something that hasn't materialized yet and is sure to end in failure if it ever does because it will suffer from the same centralized attributes that doomed the dollar, bitcoiners are out there actually building the future they want to live in. The macro mensches of the world can continue to sit on the sideline and pontificate about what they think will come to market. Bitcoiners will continue to act and bring their distributed, censorship resistant, sound money to market. And the headstart bitcoin has amassed is approaching insurmountable. It is a step-function improvement on the incumbent monetary system in every way.
It's provably scarce and extremely hard to change.
You can send it over the internet.
You can divide more granularly.
It is extremely hard to prevent someone from receiving or sending bitcoin if used correctly.
And, what might be the most underappreciated aspect, it is beginning to become an integral part of the energy sector. And as we're finding out now energy is pretty damn important. Arguably the most important asset on the planet. Bitcoin becoming an essential for energy producers makes it significantly harder to kill from a logistical and political perspective.
We are so early.

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Boba Network Partners With Avalanche, Boba AVAX L2 to Provide 'Faster Transactions and Lower Fees' – Blockchain Bitcoin News – Bitcoin News

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by Jamie Redman
On Wednesday, the layer two scaling solution that leverages optimistic rollup technology, Boba Network has revealed it now supports the proof-of-stake (PoS) network Avalanche. According to the Boba Network team, the new Avalanche support will produce “faster transactions and lower fees.”
Boba Network, the layer two (L2) scaling project introduced Boba AVAX L2 on Wednesday via the team’s Twitter account. “We’re over the slopes to announce our partnership as an official scaling solution for Avalanche,” Boba said. “Avalanche offers blazing fast speeds, low costs, and eco-friendly solutions: Boba AVAX L2 holds true to those values and enhances it further.”
Boba is already connected with the Ethereum (ETH) network and at the time of writing, l2fees.info stats show Boba’s fee to move ether today is $0.17, and to swap tokens the estimated price is $0.30. That is cheaper than the current 34 gwei ($0.96) to send ether onchain, according to etherscan.io’s gas tracking tool. A high-priority decentralized exchange (dex) swap can cost $8.47 per transaction onchain, so Boba’s $0.30 cost to swap, is 96.45% cheaper.
“Faster transactions, lower fees: Boba AVAX L2 is catered for all heavy transactions, throughput-reliant protocols [and] anyone wanting to be part of the next generation,” Boba further declared on Wednesday. The team further explained it is joining partner decentralized applications (dapps) like Sushiswap and Evoverses with the new support. Boba added:
While Sushi will be deploying their Legacy Swap on Boba AVAX L2, Evoverses’ will be joining with their 3D PvP gameplay, powered by the Unreal Engine 5 [and] Hybrid Compute to help the game scale and reach its full potential.
L2 projects like Boba Network have been partnering with a great deal of industry heavyweights and blockchain networks in recent times. Opensea recently detailed the leading NFT marketplace has added Arbitrum support and the NFT market competitor Rarible revealed Immutable X support. Arbitrum, Immutable X, and Boba Network are all L2 projects and other competitors include Loopring, Zksync, Optimism, Metis, Polygon Hermez, and Aztec.
What do you think about Boba Network adding Avalanche support? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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