In the face of the recent turmoil in the US financial system, cryptocurrency markets have shown tenacity. Bitcoin (BTC) in particular is thriving at the moment, according to a study report released Friday by crypto exchange Coinbase (COIN). Since the middle of February, bitcoin has outperformed other assets, with the cryptocurrency’s supremacy as a proportion of the total crypto market cap rising to 47.7% from 43.9% in March.
Bitcoin has been trading between $27,500 and $28,900 over the weekend, challenging the $30,000 level. “First Mover” plunged into markets with The Crypto Trader Author Glen Goodman. David Duong, Coinbase’s Institutional Head of Research, also gave in his input in the discussion. Tanvi Ratna, CEO and Founder of Policy 4.0, and Polygon Co-Founder Sandeep Nailwal attend the discussion as well.
According to the report, “part of the reason is that the stress in the banking system reinforced bitcoin’s store-of-value properties,” and because BTC operates primarily outside of the conventional financial system, “it offers a hedge against current conditions.”
Bitcoin’s correlation to the S&P 500 market indicator fell to 25% at the end of March from a high of 70% in May last year, according to analysts. They did not provide a timeframe for the association estimate. According to analysts David Duong and Brian Cubellis, it has also profited from investor worries about the regulatory state of other cryptocurrencies.
The failure of crypto-friendly organisations such as Silicon Valley Bank and Signature Bank resulted in the loss of crucial US dollar payment lines for cryptocurrency. These institutions would act as a trading platform for the currency. Along with the financial mess, the Securities and Exchange Commission (SEC) has been hammering the crypto sector. The SEC has been issuing Wells notices to companies, with Coinbase being the most recent casualty. The SEC Chair is scheduled to appear before Congress to explain his moves against the crypto sector.
The Wells notice caused a dispute between Coinbase and the SEC. Brian Armstrong, the CEO has openly asked the SEC to set down clear rules and regulations for the crypto industry. He also demanded an explanation for the notice but did not receive any response from the regulators. Even though the CEO has claimed that the morale is once again high, tension has developed between the SEC and the rest of the crypto market. The Chair of the SEC is scheduled to appear in front of Congress to defend his actions against the industry.
According to the report published, the cryptocurrency’s relative outperformance versus other digital coins and tokens represents investor worries about the regulation status of other digital assets. The thinner liquidity of some cryptocurrencies including Bitcoin versus stablecoin trading pairs is also a cause of worry.
