Bitcoin weekend’s larger plunge compared to rivals, like Ethereum, is connected to the macro-developments around it.
The biggest cryptocurrency in market capitalization plummeted by 21% on Saturday compared to Ethereum’s 17% fall. Bitcoin is now trading around $48,200 but still below Friday’s close by around 10%.
Fundstrat head of digital-asset research Sean Farrell notes that the rest of the crypto industry is registering a faster recovery than BTC.
Ferrell says that the industry-wide crypto rout is related to the Omicron Covid-19 variant, a potential Federal Reserve taper reaction, and the activities in the derivatives market.
Institutional investors have increased their involvement in the crypto space, especially in bitcoin, as the regulatory framework takes shape. The move is seen as a positive development, but the recent plunge suggests otherwise.
Ferrell says that the weekend plunge shows that crypto assets remain volatile. Bitcoin has grown more than 70% compared to the S&P 500, which has turned in around 33%.
Source: Bloomberg