All eyes were on Ethereum last week as it successfully completed another major tech upgrade (the “Shanghai” update) after the September one (the “Merge” event) and the price of the token of ether straightened. As ether climbed throughout the week, bitcoin – the best performer this year – was trading more choppy. It gained 8% for the week, according to Coin Metrics, thanks to an increase in Ether’s post-Shapella rally. Ether advanced 12.32%. Bitcoin received an additional boost after Thursday’s release of the March PPI confirmed the downward trend in inflation compared to the PPI update. consumption on Wednesday. However, even though inflation appears to be falling, it is still above where the Fed feels comfortable, and investors are concerned about whether the central bank can orchestrate a labor market slowdown that does not not tip the economy into recession. Investors are also weighing the minutes of the Federal Reserve’s March meeting, which showed the central bank expects fallout from the US banking crisis to tip the economy into recession later this year. . A downturn would be an important time for crypto to show its stripes, said Yung-Yu Ma, chief investment strategist at BMO. “This could be the first recession test for crypto,” he told CNBC. “Will this be a stabilizing event that leads to greater institutional and investor interest in crypto? Or will this be an event where people lose money at large and concerns economics ripple through the crypto space.” “I think it could go either way, but so far what we’re seeing in the crypto space is encouraging,” he added. BTC.CM = ETH.CM = line 10/04/2023 Bitcoin (BTC) and ether (ETH) during Shapella upgrade, inflation data Callie Cox, investment analyst at eToro trading platform, said when it comes to the crypto market, bank earnings are highest on his radar heading into the week. “This earnings season in general is going to be a turning point for US markets and corporates, but the start of earnings season is heavily focused on financials and banking – the most watched sector right now, and the industry that fueled the decentralization argument,” she says. Central to Bitcoin’s design is decentralization and the idea that people can transact without going through a financial institution. Bitcoin rose 22% in March as the U.S. regional banking crisis opened investors’ eyes to the diversity of the bitcoin narrative — particularly that the crypto asset can serve as a hedge against uncertainty and that the network can serve as an alternative banking system. Cox added that the market may take a break this week as the economic calendar is calmer. However, several Fed officials are also due to speak, which could trigger some volatility. “Investors might continue to be picky and seek perceived quality, even in the crypto space,” she said. “It has helped bitcoin this year as it is considered a risky asset outside of crypto, but a store of value in crypto. Ethereum is a brand name in crypto and it has innovations to report, but it’s considered a building blockchain, which may not be as appealing when people turn away from risk.” Additionally, Securities and Exchange Commission Chairman Gary Gensler will testify before the House Financial Services Committee on his agency’s oversight. Investors will be watching to see if he continues to point out that most crypto tokens are securities and should fall under securities laws. After Ethereum transitioned to a proof-of-stake protocol last year (the Merge upgrade), he argued that ether could be a security. Despite the sharp rise in price this year, the overall US regulatory crackdown on crypto that began in January has cast a dark cloud over the industry. Last week, bitcoin and ether both broke through key resistance levels. Bitcoin topped $30,000 for the first time since June and Ether topped $2,000 for the first time since August. Both cryptocurrencies had maintained these levels at the end of the week, confirming the bullish trend that analysts have been following since the start of the year. Ma said he expects to see bitcoin consolidate around the current $30,000 level, based on its behavior in the face of a slowing economy and its degree of decoupling from the Nasdaq. “The mass market selling point for crypto from an investment perspective was lower correlation,” he said. “The big investor diversion happened at a time when it was quite strongly correlated to the Nasdaq. is the main driver or the main investment thesis – well, it’s just too much correlation.”
Crypto Could Take a Break as Investors Refocus on Banking Economics [Advance Cash ]