In the cryptoverse, a good moment has begun for Bitcoin.
It’s been a terrific month for bitcoin, which we haven’t said in a long time. After months of decline, it increased by more than 17% in July, its greatest performance since October. Ether gained 57% in one month, the most since January 2021.
The surge coincided with advances in riskier assets such as stocks, as investors anticipated that economic weakness would dissuade the Fed from tightening monetary policy quickly. Bitcoin’s 40-day correlation to the tech-focused Nasdaq is now 0.90, up from 0.41 in January, with 1 indicating that their prices move in perfect lockstep.
Since late November, the leading cryptocurrency has been constantly favourably connected with the Nasdaq, in contrast to past years when it would routinely turn negative, implying they went in opposing directions.
The convergence in July was described as “excellent news” by Itai Avneri, deputy CEO of cryptocurrency trading site INX.
“It suggests institutional investors are treating bitcoin as if it were any other asset,” he explained. “When the market flips – and it will – these institutions will return and invest in cryptocurrency.”
The value of the global cryptocurrency market pushed back beyond $1.15 trillion last month, adding nearly $255 billion since the end of June, according to CoinGecko data.
According to data firm CryptoCompare, assets under management in digital asset investment products increased 16.9% to $25.9 billion in July, reversing a 36.8% loss in June.
However, trade has been light, signalling that many investors believe it is too soon to turn bullish in a highly uncertain macro background, with inflation rampant and America and Europe facing a recession, not to mention the implosion of some major crypto companies.
According to CryptoCompare, average daily volumes across all digital asset investment products decreased by 44.6 percent to $122 million, the lowest since September 2020.
“Despite the current bounce, we’re bearish (on crypto) on a medium-term horizon, which aligns with our stance on equities,” MacroHive researchers wrote on Friday, citing inflation, recession risks, and rate hikes.
