Crypto defies market conditions to battle the dollar for best performance
With ongoing macroeconomic factors affecting various asset classes, cryptocurrencies and the US dollar are fighting to stand out as the best product.
In particular, the MVIS CryptoCompare Digital Assets 100 Index has registered a growth of 5.4% since the end of June. At the same time, the Bloomberg Dollar Spot Index has reached a record high with growth of 7.2% in a period where stocks, bonds, commodities and gold continue to lose.
Although the macroeconomic elements have affected both cryptocurrencies and stocks, the latter seem to have suffered the most. In particular, the markets have been hit by increased monetary policy tightening by global central banks in an attempt to curb soaring inflation.
The dollar’s strong performance stems from its status as an inflation hedge currency. Furthermore, the dollar’s performance has continued as the Fed raised interest rates by 75 basis points for the third meeting in a row.
Ethereum’s merger boosts crypto prospects
Furthermore, cryptocurrencies’ incredible performance has mainly benefited from Ethereum’s (ETH) gains following the historic Merge upgrade. The upgrade has been seen as bullish sentiment around the asset’s shift towards the Proof-of-Stake (PoS) protocol.
Interestingly, the fortunes of the cryptocurrency market seemed to decline after the infamous Terra (LUNA) ecosystem crash. The crash partly contributed to the massive sell-off in the market.
“This recent performance is perhaps an early indicator that we are past the contagious volatility following the Luna damage and collateral damage from crypto borrowers in the last quarter,” said Jonathon Miller, CEO of Kraken Australia.
Elsewhere, Bitcoin (BTC), central to dictating the crypto market trajectory, is struggling to avoid further correction below $20,000. At press time, the flagship cryptocurrency was trading at $19,200, having recorded gains of nearly 2% over the past 24 hours, while Ethereum was valued at $1,330.
It is worth pointing out that since the Merge upgrade, Ethereum recorded significant corrections after the event turned out to be a “buy the rumor and sell the news event.”
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
