Crypto Remains Hopeful As Market Moves Sideways: Report
After a turbulent month for the crypto industry in March, Bitcoin’s (BTC) price went sideways in April despite some volatility. The meteoric rise of memecoins, such as PEPE, made headlines and First Republic, another mid-sized US bank, went under. However, based on current market sentiment, there is a gap between markets and policymakers: While US Securities and Exchange Commission Chairman Jerome Powell publicly states that interest rates are unlikely to fall this year, markets for risky assets such as crypto have firmly priced in a pivot in the coming months.
In times like these, it is wise to drill deeper into the fundamentals that will shape future market movements. With an uncertain macro environment and a looming regulatory crackdown in the US, there are other notable developments that are easily drowned out by these dominant news stories.
The report is available for free on the Cointelegraph Research Terminal.
For those looking to gain a deeper understanding of the crypto space’s various sectors, Cointelegraph Research publishes a monthly Investors Insights report that delves into venture capital, derivatives, decentralized finance (DeFi), regulation and much more. Compiled by leading experts on these various topics, the monthly reports are an invaluable tool to quickly get a sense of the current state of the blockchain industry.
NFT hype fades as memecoins take over
Nonfungible token (NFT) collectibles are one of the few sectors that took a big hit this month. Memecoins, such as PEPE, may be partly responsible for this, as they absorbed the attention, producing sensational gains. BRC-20 tokens, a new abstraction created on the Bitcoin Ordinals protocol, can also compete for cash flow from traditional NFT collectors. Sellers have started to consistently outnumber buyers on NFT marketplaces recently, and this trend is likely to continue.
There are concerns that the NFT market is going into freefall, as all important metrics, such as volume and active wallets, have been on a sharp decline. NonFungible reported only 49,200 active wallets and a sales volume of $80,500 this month. The NFT market wars, combined with waning excitement around NFTs, are other driving factors behind this long-term development.
Despite the general slowdown in the NFT market, the NFT lending market is a niche NFT sector that is gaining momentum. Since the start of 2022, this sector has witnessed double-digit growth every month, and this continued in April with a 16.13% increase in new users.
Mining stocks outperform BTC
Each Cointelegraph Research Monthly Trend Report includes coverage of mining economics and crypto stocks. For investors interested in increasing their exposure to BTC, mining stocks have historically been a popular option. While idiosyncratic factors have negatively impacted individual stocks this month, the sector as a whole appears to have exited the 2022 bear market.
The highest return was again recorded by TeraWulf, which continued its rally with a further 85% increase in its evaluation. CleanSpark, IrisEnergy and BitDigital were other strong winners. Notably, the stock in April outperformed BTC overall after lagging the previous month. Where Bitcoin only closed up 2.8%, the biggest crypto stocks, dominated by mining, registered 12.9%
Of course, increased valuations in the mining industry are very sensitive to BTC’s price action. For those with confidence in improving macroeconomic conditions for risk assets, these stocks can offer good entry points as they were previously hit by the bear market. The stock section of the monthly report tracks fundamentals of major companies in the industry and thus changes our usual analysis of Bitcoin mining economics.
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The opinions expressed in this article are for general information purposes only and are not intended to provide specific advice or recommendations for any individual or about any specific security or investment product.
