The British pound fell to a historic low of $1.03 this week, sending shockwaves through global markets and adding to concerns about the United States' already rapid interest rate hikes.
Despite the fact that the US Dollar Index has been trending upward on a monthly basis since May of this year, six of the 11 Wall Street stock indexes fell by more than 2%, as concerns about a global economic slowdown persist.
Coinbase Global (COIN) was down 9.5% in the previous 24 hours as of 2:00 p.m. ET, following a downgrade from Wells Fargo to “underweight” on Thursday.
According to Serhii Zhdanov, CEO of EXMO, a UK-based cryptocurrency exchange, in prior years, inflation was frequently connected with an increase in local interest in purchasing cryptocurrencies.
However, the crypto bear market caused by the crashes of several cryptoassets has harmed cryptocurrencies' reputation and interest, he claims.
“Cryptocurrencies are no longer perceived as hedge assets,” Zhdanov said.
Overall, the values of bitcoin and ether have remained pretty steady.
Waning correlation with tech
Bitcoin climbed 2.7% in the last week, from around $18,000 last Thursday to a high of $19,600 today.
Since September 13, the leading cryptoasset has traded in a range of around $18,500 to $20,300.
Similarly, the price of ether has stayed stable over the last week, rising by almost 4% from $1,270 last Thursday to over $1,300 today.
According to Katie Talati, Arca's director of research, “in general, crypto is very adversely connected with the US currency, particularly bitcoin, which makes sense given that bitcoin represents a monetary alternative for the US dollar.”
Bitcoin and the larger cryptocurrency markets have historically been highly connected with the tech-heavy Nasdaq index (QQQ).
Correlation coefficient between BTC and QQQ — Positive values mean the assets trade together | Source: TradingView
Correlation coefficient between BTC and DXY — Negative values mean the assets trade inversely | Source: TradingView
“The rise in GBP this week, combined with other currency problems, has resulted in a stronger bid and narrative for bitcoin that we haven't seen in some months,” Talati added.
Other notable cryptocurrency token prices this week include Celsuis' CEL token, which fell from $1.5 to $1.3 following CEO Alex Mashinsky's announcement that he would be stepping down. Cosmos' ATOM token, which reached nearly $17 on Sept. 17 in the run-up to this week's Cosmosverse conference, has subsequently dipped back to around $12 as the conference comes to a close.
Talati stated the following week that she will be keeping an eye out for tokens such as Chiliz's CHZ token and Algorand's ALGO token, which will be featured during the FIFA World Cup in November, and Apecoin, which is preparing to debut staking at the end of October.
“[ether] is at the top of my list because, post-Merge, any new supply is locked up and new supply emitted is considerably lower than when Ethereum was a PoW chain,” she noted. I feel the market is grossly underestimating this trend.