Crypto Morning: Fed Determined to Contain Inflation with Recession Remedy Drives Wave of Selling in Stocks, Oil and Bitcoin

Charlie Taylor


Cryptocurrencies accelerate losses this Tuesday (11) and accompany the plunge of global assets. Bitcoin (BTC), the largest cryptocurrency, is down 3.1% over the past 24 hours, trading at $40,231, according to data from CoinGecko. Ethereum (ETH), the second largest, is down 1.9% at $3,027. In Brazil, Bitcoin drops 4.5%, to R$ 190,313, according to the Bitcoin Portal Index (IPB). The selling wave is general and hits stocks, bonds and even oil, which previously traded close to record levels, in a movement similar to the losses caused by the fear of monetary tightening in October 2018, shows an analysis by Bloomberg. Blame the Federal Reserve, determined to reduce liquidity and fight inflation in the United States, currently at the highest level in four decades, even if that translates into recession. This Tuesday, the market keeps an eye on the US Consumer Price Index (CPI) for March. “We’re seeing a stampede to defensive stocks and an aversion to economically sensitive stocks,” Robert DeLucia, senior economic adviser at Empower, a pension services company, told Bloomberg. As a result, investors are turning away from assets seen as riskier, such as cryptocurrencies. In an interview with Valor, Humberto Andrade, a trading analyst at the Bitcoin Market, highlighted the “Fear & Greed” index, which dropped to 32 – below 50 the indicator signals more fear. Futures traders betting on cryptocurrency’s continued rally were surprised by BTC’s dip below $40,000 in the last 24 hours, resulting in $430 million in liquidations, according to CoinDesk, which cites data from Coinglass. Altcoins also trade lower on Tuesday as Binance Coin (-02%), XRP (-1.4%), Solana (-2.6%), Cardano (-3%), Terra (-4.4 %), Avalanche (-1.1%), Polkadot (-1.6%), Dogecoin (-2.5%) and Shiba Inu (-2.7%), according to data from CoinGecko.

Metrics

Among blockchain activity metrics such as transaction counts and active users, the recovery is still relatively weak and continues to suggest that Bitcoin is in a market dominated by long-term gamblers as far fewer new investors are joining. points analysis by Glassnode. Digital asset investment products saw outflows of $134 million in the week ended April 8, marking the second-largest withdrawal volume of the year, a CoinShares report shows, according to which the previous week’s price appreciation may have driven investors to make a profit. Bitcoin funds were the hardest hit, with outflows of $132 million in the period. Bitcoin “is still consolidating in a triangular pattern dating back to mid-January,” said Jeffrey Halley, a senior market analyst at Oanda, and noted that BTC is still within the range between $36,500 and $47,500. For Coinbase’s director of institutional research, David Duong, an explanation for the devaluation of cryptocurrencies would be the deadline for filing the US income tax in mid-April. “In the past year, we have seen market players selling digital assets to make tax-related payments,” he wrote in a recent note.

Other highlights

an important change for the Brazilian cryptocurrency market took place on April 4th. The records of the São Paulo Board of Trade (JUCESP) report that Binance Holdings joined B Fintech as a partner and that the broker’s CEO, Changpeng “CZ” Zhao, left the company as an individual, according to the Bitcoin Portal. AB Fintech is a Brazilian company that has CZ as a founding partner. The Brazilian justice had been holding the company liable in actions of the broker’s clients against Binance in Brazil. The Colombian app Rappi, which offers food deliveries and other products in Latin America, launched a pilot cryptocurrency payments program in Mexico. Rappi has partnered with crypto platforms Bitpay and Bitso to support the new service, according to Reuters. Itaú and Hashdex presented the newest format for investing in crypto assets. It is the first crypto product of the Brazilian bank. The new fund will be composed of different assets and aims to reach all types of investors, with investments starting at just R$1.00. In the US, a new Nasdaq survey revealed that 72% of financial advisors would be more likely to invest their clients’ assets in cryptocurrencies if they had access to a spot index fund. However, only 38% of respondent advisors believe the SEC is likely to approve the so-called “spot ETF” in 2022. IDEG Asset Management partnered with Coinbase Prime to launch Ethereum Enhanced Portfolio, an actively managed fund that tracks the price of Ethereum and also utilizes an arbitrage strategy to boost returns and reduce volatility, according to a statement. Mark Karpeles, former director of bitcoin operator Mt. Gox, who went bankrupt in 2014 after a BTC theft worth nearly $470 million, wants to create a risk rating agency in the cryptocurrency sector, he said at a press conference in Tokyo, according to information from Folha and AFP.

Regulation, Security and CBDCs

The Digital Real should have a pilot in the second half of this year and already has a structure on how it will be assembled. The Brazilian version of the central bank digital currency (CBDC) will be made from a stablecoin and based on the STR (Reserve Transfer System). The information was released by the president of the Central Bank, Roberto Campos Neto, in a live made by the TC platform on Monday (11). Other digitization initiatives to democratize the financial system are under analysis, said Campos Neto, who highlighted the “exponential” growth of operations in the metaverse and new forms of monetization.

Metaverse, Games and NFTs

Volkswagen do Brasil launched on Monday (11) a global platform of collectible cards in non-fungible tokens that start with the iconic versions of the Gol GT and models that mix futurism and concept cars, reported Estadão. The Bored Ape Yacht Club will debut in Hollywood with a trilogy produced by Coinbase, which tests its new media division for film production. The series also comes in line with Coinbase’s anticipated NFTs marketplace, which is set to launch “soon,” the cryptocurrency exchange’s director of culture and entertainment, William Swann, said in an interview with CoinDesk. Beeple, the digital artist who launched the global craze for NFTs among the most powerful art brokers a year ago, debuts in late April at the Castello di Rivoli Museum of Contemporary Art in Turin, according to the Wall Street Journal. Epic Games, The company responsible for the game “Fortnite”, announced the raising of US$ 2 billion in financing with ambitions to “develop the metaverse”. The round had a contribution of US$ 1 billion from both the Sony Group and the holding company Kirkbi, which controls 75% of the Lego Group and values ​​Epic at US$ 31.5 billion.

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