Bitcoin
and other cryptocurrencies were unchanged or mildly higher on Wednesday despite turbulence in wider markets, with a selloff Tuesday on Wall Street. It could be another sign that Bitcoin is boring—or signal pain headed for cryptos.
The price of Bitcoin has risen less than 0.5% over the past 24 hours to around $26,350. The largest digital asset remains comfortably in a zone around $26,000 that has dominated for more than a month, disturbed only rarely by short-term spikes or slumps that have quickly been reversed.
“Despite the storm in the equity markets, the crypto market remains subdued,” said Alex Kuptsikevich, an analyst at broker FxPro.
Indeed, while the
Dow Jones Industrial Average
tumbled 1.1% on Tuesday and the
S&P 500
retreated 1.5%—both indexes were set to pare losses on Wednesday—digital assets have shown little such excitement. It may be a sign that Bitcoin remains firmly in its historic slump, with volatility and trading volumes seeing multi-year or even record lows, depending on metrics, in recent months amid a lack of investor interest.
“Bitcoin is in the period with the lowest volatility in the history of the asset. The crypto market is clearly in a quagmire,” said Kuptsikevich.
On the other hand, the weakness in stocks could be an ill omen for Bitcoin. “The crypto market did not suddenly become a safe haven,” said Kuptsikevich.
The stock selloff Tuesday came amid macroeconomic pressures that should be relevant to digital assets. Investors are worried that interest rates will stay higher for longer than once thought, a trend that would add more pressure to stocks and cryptos, which have seen significant declines since last year as the Federal Reserve ramped up borrowing costs. Higher rates are a headwind because when risk-free cash or U.S. Treasuries have attractive returns there are fewer incentives to pile into riskier bets like Bitcoin.
There are signs, too, that crypto traders are growing more fearful. The Crypto Fear and Greed Index fell to 44 on Wednesday, deeper into “fear” territory below 50 and down from 46 on Tuesday and 47 last week.
Beyond Bitcoin,
Ether
—the second-largest crypto—was up less than 1% at $1,600. Smaller tokens or altcoins were weaker, with
Cardano
down 1% and
Polygon
slipping 2%. Memecoins were more muted, with
Dogecoin
gaining less than 1% and
Shiba Inu
shedding less than 1%.
Write to Jack Denton at [email protected]
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