On Tuesday, stocks dropped while bitcoin continued to hold steady, demonstrating its resilience amidst ongoing regulatory issues and macroeconomic uncertainties. The world’s largest cryptocurrency by market cap was trading near $27,200, up 1.1% over the past 24 hours, and topped $27,400 shortly before European equity markets opened.
BTC has remained range-bound between $26,500 and $27,500 for nearly two weeks, causing some investors to worry about liquidity as regulatory issues continue to weigh on the markets. “The global macro picture remains uncertain, although more positive, with inflation falling in the US and potentially in the UK and EU in the coming months. Right now, though there’s not much shaking,” said Tim Frost, CEO of digital wealth platform Yield App.
Despite concerns about cryptocurrency markets stagnating, the current capitalization of about $1.3 trillion has remained nearly the same as it was a year ago. Some investors remain committed to the asset, as the percentage of bitcoin’s total supply has remained unmoved for over a year, reaching a new record of 62.13%.
On Monday, crypto markets received a boost when a leaked document from the European Commission showed a willingness to moderate their tough stance on crypto and make it easier for commercial lenders to hold stablecoins and tokenized assets. The news was a small bright spot in an otherwise uncertain market.
Meanwhile, stocks fell amid debt limit anxieties, with the technology-focused Nasdaq Composite closing down 1.2% after reaching a 2023 high and the S&P 500 and Dow Jones Industrial Average declining 1.1% and 0.6%, respectively. Yields on 2- and 10-year Treasuries both reached near their highest levels since March before ticking downwards slightly.
Despite the recent market tumult, the correlation between bitcoin and traditional assets has been dropping since April to -0.23. “As some macro catalysts come to a head, like the debt ceiling debate or Fed rate policy, it will be interesting to watch how much bitcoin has decoupled from the broader market,” noted Strahinja Savic, head of data & analytics at Canada-based FRNT Financial.
Overall, the crypto market remains in a state of uncertainty as investors watch and wait for further developments. However, the resilience of bitcoin and a recent European Commission document suggest that there may be hope for the market yet.