Will bitcoin continue to outperform stocks for the rest of the year? – CNET

Hello, welcome to Distributed Ledger, our weekly crypto newsletter that hits your inbox every Thursday. I’m Frances Yue, a crypto reporter at CNET. I’m going to introduce you to the newest and greatest in the world of digital assets this week.

Find me on Twitter at @FrancesYue_ to send feedback, or tell us what you think we should cover. You can also reach me via email to share your personal stories with crypto.

Crypto at a Glance

BitcoinBTC USD,
+1.12%
fell around 7.2% in the past seven days and was trading at around $19,158 on Thursday, according to data from CoinDesk. Ether ETHUSD,
-0.96%
lost 8.5% over the seven-day period to reach around $1,275. Dogecoin DOGEUSD Meme Token,
-0.68%
was trading down 11.4% while another dog-themed token, Shiba Inu SHIBUSD,
2.94,
was down 13.7% from seven days ago.

Cryptographic metrics
The biggest winners Price

%return in 7 days

Houbi

$7.18

74%

TerraClassicUSD

$0.05

66%

Amount

$158.57

14.7%

Maker

$943.57

12.3%

Tokenize Xchange

$11.64

10.6%

Source: CoinGecko as of October 13

The biggest declines Price %return in 7 days

Celsius Network

$1.02

-24.8%

EthereumPoW

$7.32

-20.4%

Klaytn

$0.15

-19.8%

Helium

$4.58

-19.6%

Lido CAD

$1.23

-19.5%

Source: CoinGecko as of October 13

Persistent inflation

The US consumer price index rose 0.4% in September. Economists polled by The Wall Street Journal were forecasting a 0.3% increase. The annual inflation rate fell from 8.3% to 8.2%.

The warmer than expected CPI data reinforced the view that the Federal Reserve will continue to aggressively raise interest rates to curb inflation. After the data was released on Thursday morning, traders estimated a 97.8% chance that the Federal Reserve would raise its benchmark rate by 75 basis points to a range of 3.75% to 4% at its meeting in early November. , according to the CME tool FedWatch. . The probability was up from 84.5% on Wednesday.

Bitcoin initially fell 3% to around $18,198 after the CPI data, before later bouncing back to around $19,158.

Bitcoin’s outperformance versus stocks

Mark Connors, head of research at 3iQ Digital Asset Management, said he expects stock prices to fall sharply and bitcoin’s price “to hold much closer to current levels” in the coming months. come.

Connors expects stocks to continue falling as the stock market lags the bond market. Earlier Thursday, the 10-year Treasury yield rose above 4%. the highest level since 2010.

Read: Stocks won’t bottom until Fed nears end of rate hike cycle, volatility expert says

On the other hand, with growing institutional adoption and after the June low took away “weaker hands,” bitcoin may be in a better position, according to Connors.

More than 69% of bitcoins have been held for more than a year, Connors noted. “That means mostly strong hands, all the tourists are gone,” Connors said.

In the third quarter, bitcoin outperformed major US equity indices, although the correlation between the two assets remained high. The 63-day correlation between bitcoin and the Nasdaq recently neared its peak at 67%, Connors noted. A correlation of 1.0 means that an asset pair is moving in perfect sync, while a correlation of zero means that there is no relationship between the price movements.

Still, bitcoin was up 4% from July to September, according to data from CoinDesk. In contrast, the Dow Jones Industrial Average fell 7% over the same period, according to Dow Jones Market Data. The S&P 500 lost 5% in the third quarter and the Nasdaq Composite fell 4%.

“You had correlation not to mention returns,” Connors noted. This may in part be due to bitcoin’s positively skewed return distribution, where investors can face frequent small losses and a few large gains. The linear correlation calculation may have failed to capture this return character, according to Connors.

BNY Mellon Launches Crypto Custody Service

Bank of New York Mellon, the world’s largest custodian bank, said it will begin storing customers’ crypto assets from Tuesday, despite the digital asset price chaos.

The service allows select customers to hold and transfer bitcoin and ether through BNY Mellon, the lender said in a statement Tuesday. This addition makes BNY Mellon the largest US bank to offer custody of crypto and traditional assets.

Although bitcoin has lost nearly 60% of its value since the start of the year, “we continue to see significant demand from institutional investors and are excited about the future opportunities in blockchain and technology. tokenization for assets and cash,” Caroline Butler, managing director of custody services at BNY Mellon, wrote to CNET in an email.

The move could boost institutional adoption of digital assets, as BNY Mellon, with $43 trillion in assets in custody as of June, has existing relationships with many financial heavyweights. I wrote more about it here.

Google partners with Coinbase

Google said on Tuesday that it has partnered with Coinbase to begin allowing certain users to pay for its cloud services using certain cryptocurrencies, according to a statement. The service will roll out in early 2023, CNBC reported.

Meanwhile, Coinbase will build its global data platform on Google Cloud and use Google Cloud’s compute platform to process blockchain data at scale, according to the statement.

The SEC probes the creator of NFT

The U.S. Securities and Exchange Commission is investigating Yuga Labs Inc., creator of the Bored Ape Yacht Club non-fungible tokens, or NFTs, over whether its sales of digital assets violated security laws, Bloomberg reported Tuesday. .

The regulator is reviewing whether certain Yuga Labs NFTs issued are securities and must follow corresponding disclosure rules, according to the Bloomberg article citing a person familiar with the matter. Learn more here.

Crypto companies, funds

Shares of Coinbase Global Inc.. PIECE OF MONEY,
-0.86%
fell 1% to $69.24 on Thursday and is down 5.9% over the past five trading sessions. by Michael Saylor MicroStrategy Inc.
MSTR,
+0.96%
the shares gained 1.9% on Thursday to $222.46, while they are down 8% in the past five days.

mining company Blockchain Riot Inc. RIOT,
+4.32%
shares were up 4.2% at $6.40 on Thursday, and they are down 10.7% over the past five days. Shares of Marathon Digital Holdings Inc.
MARA,
+7.92%
rose 6.9% to $11.14, while it was down 18% in the last five days. Another miner Ebang International Holdings Inc.. EBON,
-1.61%
slipped 1.8% to $0.37 on Thursday, after falling 6.7% over the past five days.

Overstock.com Inc.
OSTK,
-0.30%it is
shares rose 0.6% to $26.53. The shares traded up 0.6% in the five-day period.

Shares of Block Inc.
SQ,
+0.23%,
formerly known as Square, added 0.4% to $56.37 and was up 9% for the week. Tesla Inc.. TSLA,
+2.20%
shares rose 1.9% to 221.37, down 7.2% in the past five days.

PayPal Holdings Inc.
PYPL,
+0.48%
edged up 0.7% to $84.37, with a loss of 10.7% over the five-session period. Nvidia Corp.
NVDA,
+4.23%
the shares rose 4% to $119.60, with an 8.6% loss last week.

Advanced Micro Devices Inc.
AMD,
+2.16%
shares rose 2.4% to $59.26 on Thursday, down 12.7% from five trading days ago.

Among crypto funds, ProShares Bitcoin Strategy ETF
LITTLE,
+1.49%
were up 1.6% at $11.96 on Thursday, while its Bitcoin Short Strategy ETF
BE,
-1.42%
slipped 1.6% to $38.23. Valkyrie Bitcoin Strategy ETF
BESIDES,
+1.22%
climbed from 1.7 to $7.49, while VanEck Bitcoin Strategy ETF
XBTF,
+1.28%
rose 1.4% to $18.95.

Grayscale Bitcoin Trust
GBTC,
+0.76%
gained 1.5% to $11.38.

Required readings



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Will bitcoin continue to outperform stocks for the rest of the year? – CNET


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