Investors continued to buy risky assets on Wednesday, including growth stocks, tech stocks and cryptocurrencies, following the rapid movement on Tuesday. And it’s no surprise that they are standing up all at once today as highly correlated assets.
The cryptographic movement is primarily due to the macroeconomic news more than anything about the cryptographic itself. Bitcoin (Cryptography: BTC) Ethereum has risen 2.9% since the stock market closed yesterday (Encryption: ETH) 5.1% increase, Dogecoin (Cryptography: Doge) It’s an increase of 6.2%.
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Today’s speculation is that tariffs on imports from China will fall in a short period of time after Treasury Secretary Scott Bescent said he hopes to be “excluded” in the trade war with China “in the very near future.”
It was the trade war that sparked concerns that the US would fall into a recession, which caused a decline in Bitcoin and the overall market. However, some of these concerns have been eased today, at least according to market movements.
If the trade war actually eases and the economy recovers later this year, it could be a good thing for markets that include cryptocurrency. But considering everything that’s happened over the past month, it remains uncertain.
What’s noteworthy about Bitcoin’s movement today is that it correlates with growth and tech stocks, not a hedge against them. In contrast, gold fell 3.3% today, with the market crashing late last week and earlier this week.
Bitcoin itself appears to be a valuable repository of inflation hedges, market hedges, or unstable markets. It behaves like a risky asset, and that’s how investors should expect it to trade.
Bitcoin has become a clear risk asset, but Ethereum and Dogecoin have more questions around them as the market determines where crypto assets are moving forward in the long term. Ethereum has not made a significant margin of Bitcoin despite the increasing utility of the blockchain built over the last few years. That’s because Ethereum hasn’t improved its speed or transaction costs as a blockchain like Solana. (Cryptography: Sol) It takes market share for speed and low cost.
Dogecoin was the first meme coin, but buying memes is only fun when the market is up. Dogecoin has exceeded 50% since the post-election high, far below the 2021 high at the peak of the market frenzy. Dogecoins continue to exchange like risky assets, but it is difficult to see their foundations improve without the actual use cases of tokens.
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