Currency
- While bitcoin and ethereum dominate the headlines, there are more than 17,000 crypto coins.
- With less liquidity and more volatility, these alternative cryptocurrencies can deliver investors massive losses or gains in a short period of time.
- These were the five worst performing cryptocurrencies over the past week, according to data from CoinMarketCap.
Bitcoin’s bear market has sucked the life out of many popular cryptocurrencies, with the total crypto market capitalization falling from $3 trillion to less than $2 trillion today. But less liquid altcoins have seen an even steeper decline.
With more than 17,000 cryptocurrencies in existence and counting, there are more than triple the number of crypto coins than there are US exchange-listed stocks. That massive amount of supply makes it nearly impossible to keep track of all the big movers in the crypto sector outside of well known coins like bitcoin, ether, and dogecoin.
The surge in new crypto coins came amid a massive bull market for the sector in 2021, but a more than 40% decline in bitcoin from its November high is challenging the space, especially in smaller coins that saw extraordinary gains last year like solana, cardano, and polkadot…read more.
- Cryptocurrencies sank Monday, helping drag the total market’s value down by $400 billion in the last week.
- Bitcoin and ethereum both hit lows not seen since July as cryptos tracked the slump in stocks.
- Altcoins are suffering even more, with solana down 40% in the last seven days after another outage.
Cryptocurrency prices slid Monday, after $350 billion was wiped off the value of the total market at the weekend, as the prospect of an aggressive Federal Reserve kept jitters alive.
Leading digital currency Bitcoin fell almost 6% in the last 24 hours to $33,561, more than 50% down from its November record high of $68,790, according to CoinMarketCap data. Ethereum suffered heavier losses of more than 10%, dropping to $2,219.
Over the weekend, the overall cryptocurrency market shed $350 billion in value, bringing its decline over the last seven days to $400 billion. It is now worth around $1.60 trillion, after peaking at close to $3 trillion in mid-November, according to CoinMarketCap.
Cryptocurrencies suffered big declines last week as they followed stock markets lower, buffeted by concerns about the prospect of a series of interest-rate hikes by the Federal Reserve this year. Bitcoin and ethereum dropped 22% and 32% respectively over the last seven days.
Higher rates tend to weigh on more speculative assets, as investors are more likely to put their cash into areas of the market that they perceive to be less risky…read more.
The first-ever ETF linked to the world’s largest cryptocurrency debuted Tuesday. It became the second-most heavily traded fund on record.
Then Wednesday, Bitcoin hit an all-time high, topping $66,000. Its price shot up so fast that at one point, its value increased more than a thousand dollars in a minute.
After almost a decade of wrangling with regulators, the ETF industry has finally gotten a fund that tracks the price of Bitcoin. But at this point, it may be easier and cheaper for the average investor to just buy Bitcoin.
The ProShares Bitcoin Strategy ETF — ticker BITO — began trading Tuesday in a landmark moment for the $6.8 trillion ETF industry. In the first hour and a half of trading alone, more than $400 million worth of shares changed hands.
Since 2013, when crypto investors Cameron and Tyler Winklevoss first submitted a proposal to create a Bitcoin ETF fund, various issuers have tried to get permission for one. At the time, buying Bitcoin was complicated and somewhat technical, requiring a whole new vocabulary to learn and digital encryption keys to keep track of, and the risk of losing it all by accident.
That ignited a flurry of new applications, including one co-branded with Cathie Wood’s Ark Investment Management. Although ProShares is the first to be approved, many more are coming soon, such as one from Valkyrie Investments Inc. which plans to launch Wednesday under the ticker BTFD.
Meanwhile, the Grayscale Investments LLC is filing to convert its $40 billion Grayscale Bitcoin Trust (ticker GBTC) into an ETF — this one physically holding Bitcoin.
Bitcoin and Bitcoin futures may sound almost identical, but there are key differences. Futures track Bitcoin’s spot price indirectly through the use of contracts overseen by the Chicago Mercantile Exchange. They also require investors to put down cash to trade, as a form of collateral. Traders often use futures to bet on price movements, such as shorting the price of Bitcoin or to hedge other bets.
Still, the prices of Bitcoin and its futures tend to trade in line. As of 10 a.m. Tuesday, Bitcoin traded around $62,550, compared with Bitcoin futures at $63,610.
Whether you’re new to crypto or a tried-and-true investor, it’s hard not to be intrigued by such a buzzy new product. Here’s what to know if you’re considering making a purchase:
What’s the case for buying?
- More than 13 million shares changed hands in early trading
- ETF’s value fluctuates after debuting at $40 inception price
The first Bitcoin-linked exchange-traded fund in the U.S., the ProShares Bitcoin Strategy ETF, saw strong investor demand during its trading debut, marking a watershed moment for the crypto industry.
The fund — trading under the ticker BITO — rose as much as 5.4% to $42.15 before paring gains and turning negative at one point. Still, more than 12 million shares worth roughly $480 million changed hands, according to data compiled by Bloomberg. While comparisons are difficult because some funds are pre-funded, that volume makes it easily one of the busiest ETF debuts ever seen. Because of the way the fund settles trades, net flows into or out of the product probably won’t be known until overnight on Wednesday.
A Bitcoin ETF has been long-awaited by both the crypto community and investors on Wall Street, many of whom have argued for years that approval by regulators would open up digital currencies to more mainstream investors. The ProShares fund is based on futures contracts and was filed under mutual fund rules that SEC Chairman Gary Gensler has said provide “significant investor protections.”
“We are really excited to bring BITO, the first Bitcoin-linked ETF, to investors as an important opportunity for them conveniently to invest in Bitcoin in their regular brokerage account,” Simeon Hyman, global investment strategist at ProShares, said on Bloomberg TV. “This is going to allow many people who have been waiting for an easy way to do this and a robust way to do this to now be involved and have it in their portfolios.”
Retail investors rushed to buy the ETF Tuesday morning. BITO was the most bought asset on Fidelity’s platform with more than 5,500 buy orders coming from customers as of 11 a.m. New York time.
Bitcoin gained as much as 3.1% to trade around $63,274, slightly below its April record high of just under $65,000.
“It’s an incredibly bullish week — there’s been really positive sentiment around the ETF in particular,” said Sam Bankman-Fried, chief executive officer FTX, one of the largest crypto exchanges.
Most financial professionals expect digital assets will replace government-issued currencies within a decade, or at least present a solid alternative to them, a Deloitte survey has found.
Given that, financial services companies must get on board with cryptocurrencies, digital assets and blockchain, or risk losing ground to rivals as crypto shakes up the industry, the respondents said.
Among them, 76% said they believe that digital assets would be a strong alternative or replace fiat in the next five to 10 years, according to Deloitte’s blockchain survey report published last week…read more.
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