Bitcoin Rally Triggers Woeful Performance Of Crypto Assets
July was an unforgettable experience for Bitcoin. The flagship digital token has an impressive performance against other significant crypto assets. Most tickets have more than doubled their value as the market reverses the correction of the past few weeks.
Furthermore, BTC spiked by more than a quarter during the market rally after attaining the $24,000 price. For its part, Ethereum surged by 55% as it reached a trading price of $1,700.
Meanwhile, the first week of July saw BTC’s price increase, pushing every cryptocurrency’s price significantly higher. According to Arcane research, the new price action led to a rise in Bitcoin mining stocks.
Crypto Miners See an Increase in Revenue
Crypto miners were not left out of the price surge as they leveraged the increase in BTC value. As a result, their revenue and profits shot up. However, miners seem to have chosen another way to maximize profits.
Instead of converting their BTC proceeds into cash, they decided to retain a sizable amount of the mined coins. This may pose a problem when there is a price downtrend in Bitcoin. If the price of cryptocurrencies increases, it will double the miner’s stock value.
Research published by the International Monetary Fund (IMF) indicates a correlation coefficient between crypto assets and equities. This implies that both stocks have limited diversification benefits. It would also increase the dangers of market volatility.
How Bitcoin Affects Crypto Market Performance
The largest crypto coin’s performance multiplies other tokens’ behavior. A cursory look at Bitcoin’s performance will show that a price increase also increased the value of other tokens.
Likewise, a decline in Bitcoin’s price will affect the value of other altcoins. Any fractional price action on Bitcoin has an opposite reaction.
Meanwhile, since the start of 2022, the price of Bitcoin has declined by more than half. It is only natural that other crypto assets also experienced a dismal market performance.
The perfect example of Bitcoin’s woeful outing is MicroStrategy’s (MSTR) BTC stock. The MSTR plunged 38%, while the crypto mining company Marathon Digital shed 55%.
However, both equities have had a dramatic comeback over the last 30 days. The crypto market is impressive, showing the jump in prices of both stocks.
No substantial evidence points to MicroStrategy and Marathon’s strategic moves to jack up prices. The spike drives both firms’ prices up by the value of BTC.
When it comes to investor confidence in the crypto market, Bitcoin has the final say. Experienced investors and traders continuously monitor Bitcoin before buying or selling digital assets.
The macroeconomic landscape will determine the crypto market’s future direction, but Bitcoin still has a role. As much as Bitcoin is involved, other digital currencies’ performance hinges on the ups and downs of the flagship token.
Investors would observe the market with bated breath as another interest rate hike was on the horizon. The Fed may increase the rate amid biting inflation and the high cost of goods and services.
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