Bitcoin down 77 per cent in the past month; alt-coins follow
Bitcoin’s (BTC) price has dropped 77 per cent over the past 30-days as the market responds to sharp falls in the global financial markets.
Alt-coins (digital assets launched after BTC) XRP and Ethereum (ETH) have followed suit, with 103 per cent and 113 per cent drops respectively.
For example, the price drop on March 12 was tied to global financial markets reacting to the US 30-day travel ban to and from the European Union.
Prior to the drop, BTC, ETH and XRP had been trading at their highest value in seven months.
Volume
BTC Markets data shows that the volume of all three major coins has been at their peak since late Autumn 2019.
Last week saw trading volumes of 4,000 BTC and 37,600 ETH. XRP has experienced a significant increase since the start of 2020.
Last week 114.25 million XRP were traded on BTC Markets — their third highest weekly volume on the exchange.
Digital asset markets have shown resilience after the US Federal Reserve announced interest rates of 0 per cent. This announcement triggered the S&P ASX Small Ordinaries (XSO) to sink further downwards. Since mid-February, the XSO has moved down 982.6 points.
Conventionally, digital asset prices move independently of stocks, bonds or commodities. During the past few weeks, we have seen — for the first time — a stronger correlation between the trends of digital assets and traditional financial markets.
Since February 24, the XSO index has dropped over 31 per cent. During the last week of February, the index moved from 3068.7 to 2728.2 points, one of the largest weekly drops since the 2008 financial crisis.
Digital assets have correlated price movements, especially in bear markets. When BTC falls in price, most major coins will move down with it. However, during bull markets the correlated price movement decreases.
BTC, ETH and XRP are the three largest digital assets by market capitalisation.
BTC is the better-known form of digital currency which runs over a decentralised network.
Ethereum with its native token ETH is a similar distributed computing ledger. It differs to BTC by being a platform for anyone to build applications that run over Ethereum network.
Ripple uses blockchain technology to operate a cross-border payment system. Their XRP token is used as a liquidity source by exchanges around the world to send funds in a matter of seconds.
Collectively, BTC, ETH and XRP account for approximately 78 per cent of the total digital asset market cap. BTC alone accounts for 60 per cent. For this reason, the industry regularly references these coins.
Source: STOCKHEAD
