Bitcoin Swings by USD 30,000; Ether gains; Litecoin, XRP fall; US stocks fall on recession worries

by James · April 12, 2023

Bitcoin fell but held above US$30,000 in Thursday morning trade in Asia that saw mixed performances among the 10 non-stablecoin cryptocurrencies. Ethereum rallied after the blockchain’s network upgrade on Wednesday, seemingly shrugging off concerns that the upgrade could lead to selling pressure on the Ether token. Solana continued to lead the gainers as investors expect first smartphone launch on Thursday. US stocks fell on Wednesday after the Federal Reserve’s March report showed officials forecast a recession in the second half of 2023, while the March US consumer price index (CPI) indicated cooling but stubborn inflation.

Bitcoin fell 0.76% to US$30,008 in the 24 hours to 09:00 in Hong Kong, but was up 7.26% for the week, according to CoinMarketCap data. The world’s largest cryptocurrency has jumped over 80% since the start of the year.

Bitcoin buyers ignored renewed criticism from US investor Warren Buffet in a CNBC interview on Wednesday, in which he called the cryptocurrency a “gambling token” with no intrinsic value.

Ethereum rose 1.10% to $1,910, adding 0.79% for the week. The Shanghai upgrade of the Ethereum blockchain was activated on Wednesday and allows investors to withdraw their stake Ether for the first time. Some analysts expect the upgrade to trigger a withdrawal of nearly $2.3 billion of Ether, roughly 6% of the total value of Ether, according to a Wednesday Bloomberg report.

Litecoin led the top 10 losers, falling 2.45% to trade at $92.23. The token is flat for the seven-day period.

XRP fell 2.06% to $0.5041 but is still up 1.08% for the week. The US Securities and Exchange Commission (SEC) filed a letter on Tuesday to support its case against Ripple Labs, which it has accused of offering unregistered securities in the form of XRP. The letter cited the SEC’s case against investment adviser Commonwealth Equity Services, which involved securities law violations and saw the defendant’s fair notice argument rejected by the court.

Solana rose 2.49% to $24.01, up 15.51% for the week. Solana Mobile, a subsidiary of Solana Labs, will release its first smartphone Saga on Thursday, which integrates the Solana blockchain and allows users to make on-chain transactions, manage digital assets and access a variety of decentralized apps.

The total crypto market capitalization fell by 0.52% in the last 24 hours to $1.23 trillion. The total trading volume in the last 24 hours rose 13.33% to 48.60 billion USD.

In the non-fungible token (NFT) market, the Forkast 500 NFT index rose 0.32% to 3,992.64 in the 24 hours to 09:00 in Hong Kong, but was still down 0.48% for the week . The index is a proxy measure of the performance of the global NFT market and includes 500 eligible smart contracts on a given day. It is managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.

US stocks closed lower on Wednesday after the minutes of the Fed’s March meeting rekindled concerns about a recession, while Buffet warned in the same CNBC interview that the US banking system could face further stress following the recent failures of a trio of lenders. The Dow Jones Industrial Average fell 0.11%, the S&P 500 fell 0.41% and the Nasdaq Composite Index fell 0.85%.

At its March 21-22 meeting, the Federal Reserve raised interest rates by 25 basis points and Fed officials estimated that the US economy could enter a “mild recession” later this year. Several Fed officials considered leaving rates unchanged, noting the bank failures, but decided against the rate hike because of “high inflation.”

US gross domestic product is expected to rise 2.9% in the second quarter of 2023, but to fall by 0.3% in the third quarter and 0.1% in the fourth, according to data from Trading Economics.

US CPI released on Wednesday rose 5% from a year earlier in March, down from 6% in February, and the smallest increase since May 2021. The figure was lower than economists’ expectations of 5.2% and pointed to a slowdown in inflation, but still well above the Fed’s target rate of around 2 percent, Reuters reported on Thursday. The core CPI – excluding food and energy – rose 5.6% from the previous year, accelerating from February.

US interest rates are currently between 4.75% to 5%, the highest since June 2006. Analysts at CME Group expect a 29.6% chance that the Fed will not raise rates at its next meeting on May 3, while 70.4 % predict a 25 basis point rate hike, up from 66.9% on Wednesday.

U.S. stock futures traded flat to lower at 9 a.m. in Hong Kong. The Dow Jones Industrial Average fell 0.12 percent. S&P 500 futures fell 0.10 percent. The Nasdaq Composite Index was down 0.02%.