The cryptography market continued to pass out this week after a collapse of values last weekend. It all started with prices announced last Saturday, which seems a year ago at this stage. The stock market has recovered some of its losses, but the cryptography market cannot say the same.
According to data provided by S&P Global Market Intelligence, Ethereum (Eth -0.63%)) fell 19.8% of the fence last Friday, Solara (GROUND -0.34%)) is down 14.7%, Cardano (Ada -4.11%)) is down 24.2%, and Xrp (XRP -1.20%)) is down 19.2%.
Prices and fear of the market
Sunday evening, the market realized that the prices that President Trump had announced one day earlier could actually come into force this week. China, Mexico and Canada were the initial targets, and rhetoric warmed up on Sunday evening, so while the stock market was sleeping, the cryptographic market was highlighted, highlighted by Ethereum 20% in one hour.
But in the middle of the morning on Monday, the prices of Canada and Mexico had been pushed for the moment. Stocks have rallied, but cryptographic markets remained relatively silent in response.
A change of melody
Ethereum was recently one of the great aberrant values after being the hottest blockchain in the last cycle. But the new launches, like the pieces even, were on Solana, and the innovations in finance move towards faster and cheaper channels like Solana and XRP.
This idea that the blockchains of public services are favorable to a momentum at the end of the week when Caroline Pham, acting president of the Commodity Futures Trading Commission, said that she was planning a forum of digital assets with the leaders of Ripple (XRP), Circle (USDC), JammingAnd others to discuss the use of stablecoins as guaranteed for transactions and potentially to the tokenization of certain transactions.
This is the kind of innovation that industry wants to see, but the means of exchange, the stabbed, could mean less value accumulates to the underlying blockchain chips. It has always been a risk for the value of the tokens themselves.
Market declining optimism
Since the beginning of November, the market has pushed higher cryptocurrencies in the hope that regulatory clarity and a booming economy increase higher values. But a few things have achieved growth actions and crypto at the same time this week.
First, investors question the return on investment for some of the largest technological companies in the world and whether or not they will keep industry grow indefinitely. There have been weak advice from technological actions, and this caused some “risk” trade.
Second, economic data was not particularly optimistic. In January, 143,000 jobs were added, below 170,000 economists expected. And although there is a growing economy, there are also signs that growth may not be as strong as expected.
Finally, President Trump has brought a new level of uncertainty on the market, including around prices. Investors fear that prices will be negative for the economy; Inflation and any type of uncertainty will lead to a drop in high-risk assets, such as cryptocurrencies.
I am not surprised to see a drop this week, and if the data is getting worse, the decline could continue despite more use cases and more innovation than ever on the blockchain.
Travis Hoium has positions in Ethereum and Solana. The Motley Fool has positions and recommends Cardano, Ethereum, Solana and XRP. The Motley Fool has a policy of disclosure.
