BTC and ETH outperform traditional markets in July despite the dollar's strength
Top cryptos, including BTC and ETH, remain in red while the market cap stands at $980 billion
By Shashank Bhardwaj
Bitcoin (BTC) fell by 3 percent and was trading close to $22,000, given the uncertainty around the upcoming US Federal Reserve’s monetary policy meeting and corporate earnings report. It is expected that the Fed might possibly impose another 0.75 percent hike in interest rates to curb the rising inflation.
However, this fluctuation is not reflective of the entire month since BTC has been outperforming traditional markets all through the month of July. The dollar index supported the fact that the strength of a dollar was up 2.5 percent, but the top cryptos have managed to transcend the dollar in the performance game.
BTC recorded inflows of $19 million in the past week while ETH witnessed inflows worth $8 million, with total inflows for digital asset funds being $294 million in July so far. “These inflows imply a turning point in sentiment after a recent 11-week run of outflows,” said James Butterfill, head of research at CoinShares. He also said that The Merge, Ethereum’s much-awaited software upgrade from a proof-of-work to a proof-of-stake system which is set to launch in September, could also be responsible for raising investor confidence.
Laurent Kssis, head of Europe at Hashdex, the crypto asset management firm, has also attributed the rise in ETH performance this week to the Ethereum Community Conference in Paris last week. He said, “Clearly, ETH has outperformed due to EthCC in Paris last week, but I wonder if it has now run out of steam since we tested $1,600.”
However, he also added, “A bearish stance is not to be dismissed for the next two weeks as the crypto market is still not out of the woods, but last week's rally has offered optimism to many retail investors.”
Furthermore, the US dollar’s performance could also improve this week if the Federal Reserve does not allow the ‘inflation has peaked’ story much traction in its meeting. It would force markets to reprice and continue the practice of monetary tightening for the rest of the year.
Other top cryptos also remained in the red with minor dips at the time of writing.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash