“The market clearly remains in a state of fear, caused by the de-pegging of [collapsed stablecoin] UST, as well as fear spillover from the broader financial markets,” Sam Kopelman, the U.K. manager of bitcoin and crypto exchange Luno, said via email.
On Wednesday, all major U.S. markets fell sharply, with the S&P closing down 4%, its largest fall since June 2020, and the tech-heavy Nasdaq losing 4.7%. In recent weeks, crypto market watchers have highlighted bitcoin’s close proximity to the stock market, with the Federal Reserve interest rate hikes and balance sheet trimming squeezing investors across the board.
“Current fear in crypto markets is pushing capital that was previously invested in altcoins into bitcoin—a mark of the coin’s relative strength in comparison to others,” Kopelman added.
Ethereum, its biggest rivals solana, cardano, avalanche, and polkadot, as well as the meme-based dogecoin and Ripple’s XRP, have all declined at a faster pace than bitcoin in recent weeks.