CRYPTO MOVERS AND PRICES
Crypto was broadly up this morning with alt-coins, notably Ripple (XRP), outperforming. Spot volumes are about 1.7x the 30-day average.
Crypto Story of the Day
After BTC achieved a record high of roughly USD 64,500 on April 14, the asset, along with the broader crypto market, saw an aggressive sell-off. The move was preceded by alt-coin outperformance that added an estimated USD 373 billion to crypto market cap ex-BTC in the past 3 weeks.
The last several weeks have seen a number of alt-coins achieve all-time highs. Ethereum (ETH) reached a record high of about USD 2,600 on Friday, despite significant technical issues that the Ethereum network saw on April 15 in relation to the network’s Berlin upgrade. Binance Coin (BNB) also achieved a record-high market cap on April 13 of USD 92 billion after adding USD 45 billion to its capitalization since the beginning of the month.
XRP reached a market cap of approximately 88 billion, its highest since January 2018. Those levels are notably more than 2x those seen prior to Ripple being charged with an SEC securities violation in December.
The most dramatic performance among Top 10 alts was that of Dogecoin (DOGE), which achieved a record high market cap of about USD 53 billion after seeing an addition of USD 47 billion to its valuation since the start of April. Amid the activity, BTC dominance fell to 51%, a low last seen in August 2018.
BTC’s thesis continues to see mainstream adoption. On the other hand, the outperformance— largely divorced from any fundamental justification— of alt-coins, NFTs, and DeFi-associated coins presents a systemic risk for the crypto space. This is most pronounced with DOGE, which has arguably been driven to manipulated valuations on the basis of its virality and social media popularity.
In addition, ETH rallied to record highs on a day when its network suffered major technical issues due to an upgrade, with years of upgrades ahead. BTC dominance had previously dipped below 50% in December 2017 ahead of a broad BTC and alt-coin sell-off.
We view lows in BTC dominance as indicative of frenzied and speculative market sentiment in non-BTC markets, and the situation does leave the broader market vulnerable in some contexts.