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Tuesday, April 16, 2024
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Bitcoin’s retreat endangers crypto’s 2023 lead over stocks

Crypto’s significant lead over stocks in 2023 is waning as Bitcoin retreats below $30,000. The year-to-date climb for the top 100 digital tokens has cooled to 46%, closely trailing the 41% jump in the Nasdaq 100 Index.

A chart illustrating Nasdaq 100 Index briefly surpassing the MVIS CryptoCompare Digital Assets 100 Index in June.
In June, there was a brief moment when the Nasdaq 100 Index surpassed the MVIS CryptoCompare Digital Assets 100 Index, as shown on the chart.

The excitement driven by artificial intelligence products boosted the tech stocks index, briefly surpassing the MVIS CryptoCompare Digital Assets 100 Index in June.

Previously, digital assets received a boost from a court setback to a US regulatory crackdown and hopes for spot Bitcoin exchange-traded funds. However, these drivers have subsided, and investors are now closely observing the potential impact of the Federal Reserve’s expected interest-rate hike.

Chart patterns indicate caution, with Bitcoin’s 20-week Bollinger bandwidth reaching its narrowest level in seven years, suggesting increased intensity in potential movements, particularly on the downside if key thresholds are breached.

Despite the retreat, some experts believe that downside risk for cryptocurrencies should be limited as the Federal Reserve nears the end of its current rate-hiking cycle, providing support for risk assets, including crypto.

As of the latest update, Bitcoin fell 3.3% and hovered around $29,100 in London on Tuesday, while other smaller coins like XRP and Dogecoin showed mixed performance. Meanwhile, Worldcoin, the token of the crypto project co-founded by OpenAI CEO Sam Altman, experienced a moderated rally after its launch, with fluctuations observed in its price.

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