There was no apparent, clear explanation for the Monetary Authority of Singapore’s decision to place crypto fund DeFiance Capital on an “Investor Alert List;” bitcoin and major cryptos surge
Bitcoin leaped past $43,000 before retrenching well under this mark, but was still recently up nearly 4% over the previous 24 hours. Ether soared past $3,000 for the first time in two weeks, a more than 3% gain, and most other major altcoins in the CoinDesk top 20 by market capitalization were well into the green.
Bitcoin was changing hands at about $42,700. Cardano’s ADA and Polkadot’s DOT rose over 7% at certain points. Axie Infinity token AXS and shiba inu (SHIB) were up over 5% and 3%, respectively.
CoinDesk’s Market Wrap on Tuesday noted that some analysts have approached the spike in prices with caution because of uncertainty about the appetite for risk.
In an interview with CoinDesk TV’s “First Mover” program, Mark Chandler, managing director and chief market strategist for capital markets trading firm Bannockburn Global Forex, said that more hawkish monetary policy could hurt crypto in the long term. “Crypto is acting more like a risk asset than an inflation protection,” he said.
But in the short term, Chandler attributed crypto’s rise the past few days to improvement in equity markets, particularly the Nasdaq. “That is a kind of rally that risk assets like and that’s why crypto is primarily rallying,” Chandler said.
The tech-focused Nasdaq jumped nearly 2% on Tuesday, while the S&P 500 rose 1.1%
Chandler said ether had been outperforming bitcoin because investors have been intrigued by a number of projects that promise “to increase the efficiency and reduce its carbon footprint. That might be attracting some money and help explain why ether is doing better than bitcoin.”
But he said he was also concerned the U.S. central bank would not be able “to engineer a soft landing” that brings down inflation without recession. The Federal Reserve increased interest rates 25 basis points last week as was widely expected to combat rising inflation, and on Monday, Fed Chair Jerome Powell suggested in a speech that future increases this year could come in 50-basis point increments.
Chandler noted the Fed had “revised growth down, inflation higher, interest rates higher” but not unemployment. “Many people are going to be surprised that we do not get a rise in unemployment.”