High Asset

Bitcoin catches bid as risk assets gain (Cryptocurrency:BTC-USD)

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Bitcoin (BTC-USD) and other actively traded cryptocurrencies like ethereum (ETH-USD) and binance coin (BNB-USD) are rising so far Wednesday, as Russia and Ukraine reportedly advance with a tentative 15-point peace plan .

Looking at the three major U.S. stock market indices, the Dow Jones (DJI) +1.1%, S&P 500 (SP500) +1.6% and Nasdaq (COMP.IND) +2.7% are all deep in the green. On the other hand, gold (XAUUSD:CUR) -0.3%, silver (XAGUSD:CUR) -1% and other real assets drift lower. The trade weighted U.S. dollar index edges down to 98.54. Treasury yields are also extending gains, with the 10-year climbing to as high as 2.18% earlier in the session.

“Whenever we see stock market relief, crypto tends to do well, especially lately,” GlobalBlock analyst Marcus Sotiriou told Bloomberg. Overall, “the key driving force behind prices is macro, so I expect a struggle for a sustainable uptick,” he added.

Cryptos’ buying pressure also comes ahead of the Federal Reserve’s interest rate decision on Wednesday. The Federal Open Market Committee’s dot plot graph will likely signal four rate hikes this year, and three in 2023, according to economists surveyed by Bloomberg.

“We could see some short term relief in the market over the coming days/weeks as protective positions unwind after today’s highly anticipated rate hike,” Sotiriou wrote in a note. “However, I think Bitcoin and the crypto space is unlikely to gain significant traction in 2022. This is because the Federal Reserve is taking liquidity away from markets and people may have less money to spend on ‘risky’ investments due to surging inflation.”

While bitcoin (BTC-USD) remains elevated by nearly 4% in the past five sessions, the largest digital token by market cap is firmly lower by 7.5% M/M and 14.6% YTD. Not surprisingly, ethereum (ETH-USD) is also up 5% in the past week, but down 14% M/M and almost 28% YTD.

Intraday crypto price action: ripple (XRP-USD +1.3%), cardano (ADA-USD +2.6%), solana (SOL-USD +3.9%), avalanche (AVAX-USD +2.3%), dogecoin (DOGE-USD +2.4%), shiba inu (SHIB-USD +2.1%), polygon (MATIC-USD +3.3%), wrapped bitcoin (WBTC-USD +4.4%), crypto.com (CRO-USD +4.1%), cosmos (ATOM-USD +2.1%) and bitcoin cash (BCH-USD +2.4%).

On Tuesday, Elliptic flagged a digital wallet linked to sanctioned Russian officials and oligarchs.

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