Bitcoin Rallies Back Toward $60K Despite Soft Economic Data and Continued Recession Fears

Welcome to our Weekly Market Update.* Explore weekly crypto price movements, read a quick digest of notable market news, and dive into a crypto topic — this week we learn more about Solana.

Takeaways

• Bitcoin's value dropped below $50,000 early this week, marking its lowest point since mid-February: But prices quickly bounced back, briefly pushing near $60,000 on Thursday, as major indices regained their footing despite fears of a US recession.
• Amid global market turbulence, US spot Bitcoin ETFs saw $168.4 million in net outflows on Monday: Grayscale’s GBTC led the withdrawals, while macroeconomic issues and crypto-specific factors intensified the market selloff.
• Crypto coalition asks for clarity on digital assets: A group of more than 50 crypto asset firms, dubbed The Crypto Market Integrity Coalition, wrote a letter to President Joe Biden and Vice President Kamala Harris asking the White House for more regulatory clarity around digital assets.
• New Ethereum wallet addresses have fallen to their lowest level this year amid the launch of spot ether ETFs: Solana, however, saw an uptick in new addresses due to its growing DEX ecosystem and interest in memecoins.
• Ripple is advancing its stablecoin strategy with the upcoming launch of Ripple USD (RLUSD): Set to debut on XRP Ledger and Ethereum, RLUSD will reportedly help advance the company’s focus on cross-border transaction innovation.

Bitcoin Drops Below the $50,000, then Pushes Back to $60,000 Amid Economic and Geopolitical Concerns

Bitcoin saw its fourth consecutive day of decline during Asian trading Monday, plummeting under $50,000 before recovering to nearly $60,000 on Thursday. The cryptocurrency's downturn is attributed to increasing geopolitical tensions in the Middle East and growing concerns about the global economy, both of which have shaken investor confidence. Many are also concerned the Federal Reserve has not been fast enough in responding to signs of a weakening US economy.

Gemini data indicates that bitcoin hit a low of $49,540 before rebounding some 8% over the past 24 hours. Meanwhile, ether fell to almost $2,000 early this week, its weakest point since early January, before pushing back to nearly $2,600 as of Thursday. The rally came after a judge approved a plan for FTX and Alameda Research to pay back some $12.7 billion to creditors as part of the defunct exchange's bankruptcy plan.

The sharp decline in cryptocurrency values was part of a broader market downturn fueled by fears of a global recession, turmoil in Japan’s market, and heightened tensions in the Middle East. The start of the week was not positive for global markets. Japan's Nikkei 225 Index tumbled by 12.4%, the Stoxx Europe 600 Index decreased by 2.8%, and S&P 500 micro futures lost 2.9%. The NASDAQ also tumbled by almost 2.5%. This panic selling reflects investor anxieties about potential economic instability and geopolitical unrest.

Solana (SOL): Scaling Crypto to the Masses

Solana (SOL) was created in 2017 with the goal of scaling censorship resistance to support an order of magnitude increase in transaction throughput, at a much lower cost compared to other blockchains like Bitcoin or Ethereum. Designed as a decentralized protocol, Solana incorporates an innovative Proof-of-History (PoH) timing mechanism that is implemented prior to, and facilitates, its Proof-of-Stake (PoS) protocol structure. The result is an ultrafast blockchain capable of processing more than 50,000 transactions per second, with the ability to scale as usage of the protocol grows without relying on Layer-2 systems or sharding.

Learn more about Solana.

Onward and Upward,

Team Gemini