Bitcoin, Crypto, and Stocks Dip While USD Rips as Money Flows into the Private Market
September is turning out to be a historically accurate month so far.
More than half of the month is gone, and Bitcoin's price hasn’t done anything but either drop or trade sideways.
After starting the month above $47,000, the price of bitcoin went on to hit $53,000 before the first week of September was over. But from there, we only dropped lower to as low as $42,000 before even Sept. 8 was here.
Since then, not much has occurred with Bitcoin, keeping between $43k and $49k.
As we reported earlier this month, September has historically seen an average return of negative 7.8%. And currently, Bitcoin is about 4.2% down from where it started the month and Ether about 7.3%.
While the majority of the cryptocurrencies are down, some altcoins did outperform in the first half of the month, such as Solana, Avalanche, and Cosmos. SOL 1.88% Solana / USD SOLUSD $ 23.75
$0.451.88% Volume 663.88 m Change $0.45 Open $23.75 Circulating 373.41 m Market Cap 8.87 b 1 y Coinbase Predicts Substantial Growth of Newer L1 Chains & Institutionalization of Regulated DeFi 1 y Bitcoin and Ether Dump More Going Into Year-End, ETH Killers Showing Great Momentum 1 y Bitcoin and Ether Breaks Trend With Outflows While Altcoins Continue to See Inflows AVAX 2.01% Avalanche / USD AVAXUSD $ 20.57
$0.412.01% Volume 330.51 m Change $0.41 Open $20.57 Circulating 315.11 m Market Cap 6.48 b 1 y Coinbase Predicts Substantial Growth of Newer L1 Chains & Institutionalization of Regulated DeFi 1 y StarkWare Proposes to Deploy Aave on its ZK-Rollup L2 StarkNet 1 y Bitcoin Aims for $50k Ahead of Low-Liquidity Holiday Season as Girls Who Code Refuse to “Miss Out” on Crypto ATOM 3.00% Cosmos / USD ATOMUSD $ 15.12
$0.453.00% Volume 243.3 m Change $0.45 Open $15.12 Circulating 286.37 m Market Cap 4.33 b 1 y Bitcoin Is Back Above $51k and Ether $4,100 as The Cryptocurrency Market Goes Green 1 y Coinbase Cloud wanting to be the “AWS of Crypto,” Amasses $30 Billion in Staked Assets 1 y “Ethereum Is The Clear Winner,” says ConsenSys CEO as MetaMask Users Grow 38x in Last Year
Dollar Is Showing The Strength
The crypto market, however, is not alone in seeing losses. S&P 500 has also been on a decline this month, having dropped 2.5% after hitting a new all-time high right at the beginning of September at 4545.85.
Tech-heavy Nasdaq, which also hit a new peak this month, has been down for less than a fortnight, down just over 2.3%.
As for the Dow Jones Average Index, it has slipped 3% since reaching a new high in mid-August.
While the stock and crypto market are both going down, the USD Index has been on an uptrend since last week to hit 93.432 on Monday, the second-highest level this year. The greenback aims for a 2021 high of 93.74, which it hit on August 20 and before that seen in early November 2020.
As the dollar shows strength, gold isn’t faring any better either. The bullion is trading at $1,758.71 per ounce, on a decline since early August 2020 ATH of $2,075 per ounce. Between March and May, the precious metal did get some relief rally of 14.3% above $1,900 but is now back down.
We Don’t Need Institutions Anymore
Yet another weekend of sell-off action saw $818.55 million of liquidations, with 40.86% of it happening on Bybit and 19.2% on Binance.
Due to this, open interest on Bitcoin futures dropped $1.34 billion in just two days, and Ether’s slid $360 million in four days.
While public markets are not doing well, showing a lack of institutional capital inflow, private markets see exactly the opposite.
In the month of August, the crypto and blockchain sector raised nearly $2.1 billion in private investment across over 100 rounds. The highest rounds at 65 were recorded in Seed and Pre-Series A but amassed the lowest amount at $190.6 million. The later stage gained the highest amount at $663 million but the lowest rounds, just 4.
“The overall funding environment for crypto this year – the depth, breadth, quality and size – is the single biggest factor that would lead you to believe the “four year cycle” that has historically driven crypto is likely coming to an end in real time,” commented Travis Kling who’s running Ikigai Fund, on the amount of capital being invested in the crypto infrastructure.
According to Three Body Capital, with crypto here to stay as people adopt it as money, crypto no longer needs institutional validation or capital as it is getting both from people, who are the ones that matter.
“TradFi institutions remain hamstrung by the very rules and regulations they put in place to cement their prominence,” it noted.
“We think crypto's breakthrough moment is now in progress, finding product-market fit with the average person on the street, not in DeFi or trading, but in ‘normie' things like gaming and art.”