Investing in crypto is not for the faint of heart, and the past week proved that.
Amidst an ongoing and escalating humanitarian crisis compounded by a multitude of financial sanctions, all eyes were on the crypto markets. As we mentioned last week, the utility of crypto and digital assets in uncertain periods like these should not be overstated.
As the global economy continues to anticipate the long-term effects of both a geopolitical and monetary crisis, crypto assets are in a unique position to:
- Negate the effects of inflation
- Be a source of crowdfunding for relief efforts
- Become the leading store of value in certain regions
The crypto markets continue to rebound following last week’s losses, and we encourage investors to keep an eye out for profit-taking opportunities using the CVI (see an example from last week). In today’s markets, opportunities like these are in plain sight for all to explore.
A few highlights for the week:
- Bitcoin and most of the major altcoins had extended gains this week after shedding close to 8% in value the previous week
- Inflation continues to be a major cause of concern among government institutions and large enterprises. With the Bank of Canada raising its interest rate for the 1st time since 2018, there is an increased expectation that the Federal Reserve will follow suit.
- Following its last week peak of 90.5, the CVI was down 17% over the weekend before picking up some momentum. It is currently in the 77 range as of Thursday, March 3rd 2022.
Following a 22% correction in BTC last week, there was a significant price rebound with a week-over-week positive return of 14%. Following news of sanctions against Russian financial institutions, the overall crypto markets saw an increased positive price action — this was no doubt driven by the sentiment that crypto and digital currencies will be a potential transaction mechanism for those cut out of traditional banking and finance.
So far, BTC has seen a 12% month-over-month return and this is about 6% higher than the leading Altcoin, Ethereum.
Ethereum on the other hand has seen a 14% increase in its week-over-week return, which is slightly lower than BTC. However, on a month-to-month basis, it is about 5% higher than the broader altcoin market.
Looking into the coming weeks, there is an expectation that there will be increased transaction volumes across most digital assets as crypto continues to be utilized as both a store of value and transaction source.
Following last week’s peak of 90, the CVI Index decreased in value over the weekend before gaining some momentum at the start of the week. After rebounding to 84, the CVI has been on a downward trend all week and is currently hovering around the 77 value.
The ETHVI has also seen some activity following last week’s spike of 103. Since then, future volatility sentiment dropped by 20% over the past weekend and the ETHVI is currently around the 83 range (last weekend’s lowest value).
Just as COVID accelerated remote work and global networking, there is a huge chance that the current geopolitical crisis accelerates crypto’s adoption across government agencies and institutions that have previously had negative opinions about the digital currency economy. Against this sentiment, the markets will continue to experience some uncertainty as the fight between crypto optimists, regulators, and pessimists play out in real-time. While the crypto market is not for the faint at heart, it is clear that its long-term potential remains unbounded.
A few things that have happened this week
For all of our updates and to join the conversation, be sure to check out CVI channels:
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