Different crypto will be less correlated, as healthcare stocks ‘won’t move in the same way’ gold ETF moves, a crypto asset manager says

Hello! Welcome back to Distributed Ledger, the weekly crypto newsletter that hits your inbox every Thursday. I’m Francis Yu, a crypto reporter at MarketWatch, and I’ll share with you the latest and best digital assets this week so far. Find me on Twitter at MustafaHosny Oh God, Amen To send feedback or tell us what you think we should cover.

Encryption in a jiffy

Bitcoin BTCUSD
It is recently trading at around $42,900, with a gain of 1.5% over the past seven days. Ether ETHUSD
It posted a 2.2% loss over the past seven days, and was recently trading at around $3,287. Dogecoin DOGEUSD meme
It is up 6.9% over the past seven days, while another dog-shaped token, Shiba Inu SHIBUSD is up.
recorded an increase of 4.5%.

coding standards
Biggest Winner

the price

7% day return

Oasis Network

$0.51

32.9%

harmony

$0.36

26%

near

$18.4

19.3%

dash

$143.6

16.2%

osmosis

$9.3

15.5%

Source: CoinGecko as of January 13

Biggest loser

the price

7% day return

Olympus

USD 226.3

-28.4%

Wonders

$2197.28

-13.8%

ring ring

1.59 dollars

-12.5%

helium

$34.36 USD

-11.7%

percentage grid

$3.28

-10.3%

Source: CoinGecko as of January 13

Encoder variety?

Major cryptocurrencies often trade side by side, as investor sentiment shifts around news related to macroeconomics, regulatory oversight, and the widespread adoption of digital assets. However, such correlations are likely to weaken as the crypto space becomes more mature with different industry segments, some industry participants said.

“Every time there is a significant correction, the correlations go up very, very quickly,” Jeff Dorman, chief investment officer at crypto asset manager Arca, told Distributed Ledger in an interview. But such correlations will decline in a longer time frame, according to Dorman.

Tokens in various sectors have posted significantly different returns over the past year. Bitcoin is up around 25%, while Ether is up 216%. Among other blockchains, Terra’s LUNA is up by more than 10770%, while Solana’s SOLUSD is up by more than 10770%.
Record gains of over 4000%. XRP XRPUSD
and Cardano ADAUSD
It posted a return of 160% and 335%, respectively.

Over the same period, the DeFi Pulse, a capitalization-weighted index that tracks the performance of decentralized financial tokens, is up 42%.

Blockchain Games Token Axie Infinity AXSUSD
and Sandbox 16.419% and 13,024%, respectively.

“There is no reason why two assets wrapped in a digital asset shell would behave the same way,” Dorman said. “In the same way, why would you expect a healthcare stock to move the same way a gold ETF does an early stage technology ETF? They are all ETFs, not that they are the same.”

It’s the same with digital assets. Just because they are wrapped in a digital asset wrapper doesn’t make them look-alike assets. They behave differently. According to Dorman, there are different inputs that drive output.

Bitcoin correlation with other cryptocurrencies

This chart shows Bitcoin’s correlation over the past 3 years with the Ether smart contract, the Cardano Proof of Stake blockchain, the token associated with the Metaverse Decentral and MANAUSD.And
Dogecoin meme token, SushiSwap SUSHIUSD Decentralized Exchange Token
and the central cryptocurrency exchange, Binance Coin, respectively.

Although the perfect version would show bitcoin’s correlations with different indicators weighted by the market capitalization of different sectors, the chart provides a general idea of ​​how bitcoin trades with other cryptocurrencies.

The correlation size ranges from -1.00 to 1.00. Positive correlation means that the assets are moving in the same direction, while negative correlation means that they are moving in the opposite direction. The higher the absolute value of the coefficient, the stronger the relationship.

Bitcoin posted positive correlations with most of the selected cryptocurrencies during the time frame. Its correlation coefficient with ether is significantly higher than that of other tokens. Bitcoin’s correlation with most of the pick cryptocurrencies saw a slight uptick during the latest round of selling in the market.

Currency Scales

the castle Possible push encryption?

Citadel Securities, the online market maker founded by Ken Griffin, on Tuesday announced a $1.15 billion investment from venture capital giant Sequoia and Paradigm in the cryptocurrency investment space.

In an opinion piece, MarketWatch’s Thornton McEnery wrote how the deal could give Citadel liquidity to expand and go abroad. “It has been an open secret for years that Griffin wants Citadel to be the next Goldman Sachs, a financial services superpower with global reach that can make the markets dominate stock trading and fund deals of staggering volume,” McEnery wrote.

The deal could also hint at the potential for Citadel to rush into cryptocurrency, as Paradigm is a venture capital firm focused on investing in crypto companies and protocols.

“We look forward to partnering with the Citadel Securities team as they expand their technology and expertise into more markets and asset classes, including crypto,” Matt Huang, co-founder and managing partner of Paradigm wrote in a statement.

Compared to some other big quantitative trading firms, Citadel has been somewhat behind in the crypto game, which may be linked to Griffin’s long-standing skepticism about digital assets, although the billionaire said in October that his company would trade cryptocurrency if it was properly regulated.

Other major high-frequency trading firms like Jump Trading and Hudson River Trading have brought their quantitative approach to the industry, while quantitative hedge fund Two Sigma has also recruited cryptocurrency operations to build its crypto trading business.

Coinbase Acquires Derivatives Exchange

Coinbase announced Wednesday that it is buying derivatives exchange FairX in an effort to expand its crypto exchange offerings to retail and institutional clients, giving them a single place to trade bitcoin and other cryptocurrencies, but also access to the growing world of related derivatives.

After Binance, Coinbase has the second largest spot trading volume in cryptocurrency, with a 24-hour trading volume of about $3.3 billion, according to CoinMarketCap.

The addition of FairX, a Chicago-based derivatives exchange with roots in the retail market, will help Coinbase expand by giving its customers access to some of the cryptocurrency futures contracts traded on the CFTC regulated platform.

Cryptocurrency derivatives trading volume reached $2.9 trillion in December, surpassing spot trading volume, according to a report by data site CryptoCompare.

What then?

Changpeng Zhao, or CZ, founder of the world’s largest crypto exchange Binance, has a fortune of $96 billion, surpassing Mark Zuckerberg’s, according to Bloomberg Billionaires Index. Wealth did not take into account CZ’s personal crypto holdings. Binance has disputed the accuracy of Bloomberg’s estimates of Zhao’s net worth, saying the cryptocurrency is “prone to higher levels of volatility,” according to a Bloomberg article.

In a tweet last year, Zhao warned investors about the importance of managing their risk. “I can afford to lose the house. I can always find a job in a bank if my bitcoin goes to 0. My (simple) lifestyle won’t be affected much. Not everyone is in the same situation,” Zhao books.

In other crypto-related news, more companies and banks are launching their own stablecoins, a type of cryptocurrency whose value is tied to another asset, often fiat.

Pay Pal is exploring launching its own stablecoin while consortium of banks including New York Community Bank, NBH Bank, FirstBank, Sterling National Bank and Synovus Bank are launching their own stablecoin called USDF.

Crypto companies and funds

In cryptocurrency-related corporate trading, Coinbase Global Inc. COIN
It traded down 1% to $232.75 on Thursday afternoon. It fell 0.5% in the past five trading sessions. Michael Saylor MicroStrategy Inc. MSTR
It traded down 3.4% on Thursday to $497.34, and lost 0.3% over the past five days.

Mining company Riot Blockchain Inc. RIOT
Shares fell 3.2 percent to $20.44, with a 0.2 percent loss over the past five days. Shares of Marathon Digital Holdings Mara
It is down 6% to $28.53 and is down 2.7% over the past five days. Another miner: Ebang International Holdings Inc. EBON
It was trading down 7.1% at $0.98, with a gain of 5.5% over the past five days.

Overstock.com OSTK
It fell 2.85% to $52.23. Shares are down 2% over the five-session period.

Block Inc. mint
S shares fell 3.7% to $144.15, with a 3.12% loss for the week. Tesla TSLA‘s
Shares were down 4% to $1,061.5, while its shares posted a 0.3% loss in the past five sessions.

PayPal Holdings Inc. PYPL
It lost 1.5% to $184.52 while posting a 4% loss over five sessions. NVIDIA Corp. NVDA
It lost 4% to $268.47 and was looking to lose 4.8% over the past five days.

Advanced Micro Devices Inc. AMD
It fell 2.7% to $134.1 and lost 1.6% over the past five trading days, as of Thursday afternoon.

In the box space, ProShares Bitcoin Strategy ETF BITO
It fell 2.2% to $27.01 Thursday, while Valkyrie Bitcoin Strategy ETF BTF
It fell 2.2% to $16.71. VanEck Bitcoin ETF XBTF Strategy
It fell 2.5% to $42.2.

Grayscale Bitcoin Trust GBTC
It was trading at $30.97, from 3.4% Thursday afternoon.

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