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BTC’s dominance rate has pulled back to 60% from 61.20% since May 5. At the same time, the dominance rate for Tether’s USDT, the largest dollar-pegged stablecoin, increased from 7% to 7.5% while Circle Internet’s (CRCL) USDC, the second-largest, rose from 2.8% to 3%.
In other words, money seems to be rotating back into tokenized versions of the U.S. currency. That makes sense because bond markets suggest the Fed may keep interest rates elevated longer than previously anticipated. Higher interest rates make the dollar and dollar-linked investments attractive. Assets like bitcoin, meanwhile, offer no inherent yield or cash flow.
It’s not the first time this has happened this year. A similar scenario occurred in late January, just before the selloff in BTC gathered pace, driving prices down to $63,000 in early February. These trends, therefore, need to be closely watched.
Bitcoin was recently trading near $75,900, having put in lows near $75,200 early today after reports of a large block trade in BlackRock’s bitcoin ETF, IBIT. The transaction saw shares worth over a billion dollars change hands.
The 11 spot ETFs lost over $333 million on Tuesday, following the $2.26 billion in outflows over the past two weeks. Meanwhile, gold and precious metals funds have been pulling in investor money. Talk about rotation!
Ether (ETH), XRP, solana (SOL) and the CoinDesk 20 Index have each dropped about 2% in 24 hours.
“If cryptocurrencies are once again acting as a barometer of sentiment in global financial markets, this looks like an early signal of a reversal towards profit-taking,” said Alex Kuptsikevich, the chief market analyst at FxPro. “Perhaps investors prefer to take their money off the table ahead of the start of summer, beginning with the riskiest segment.”
In traditional markets, Nasdaq e-mini futures traded at record highs above 30,000 points and WTI oil fell 3% to $90 per barrel. The U.S. ADP employment report due today could add volatility to markets. Stay alert!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
U.S. funds set aside cash as SpaceX and OpenAI prepare to go public, analysts say (Reuters): Large mutual funds and passive index funds are setting aside more cash and preparing to offload some of their existing holdings in large-cap stocks, as they prepare to add upcoming blockbuster IPOs like SpaceX and OpenAI to their portfolios.
