Not for the first time, no news meant bad news for — or at least a lack of interest in — a great many altcoins on the crypto market Monday. While these declines weren’t worrying, they did leech value from more than a few crypto portfolios.
Formerly high-flying altcoins The Sandbox (CRYPTO: SAND), Sui (CRYPTO: SUI), and Axie Infinity (CRYPTO: AXS) were all down by around 6% in late afternoon trading. More precipitous falls were being recorded by Stacks (CRYPTO: STX) and Maker (CRYPTO: MKR), which were off by a respective 7% and 10%.
It’s not that any of those cryptos were socked with bad news. Rather, it’s the lack of any notably positive items that’s inspiring folks to sell out of them.
This isn’t all that surprising, really. After all, in the space of only a few months earlier this year, we had several powerful developments that helped to pop desire for such investments — and, in turn, cranked their prices higher.
January saw the approval and quick introduction of spot Bitcoin (CRYPTO: BTC) exchange-traded funds, which at a stroke created a relatively quick and easy way for the crypto-curious to buy and hold the most popular coin. Speaking of Bitcoin, its latest halving also got investors excited, as history showed that its price tended to rise sustainably after that once-every-few-years event.
Spot crypto ETFs are about to make their debut in Hong Kong on Tuesday. However, this isn’t juicing excitement in digital money… at least, not yet.
In the meantime, both the global and domestic economies seemed to be increasingly fertile fields in which to plant the seeds of crypto investments. Some key data sets appeared to indicate that inflation was starting to recede, and when inflation recedes, interest rates tend to come down. Lower rates mean a higher appetite for risky assets — hello, cryptocurrencies! — thus more demand for your favorite coin or token.
Since then, inflation has proved to be a more stubborn beast to tame, while more than a few profit-takers have taken profits in the wake of the spot Bitcoin ETFs and excitement about the 2024 halving (which occurred earlier this month). As it usually does, Bitcoin’s trajectory mirrors that of a swath of altcoins. Late Monday afternoon, its price had dipped to slightly over $63,000. Less than a week ago, it was approaching $67,000.
It isn’t easy being an altcoin. They’re not only at the whim of the broader macroeconomy (not to mention geopolitical developments), they rarely escape the orbit of Bitcoin.
Crypto bulls shouldn’t lose hope, though. In recent times, there has been more good macro news than bad. Also, on the geopolitical front, the situation seems to be improving — albeit incrementally — in both the Ukraine war and the Middle East. This feels like a “hang in there and stay positive” moment for cryptocurrency believers.
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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends Maker. The Motley Fool has a disclosure policy.
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