Markets
Stock markets hit new highs last week, but BTC and ETH are suffering
The cryptocurrency sector is often described as a risky asset class that tends to underperform during times of economic uncertainty.
Although the stock market also falls into this category, at least to some extent, it has been on a wild ride over the past few weeks, with several new all-time highs from the major indexes. At the same time, cryptocurrencies have suffered and the largest digital assets have fallen since March.
The American stock market on a roll
Perhaps motivated by the hype around Nvidia, the US stock market has seen a massive rise since the start of the year. Take for example the largest and arguably most important index – the S&P 500. It entered 2024 at less than 4,800, but climbed to around 5,500 earlier this week to hit a new high.
The Nasdaq Composite has had an even more impressive run, soaring 19.8% year to date and hitting its own high near 18,000 this week.
The Dow Jones Industrial Average, which has few ties to the tech sector and is not exposed to top performer Nvidia, however, underperformed. His annual earnings are less than 4%, but he still managed to hit a new all-time high earlier this year, around 40,000.
The situation with risky crypto assets like BTC and ETH, however, is quite different, at least in recent weeks.
What about BTC/ETH?
The year of Bitcoin has also been rather bullish, driven by the approval spot BTC ETFs in the United States in January. Although the fourth halving also took place earlier this year, an event generally seen as the catalyst for the bulls, the asset has actually underperformed since its completion.
ETH saw a regulatory wink from the US SEC as well, since the agency gave the green light to Ethereum spot ETFs last month. However, they I haven’t launched yet and the price of ETH lost almost all the gains made after the positive news.
So, BTC and ETH are down about 10% from their yearly highs and have decoupled from the US stock markets. It is worth mentioning, however, that although they have declined in recent weeks, they remain more in the green than the aforementioned indices.
BTC is up 50% since the start of 2024, while ETH has gained 54% over the same period.