Tag Archives: reason

The alarming reason crypto now moves like gold but falls like stocks

The alarming reason crypto now moves like gold but falls like stocks

Financial markets worldwide faced significant pressure this week as escalating geopolitical tensions triggered a broad-based retreat from risk assets. The cryptocurrency market declined 1.17 per cent to reach US$2.42T over a 24-hour period, moving in lockstep with traditional equities and commodities in what analysts describe as a classic risk-off response to mounting global uncertainty. This synchronised movement reveals the extent to which digital assets have become integrated into the broader financial system, with crypto now showing a remarkable 94 per cent correlation with the S&P 500 and an 88 per cent correlation with gold.

The catalyst for this market-wide decline emerged from the collapse of US-Iran peace talks and the subsequent announcement of a US naval blockade of the Strait of Hormuz on April 12. This dramatic escalation sent oil prices surging nearly eight per cent to cross US$104 per barrel, reigniting fears of supply disruptions and asymmetric inflation shocks that could derail the global economic recovery. Traditional equity markets responded immediately to the heightened tensions.

The Dow Jones Industrial Average fell 269.23 points to close at 47,916.57, representing a decline of 0.56 per cent. The S&P 500 slipped 7.77 points to 6,816.89, down 0.11 per cent, while Asian markets bore the brunt of the selling pressure. The Nikkei 225 plummeted 477.85 points to 56,446.26, a drop of 0.84 per cent. Only the Nasdaq Composite managed to post gains, rising 80.48 points to 22,902.9 for a 0.35 per cent increase, while the FTSE 100 Index edged up 0.03 per cent to 10,600.53 despite falling 2.95 points in absolute terms.

What makes this particular sell-off noteworthy is the degree to which cryptocurrency has shed its reputation as an uncorrelated alternative asset class. The 94 per cent correlation with the S&P 500 indicates that digital assets now move almost in perfect tandem with traditional equities during periods of market stress. Even more telling is the 88 per cent correlation with gold, traditionally considered the ultimate safe haven during geopolitical crises. This suggests that investors are treating crypto as a risk asset rather than a hedge, liquidating positions across the board as they seek to reduce exposure to volatile markets. The implication is profound for those who believed cryptocurrency would serve as a portfolio diversifier during times of global instability.

Ethereum faced particular headwinds during this downturn, falling 3.65 per cent as asset-specific pressures compounded the broader market weakness. The cancellation of Ether Machine’s planned US$1.5B Nasdaq listing removed a significant vote of confidence in the institutional adoption of Ethereum-based ventures. Large treasury sales by entities like Trend Research added further selling pressure, suggesting that even sophisticated institutional players are reducing their exposure amid the uncertainty. Ethereum’s ability to hold the US$2,100 to US$2,200 support zone has become critical for the broader altcoin market, as a break below this level could trigger additional cascading liquidations across smaller cryptocurrencies.

The timing of this geopolitical crisis could not be worse for risk assets. Wall Street is shifting its focus to Q1 earnings season, with analysts projecting profit growth of roughly 12 per cent, marking the weakest performance since mid-2025. Goldman Sachs kicks off the major financial reporting cycle today, and investors will scrutinise every word for indications of how the banking sector is navigating the twin challenges of geopolitical instability and persistent inflation concerns. The IMF and World Bank Spring Meetings also begin this week, with IMF chief Kristalina Georgieva warning of potential downgrades to global growth forecasts due to the ongoing conflict. This confluence of negative catalysts creates a challenging environment for any sustained market recovery.

Looking ahead, the cryptocurrency market faces several critical inflexion points that will determine whether this decline represents a temporary setback or the beginning of a deeper correction. The SEC and CFTC roundtable on the CLARITY Act scheduled for April 16 could provide regulatory clarity that stabilises market sentiment, though investors should not expect transformative announcements from what is likely to be a preliminary discussion.

From a technical perspective, the market is currently testing the 50 per cent Fibonacci retracement level at US$2.42T. Holding above the US$2.39T level, which represents the 38.2 per cent retracement, is crucial for short-term stability. A break below US$2.34T would signal that deeper correction risks are materialising, potentially opening the door to further downside.

The path forward hinges on two primary factors: whether geopolitical tensions subside and whether regulatory developments provide reassurance to institutional investors. A de-escalation in the Middle East or renewed diplomatic efforts between the United States and Iran could trigger a relief rally across risk assets.

Analysts warn that supply disruptions in the energy market will persist even if a ceasefire holds, meaning inflation pressures may remain elevated for longer than markets currently anticipate. This creates a challenging environment where even positive geopolitical news may not be sufficient to drive a sustained recovery if macroeconomic fundamentals continue to deteriorate.

Investors should monitor several key indicators in the coming days. Price action around the US$2.42T pivot level will reveal whether buyers are willing to step in at current valuations. Any news flow from the April 16 regulatory event could provide short-term catalysts, though the market has become increasingly sceptical of regulatory promises. Ethereum’s performance relative to Bitcoin will indicate whether altcoin-specific pressures are abating or intensifying. The ability of traditional equity markets to stabilise despite ongoing geopolitical tensions will also influence crypto market sentiment, given the high correlation between these asset classes.

The current market environment demands caution and discipline from investors. The coordinated sell-off across cryptocurrencies, equities, and commodities demonstrates that no asset class exists in isolation during periods of systemic stress. Those who viewed cryptocurrency as a hedge against traditional market volatility have received a stark reminder that digital assets remain firmly embedded in the global financial system, subject to the same macroeconomic forces that drive traditional markets.

The coming weeks will test whether the crypto market can establish support at current levels or whether further downside awaits as geopolitical and regulatory uncertainties continue to unfold. Market participants must remain vigilant, focusing on concrete data rather than speculative narratives, as the intersection of geopolitics, regulation, and institutional behaviour continues to shape the trajectory of digital assets in an increasingly interconnected global economy.

 

Source: https://e27.co/the-alarming-reason-crypto-now-moves-like-gold-but-falls-like-stocks-20260413/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

The real reason crypto fell while Wall Street celebrated — The quiet correction

The real reason crypto fell while Wall Street celebrated — The quiet correction

On one hand, encouraging signals from preliminary US-China trade talks have lifted risk assets, with Wall Street closing at record highs and Asian equities starting the week on a strong note. On the other hand, the crypto market has pulled back modestly, shedding 1.24 per cent over the past 24 hours after a solid seven-day rally of 2.86 per cent.

This divergence reflects not a collapse in sentiment but rather a recalibration driven by three interlocking forces: derivatives deleveraging, airdrop-driven sell pressure, and shifting macro policy dynamics. Together, they underscore a market in transition, one that remains fundamentally intact but temporarily adjusting to new layers of complexity.

The most immediate catalyst for the crypto dip lies in the derivatives market. Open interest in perpetual futures contracts fell by 4.25 per cent to US$834 billion, accompanied by a 35 per cent drop in funding rates. This decline follows a dramatic 100 per cent surge in derivatives volume, which spiked to US$1.48 trillion, a clear sign that speculative activity had reached overheated levels.

When funding rates turn excessively positive and open interest balloons without proportional spot market support, the setup becomes ripe for a deleveraging event. Traders, sensing vulnerability or simply taking profits, began unwinding positions, triggering cascading liquidations that totalled US$869 billion. While such corrections can feel abrupt, they serve a necessary function. They purge excess leverage from the system, reducing the risk of a disorderly unwind later.

The current spot-to-perpetuals ratio of 0.23 remains low, confirming that price action continues to be driven more by leveraged derivatives than by underlying spot demand. If open interest continues to bleed and falls below the US$800 billion threshold, further downside pressure could materialise. But for now, this appears to be a healthy reset rather than a structural breakdown.

Compounding this technical adjustment is a wave of airdrop-related selling. New token launches, specifically Enso (ENSO) and Anoma (XAN), plummeted by 12 per cent to 13 per cent as recipients of free allocations rushed to monetise their holdings.

In the case of Dego Finance (DEGO), the impact was even more severe, with a 43 per cent crash following US$650,000 in long liquidations and coordinated whale sell-offs. This pattern has become increasingly common in 2025, where projects launch with low circulating supply but extremely high fully diluted valuations (FDVs). The result is a fragile equilibrium. Early participants, often incentivised through airdrops rather than organic belief in the protocol, have little reason to hold.

When large percentages of a token’s initial supply, typically 10 per cent to 20 per cent , hit the market all at once, demand simply cannot absorb the shock. The sell-off is not a reflection of project quality per se but of misaligned tokenomics and distribution mechanics. Until the industry develops more sustainable models for initial distribution, perhaps through vesting, utility gating, or community staking commitments, this post-TGE volatility will remain a recurring feature of the crypto landscape.

Meanwhile, macro policy developments are introducing a new layer of uncertainty that is beginning to decouple crypto from traditional equities. For the past week, Bitcoin and the broader market had moved in near lockstep with the S&P 500, but that correlation has now turned negative, registering at -0.56. This shift coincides with two significant regulatory signals from Asia.

First, China’s central bank issued fresh warnings about the systemic risks posed by stablecoins, echoing its long-standing skepticism toward private digital currencies. Second, Japan approved its first yen-backed stablecoin, JPYC, signalling a more proactive but tightly controlled approach to digital money.

These contrasting stances highlight a growing bifurcation in global regulatory philosophy. While some jurisdictions seek to suppress decentralised finance, others aim to co-opt it within state-sanctioned frameworks. For crypto markets, this creates a dual-edged effect. On one side, regulatory clarity in Japan could foster institutional adoption and stablecoin innovation.

On the other, China’s warnings inject caution, particularly among Asian retail participants and miners who remain sensitive to Beijing’s policy shifts. The net result is a temporary decoupling from equities, as crypto prices now reflect not just macro liquidity conditions but also jurisdiction-specific regulatory risk.

Despite these headwinds, the broader context remains supportive. Global risk sentiment has improved markedly following US-China trade overtures, with President Trump expressing optimism ahead of his October 30 meeting with President Xi.

This diplomatic thaw has lifted equities worldwide. The S&P 500 rose 1.2 per cent , the Nasdaq surged 1.9 per cent , and Asian benchmarks like South Korea’s KOSPI jumped 2.57 per cent . Even the US dollar softened slightly, with the DXY index slipping 0.2 per cent to 98.78, ahead of the Federal Reserve’s October 31 policy decision.

Treasury yields reflect this mixed outlook. Two-year yields ticked up 2 basis points to 3.5 per cent , while the 10-year yield dipped one basis point to 3.99 per cent , suggesting markets are pricing in both near-term resilience and longer-term caution. In commodities, gold’s sharp three per cent drop to US$3,980.55 per ounce underscores the retreat from safe-haven assets, while Brent crude held steady near US$65.75 per barrel despite OPEC+ output concerns.

Within this environment, crypto’s modest pullback appears corrective rather than ominous. The Fear & Greed Index sits at a neutral 42 out of 100, indicating neither panic nor euphoria. Bitcoin dominance remains stable at 59 per cent , suggesting that capital is not fleeing the sector but rotating within it.

Technically, the total market cap has retested the US$3.85 trillion pivot level, with the 14-day RSI cooling to 49.86 from overbought territory. This provides room for consolidation without triggering deeper bearish momentum. The critical support to watch is the seven-day simple moving average at US$3.77 trillion. Holding above this level would preserve the short-term bullish structure.

To sum up, today’s crypto dip is best understood as a convergence of technical, microeconomic, and macro forces, not a reversal of trend. Derivatives markets are shedding unsustainable leverage, airdrop economics are punishing poorly structured launches, and regulatory developments are temporarily disrupting crypto’s correlation with equities. The underlying macro backdrop remains favourable, with improving US-China relations, strong corporate earnings, and a dovish-leaning Fed on the horizon.

For investors, this moment offers a reminder that crypto’s path to maturity will be nonlinear, marked by volatility born not of weakness but of growing pains. The market is not breaking. It is adapting. And in that adaptation lies opportunity for those who can distinguish noise from signal.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Why the USDC depeg is not a reason to panic

Why the USDC depeg is not a reason to panic

The crypto industry is currently experiencing anxiety due to concerns about the potential detachment of USDC, a stablecoin supported by US dollars. As an individual who closely monitors the market, I have been observing the situation and would like to share some of my personal views.

Firstly, It’s worth emphasizing that Silicon Valley Bank (SVB), responsible for holding the funds backing USDC, reportedly has enough assets to meet all withdrawal requests. According to the Federal Deposit Insurance Corporation (FDIC) reports as of December 31, 2022, SVB had approximately $209.0 billion in assets and about $175.4 billion in deposits. However, despite the impressive asset base, there are still concerns about the liquidity of SVB’s book and what percentage of a haircut would be expected if the bank were to experience significant losses.

This uncertainty stems from the fact that the bank’s underlying assets are not transparent, and there are no clear indications of how illiquid or risky these assets might be. As a result, there is a risk that if SVB’s assets experience significant losses or become illiquid, the bank may struggle to meet all of its obligations, potentially resulting in a depeg of USDC. This would significantly impact the broader crypto market, as USDC is widely used as a trading pair on various exchanges.

Secondly, another important aspect to consider regarding the stability of USDC is the financial backing provided by Circle, the company that issues the stablecoin. Circle holds 77% of their reserves in highly liquid instruments such as 1-4 month T-Bills, managed by Blackrock and held at BNY Mellon. This allocation of reserves provides significant security for USDC, as T-Bills are generally considered very safe and highly liquid investments.

The T-Bills held by Circle provide an absolute floor for USDC of around 0.77, meaning that even in the worst-case scenario, USDC should not depeg below this level. Furthermore, since T-Bills are highly liquid, they should be easily sold if Circle needs to raise funds quickly to meet unexpected obligations.

This provides additional protection for USDC and helps mitigate any potential risks associated with the stablecoin. It’s also worth noting that Circle’s retained earnings and interest income should theoretically be sufficient to cover any expected “losses” it may be exposed to from SVB. This means that even if SVB were to experience significant losses or become illiquid, Circle should be able to cover any potential losses without impacting the stability of USDC.

Thirdly, another point to consider when assessing the potential impact of a depeg of USDC is the maximum exposure of Circle. This company issues the stablecoin to Silicon Valley Bank (SVB), the bank that holds the funds backing USDC. Experts estimate that Circle’s maximum exposure to SVB will be around $198 million, which is a relatively small percentage of the total funds backing USDC, which is approximately $3.3 billion.

While this may seem like a large sum, it’s important to note that Circle has significant financial reserves and should be able to absorb any potential losses without significantly impacting the stability of USDC. The crypto market as a whole has grown significantly over the past few years, with a current market capitalization of close to $1 trillion. In this context, the potential loss of $198 million would represent a relatively small percentage of the overall market. It should not significantly impact investor confidence or the stability of the crypto market as a whole.

Fourthly, the relationship between Coinbase and Circle. Another factor that may reassure investors in USDC is the relationship between Coinbase and Circle. Coinbase, one of the largest crypto exchanges in the world, holds $4.4 billion on its balance sheet and is a 50-50 partner with Circle in the Centre Consortium, which oversees the technical aspects of USDC. Given its significant investment in USDC and its partnership with Circle, Coinbase has a vested interest in ensuring the stability of the stablecoin.

This may mean that Coinbase could provide additional support to Circle if needed, further strengthening the stability of USDC. Coinbase has a strong reputation in the crypto industry and has demonstrated a commitment to regulatory compliance and financial stability. As such, the involvement of Coinbase in the management of USDC may provide an additional layer of confidence for investors.

While there are concerns about the potential depeg of USDC, several possible scenarios could play out over the next week. One possibility is that Coinbase, as a partner in the Centre Consortium and a major investor in USDC, may provide additional support to Circle if needed. This could take the form of additional financial backing or other resources to help ensure the stability of USDC. Another possibility is that Circle may take on debt or credit facilities from BlackRock or other institutional lenders to help shore up its financial position.

This could provide additional liquidity and help to address any concerns about the stability of USDC. It’s also possible that the Federal Reserve may intervene to support Silicon Valley Bank (SVB), the bank that holds the funds backing USDC. While this may be seen as an unlikely scenario, it cannot be completely ruled out, given the potential impact of a destabilization of USDC on the broader financial system.

Several actions can be taken regarding risk management for investors who hold USDC. One option is to hedge USDC/USDT perpetual swaps by shorting USDC through centralized or decentralized exchanges (CeFi or DEX). This strategy can help offset potential losses if the value of USDC were to decline. Another strategy is to borrow USDC against USDT on lending protocols. However, this option may be limited due to the potential risks associated with USDC. Investors may also consider trading out of USDC and into USDT on CeFi exchanges at a rate of around 0.95 if they are concerned about the stability of USDC.

This can help to reduce exposure to any potential risks associated with USDC. It’s also important to note that investors should avoid sending USDC to Circle for redemption. While the risk of gated redemption is relatively low, there is still a potential risk of this occurring. As such, it’s recommended that investors hold USDC in a safe and secure wallet and take appropriate risk management measures to protect their investment.

In conclusion, investors must stay vigilant and informed during market volatility, such as the current unease in the crypto sector surrounding USDC. It’s important not to make impulsive decisions based on uncertainty or unpredictability but to remain composed and clear-headed. One way to stay informed is to follow updates and analyses from reliable sources, such as financial news outlets or industry experts.

It’s also important to understand one’s investment portfolio, including any potential risks or vulnerabilities. Taking a measured and calculated approach to investing can help mitigate potential losses and protect one’s assets. By remaining watchful and well-informed, investors can navigate market volatility and uncertainty with greater confidence and clarity.

 

Source: https://cryptoslate.com/op-ed-why-the-usdc-potential-depeg-is-not-a-reason-to-panic/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j