Bitcoin, the largest cryptocurrency by market value went up as much as 1% to $47,078.17 in the last 24 hours, although it has slumped about 32% since setting a record high in early November. While Ethereum went up 0.1% to $3,942.57 in the last 24 hours.
While the global cryptocurrency market capitalization today is $2.31 trillion, which is a 0.2% increase in the last 24 hours, the total cryptocurrency trading volume in the last day is at $114 billion, according to CoinGecko. Bitcoin dominance is at 38.5% and Ethereum dominance is at 20.3%, as per CoinGecko.
Popular DeFi tokens such as Solana, Cardano, Polkadot and Polygon maintained a downward trend in the last 24 hours.
Meanwhile, with Bitcoin falling for a second day it put the largest cryptocurrency on pace for a fifth consecutive weekly decline, joining other risk assets under pressure with central banks taking a more aggressive tone on inflation.
“Downward pressure that has historically existed towards the end of the year has continued to keep prices low,” said a team of Grayscale researchers including David Grider.
Central banks globally are prioritizing the fight against elevated inflation by tightening monetary settings, while also keeping a wary eye on the impact of omicron. That backdrop has investors questioning whether so-called risk assets such as cryptocurrencies and technology shares are due for a rougher patch after surging from pandemic lows.
Crypto proponents have long argued that Bitcoin and other digital assets, on account of their being an idiosyncratic asset class, could act as hedges against inflation and swings in other areas of the financial market. Only 21 million Bitcoin will be put into circulation under the computer protocol that governs issuance, though that figure isn’t expected to be reached for several decades.
Academics such as Christian Catalini and Antoinette Schoar of the Massachusetts Institute of Technology who have done extensive studies of the sector say the “digital gold” argument is overblown.
“All the data to date refutes the hypothesis,” Catalini said during an interview with Bloomberg News. He cautioned that it may still be too early to make that judgment since cryptocurrencies are little more than a decade old.
(With inputs from agencies)
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