By Frances Yue
Happy belated Thanksgiving! Welcome to Distributed Ledger, our weekly crypto newsletter, which usually reaches your inbox on Thursday. This installment is going out on Friday due to the holiday.
I’m Frances Yue, crypto reporter at MarketWatch, and I’ll walk you through the latest and greatest in digital assets this week so far. Find me on Twitter at @FrancesYue_ to send feedback or chat about anything crypto.
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Crypto in a snap
Major cryptocurrencies slid for another week and plunged on Friday amid broad sell-offs of risky assets , after a new variant of COVID-19 was detected in South Africa .
Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.30% fell more than 7% on Friday, with a 1.1% loss for the past seven days, according to CoinDesk data. The cryptocurrency was recently trading at $54,460 early New York time. Ether /zigman2/quotes/108573964/realtime ETHUSD +0.44% plunged more than 9% on Friday, while it logged a 2.3% gain over the past seven days. Dogecoin /zigman2/quotes/226077044/realtime DOGEUSD +0.48% recorded a 9% loss over the past seven days, while Shiba Inu fell roughly 10% over the past seven days.
|Biggest Gainers||Price||% 7-day return|
|Basic Attention Token||$1.51||37.4%|
|Source: CoinMarketCap.com as of Nov. 26|
|Biggest Decliners||Price||% 7-day return|
|Source: CoinMarketCap.com as of Nov.26|
Ben McMillan, founder and chief investment officer at crypto asset manager IDX Digital Assets, said that for the past few weeks, the firm has been “very cautious on crypto” and has been “repositioning portfolios more defensively,” as major cryptocurrencies saw higher volatility.
“Bitcoin just hit all-time highs. So there’s always a little bit of a pause,” McMillan told MarketWatch in an interview. On Nov. 10, bitcoin notched a record high of $68,991, according to CoinDesk data. “As it tests all-time highs, you start to see market participants taking profits. That’s not unexpected,” according to McMillan.
Global macroeconomics uncertainty also adds to the recent selloff pressure, said McMillan. Although the narrative that bitcoin could be used as an inflation hedge has contributed to the cryptocurrency’s earlier bull run, bitcoin has recently started to demonstrate some sensitivity to interest rates, according to McMillan.
“A good example is when you looked at the record high CPI numbers that came out a couple of weeks ago, what was interesting was that Bitcoin initially traded up on that news consistent with the idea of Bitcoin as an inflation hedge, but it actually sold off very quickly a few hours later as the rates market started trading up,” McMillan added.
McMillan said he expects continued volatility through the year-end. “That doesn’t mean that bitcoin can’t hit all-time highs. It just means that we’re expecting there to be more weakness ahead in the immediate term,” McMillan said.
Bitcoin leaving exchanges
As of Wednesday, the amount of bitcoin held by exchanges fell to around 2.3 million, a more-than-three-year low, according to CryptoQuant.
This sign is usually interpreted as bullish in the long term. “Waning supply on exchanges typically means that market participants are moving BTC into cold storage because they see incremental upside for the foreseeable future,” wrote a recent report by crypto exchange Kraken.