Today, the term “bloodbath” would be an ample description of how the cryptocurrency market is moving. As of 2 PM ET, the crypto market as a whole is down 6.3%. The move was shaped by the very strong underperformance among a number of today’s high-growth digital currencies.
Among the symbols with large caps, we’ve seen relatively outperform (if one can call it that) today. Binance coin (CRYPTO: BNB), the world’s third largest cryptocurrency, is down 5.4% in the past 24 hours as of 2 PM ET. During this same time frame, the largest of the eighteenth and seventeenth symbols, XRP (CRYPTO: XRP) And chain link (CRYPTO: link)It sank 6.1% and 4.8%, respectively.
The stock, bond and cryptocurrency markets all fell today, after the release of yesterday’s Federal Reserve meeting minutes that indicated the need for rate hikes and balance sheet cuts could come sooner than expected. Investors in all risky assets have been selling for most of the past 24 hours, as fears of ditching easy money policies raise many questions about the sustainability of capital flows into riskier assets.
Binance Coin, XRP, and Chainlink are three very unique cryptocurrencies, representing blockchain networks that provide unique value to the end user. However, these high-cap tokens have also been major beneficiaries of the capital-chasing returns over the past year.
The market’s fear that capital may become more expensive in the near term is a valid and prescient question. All tokens are likely to remain under pressure as the market engages in price discovery and investors seek quality in this environment.
However, the relative outperformance of these three coins today indicates that these tokens are among the high-quality cryptocurrencies that investors are looking for.
The crypto market is inherently much more volatile than other major asset classes such as stocks and bonds. However, many of the same catalysts for the equity and fixed income markets have affected this sector as well. Thus, there is correlation building across these asset classes that investors should be aware of.
Capital inflows are important, and it would be an exaggeration to say that crypto investors have not benefited from the extended period of accommodative monetary policy that we have seen. When the perforating vessel is withdrawn, the question remains as to what assets will be raised in this environment.
At the moment, investors seem to be taking a logical and prudent approach to risk aversion in many sectors, including cryptocurrency. It is unclear how long this intense sale will be. However, the relative outperformance of these three tokens is not lost on many investors looking for quality and value.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.