Crypto prices rise as traders dip back into digital asset market

Crypto traders are showing signs of renewed confidence, with the market value of digital assets rising by $280 billion in July after a painful sell-off and credit crunch that scared many players out of the market.

Investment products that track crypto assets have pulled in just under $400 million since the start of July, racking up the longest stretch of continuous weekly net inflows since March, according to data from crypto asset management group CoinShares.

“We are starting to see some bold investors coming in [and] to take . . . long positions, and people aren’t adding to short positions right now,” said James Butterfill, head of research at CoinShares.

The early signs of recovery follow a period of sharp declines in the digital asset industry. Bitcoin, the flagship of the world Encrypted currencyDown 70% from November’s all-time high, while the size of the digital asset market fell below $1tn, down from November’s peak of more than $3tn.

The drop in prices caused the collapse of Tara – once one of the largest stablecoins in the industry – and resulted in the failure of several prominent crypto hedge funds and lenders such as Three Arrows Capital and Celsius.

The sector’s woes also hurt investment vehicles like exchange-traded funds and mutual funds, which allowed investors to pounce on crypto assets without holding the tokens directly, with investors withdrawing $481 million in June, according to CoinShares.

In recent weeks, the market has shown tentative signs of recovery, with the market cap of the 500 largest tokens recovering to over $1 million, up 30 percent in July, and the price of Bitcoin hovering above $20,000.

Ether, the second-largest cryptocurrency, has gained about 40% in the past month as anticipation built that the token would move to a blockchain, or digital ledger, that has a lower carbon footprint.

Inflows and improved token prices pushed total assets under management in crypto investment products back to early June levels of $30 billion, according to CoinShares.

However, Charlie Cooper, CEO at blockchain company R3, warned that the recent rally could get complicated. “I think the fact that prices have stabilized in no way indicates an inevitable rise,” he said.

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Crypto prices rise as traders dip back into digital asset market Source link Crypto prices rise as traders dip back into digital asset market

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