If you were checking your crypto wallet with your fingers over your eyes last weekend, you were far from alone - with the value of Bitcoin and Ethereum dipping almost 50% from their peak values, it’s been a rough week for anyone who owns crypto. While many fear the worst (the signal for "crypto ice age" is up almost 600% in the past week), fear not - we’re here to share the silver linings of the crash that our AI spotted first.
The dip (more like plunge) has been attributed to rumors surrounding the Federal Reserve’s hike of interest rates, which revealed the growing correlation between the price of the S&P 500 and Bitcoin, reflected in the syncing of the signals our algorithm picked up. With the Federal Reserve's announcement of the continuation of low interest rates Wednesday, we expect to see crypto continue to reflect volatility in the stock market in the short-term, with a potential for conversations to diverge once again as the crypto market “consolidates” (as Bitcoin and Ethereum already are).
USD-backed stablecoins are a safety net.. for now
Demand for stablecoins is up as the USD-backed crypto currencies emerged as a safety net for investors looking to preserve their holdings during the dip. However, the volatility these coins experienced fed doubts about their future trajectories, especially considering the pending executive order on digital currencies expected in May, which will likely include more information on how Central Bank Digital Currencies (CBDC) and stablecoins will coexist in the future. As a result, trend lines on the largest stablecoins were highly correlated, with conversations surrounding the tokens set to peak in the near future with the impending digital currencies decision. Expect to see more algorithmic stablecoins emerge as the demand for transparency, decentralization and scalability continues to rise.
Intel shapes the future of mining
The crypto crash also resulted in a price drop for GPUs, with Nvidia and AMD in particular seeing price drops of more than 11% after months of rising prices. This is most likely due to a correlated decline of interest in crypto mining itself, following China and Russia’s bans of crypto mining within their countries, with the signal for the Russian crypto ban up over 130% in recent weeks.
The mining chip game is also set to gain some new players, with Intel planning the release of a “Bonanza Mining” chip at the upcoming ISSCC conference. Intel is advertising the crypto mining chip as ultra-efficient and low voltage, and its release is already creating buzz with conversations surrounding it up 92% in recent months, with a trajectory predicted to continue growing following its release. With its own supply chain and plenty of industry experience, Intel’s new chip is likely to change the mining game, and we’ll be keeping an eye on the release and the sentiment surrounding it in the coming months.
DeFi defies the dip
The largest DeFi tokens experienced some of the speediest recoveries from the dip, with Fantom and Loopring showing particularly bullish growth. The Fantom DeFi network saw a boost of over 50% last week - while Bitcoin and Ethereum fell nearly the same amount. Its new project, Solidly, prioritizes compatibility with other protocols, and hype surrounding reports of its planned “fair launch” of evenly distributed tokens and rewards systems is growing. Loopring is another DeFi token that we first spotted at the beginning of the year, with its secure protocol, dynamic utilities and upcoming NFT projects boosting its signal (and price) following the crash. Signals for both tokens are up hundreds of points, and we predict that the conversations surrounding them, as well as their prices, will continue to rise as the industry recognizes the utility and stability of DeFi tokens.
While the current stock tickers look bleak, corrections are the norm for the crypto market, and Bitcoin has been known to drop up to 80% as it corrects to market trends and long vs. short-term holders. To those who have been in the game a while, this crash represents opportunity, especially for DeFi platforms, as well as a wave of change regarding stablecoins and the correlation between crypto and the stock market prices. My advice: hold your coins, trust their proven utility, and catch your breath this week - we’ll be back next week with the knowledge on Zero Knowledge protocols and the future of scalability in tokens.
NWO.ai's predictive platform enables leading Fortune 500 companies and government agencies to anticipate and track global cultural shifts by aggregating, analyzing, and producing actionable reports on human-generated data. We are leveraging petabytes of external, noisy, and unstructured data from various sources –including search, social media, blogs, news, patent databases, SEC filings and we are continuously adding more sources. Our mission is to answer the what, when, and most importantly, 'why' behind a consumer trend and enable our customers to detect these shifts as early as possible.
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