It has been a turbulent time for the world’s financial markets, which have experienced several peaks and troughs since March 2020. However, it’s the crypto space that continues to grab the headlines, with market leaders such as Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) continuing to record sizable gains.
As a result, the cumulative crypto market cap rose above $2 trillion of late, while it has continued to hover above this threshold ever since (spare for a brief period in the first week of April).
In this post, we’ll appraise the performance of cryptocurrency in further detail, while also asking how stocks and forex have fared during the last week.
Crypto’s Market Cap and the Rise of Ripple
Crypto’s total market cap reached $2.26 trillion on April 14th, with this highlighting a 6.14% increase on the previous day’s figure.
The value of BTC soared to achieve an individual market cap of $1.206 trillion during this period, while Ether’s 10.35% price increase saw the asset’s market cap reach $275.7 billion.
According to Edward Moya, the senior analyst at the popular web trading platform Oanda, Ether’s record gains were also augmented by Ripple’s own price surge. More specifically, a single XRP token increased in value by 18.43% to $1.93, showcasing seven-day growth of 101.61% and enabling Ripple to become the fourth largest crypto asset by market capitalisation.
Sentiment in the crypto market has undoubtedly been boosted by the highly anticipated Coinbase IPO. Scheduled to commence on 14th, speculation is rampant following a better-than-expected first quarter trading update, with Coinbase reporting a revenue increase of $1.8 billion and a forecasted net income of between $730 and $800 million.
Make no mistake; this sentiment is likely to continue amid crypto’s latest bull run, particularly as this seems far more sustainable than previous growth spikes.
How is Forex Faring?
Typically, sentiment in the forex market wavers amid sustained dollar weakness, and there’s no doubt that the greenback is experiencing a significant slump right now.
To this end, the asset’s primary gauge (the US dollar index) recently plunged to another new low since March 23rd, with the recent $1.9 trillion stimulus package placing a huge drag on the USD.
However, the outlook is slightly better elsewhere, with the Euro witnessing increased demand following a sharp increase in the number of citizens who will be vaccinated by the end of June.
The latest global growth update from the International Monetary Fund (IMF) also increased the sentiment around the Euro, with a further upgrade increasing risk-sentiment across the board.
What About Stocks and Shares?
While the greenback may have declined of late, US stocks have continued to edge higher after a record deficit revealed marked increases in consumer and business demand.
Such moves have been witnessed across numerous asset classes too, although a relatively conservative outlook remains ahead of the highly anticipated release of the latest Fed Minutes and monetary policy announcements.
These minutes could reveal an early overshooting of the Fed’s inflation target due to base effects, with this likely to increase investor optimism and potentially trigger an interest rate hike in the near-term.
However, Wall Street may have to wait until June or July to see the full impact of the Fed’s policy decision, so a degree of caution is likely to remain throughout Q2.