March Crypto Market Recap Bitcoin Rises Amid Banking Uncertainties and

March Crypto Market Recap: Bitcoin Rises Amid Banking Uncertainties and Macro Headwinds – CoinDesk

An eventful march of bank failures, sustained inflation, and other macroeconomic headwinds left investors pondering where to put their trust — and their money — and ultimately proved favorable to bitcoin and other cryptos considered stores of value that are resilient to turbulence is.

Bitcoin (BTC) recently traded around $28,500, up over 21% in March. At one point on Wednesday, the largest cryptocurrency by market value broke through $29,100 and hit its highest level since June 2022. BTC has far outperformed the S&P 500, Nasdaq and other traditional assets. The technology-focused Nasdaq is up over 4% for the month.

“The macro landscape was extremely constructive for ‘alternative money’ in March,” Greg Magadini, director of derivatives at crypto analytics firm Amberdata, told CoinDesk in an email, adding that both BTC and gold, traditionally considered safe haven assets had experienced “explosive upside volatility” this month.

Magadini wrote that BTC’s recent volatility in the options market following the implosion of crypto-friendly Silvergate and Silicon Valley banks differs markedly from the more dramatic shifts following the FTX collapse and other crypto disasters over the past year.

“BTC is exploding higher,” he said. “This rush into ‘alternative money’ (BTC and GOLD) shows some panic in just holding USD.”

This month’s gains came even as the crypto industry endured the collapse of crypto-friendly banks Silvergate and Silicon Valley Bank and a spate of regulatory enforcement activity. This week, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, the world’s largest crypto exchange by trading volume, and its founder Chengpeng Zhao over alleged regulatory violations. Aftershocks from the banking crisis rocked the stablecoin sector earlier this month, but cryptos were largely unaffected.

For institutional investors, one of their biggest concerns wasn’t “market volatility surrounding Bitcoin,” but “regulatory volatility and regulatory uncertainty,” Ben McMillan, chief investment officer at crypto asset manager IDX Digital Assets, told CoinDesk ahead of Binance -CFTC lawsuit news.

Ether (ETH) recently changed hands at $1,820, up 13% in March. Earlier in the month, the second largest crypto in market value hit $1,861, its highest level since August 2022.

Encrypted messaging protocol Mask Network’s native MASK token snatched the trophy as the best-performing token among 160 assets in the CoinDesk Market Index (CMI), up 68% in March, changing hands at $6.30.

Lookonchain said previous data patterns show that “in many cases, transfer-in leads to higher MASK prices, while transfer-out causes price declines.”

“XRP has been in a legal battle for a while, but the fact that we may finally see a legal conclusion for XRP makes it very valuable,” said Amberdata’s Magadini.

Injective Protocol’s INJ token and Stellar’s XLM token are up 34% and 26%, respectively.

Chain’s XCN token in the currency sector of the CMI has been among the biggest CMI laggards, plunging over 53% in March.

The STG token of Stargate Finance’s cross-chain bridge protocol in the Decentralized Finance (DeFi) sector is up over 32% to 71 cents, according to data aggregator CoinGecko.

The StargateDAO intended to reissue STG tokens by March 15 due to community concerns about liquidity and security arising from the protocol’s entanglement with Alameda Research, the trading arm of embattled crypto exchange FTX. But the group scrapped those plans after a reprimand from FTX liquidators.

AMP token, a collateralized token used to speed up transactions on crypto networks, fell 28%, while crypto exchange LCX’s LCX token fell 27%.

Stefan Rust, a crypto investor and CEO of data aggregator Truflation, wrote in an email to CoinDesk on Wednesday that traditional (TradFi) finance has reached an inflection point. “It seems that people are realizing that the banking crisis is not really over yet,” he wrote.

Rust pointed out that the bank collapse wiped out valuable resources for investors and others looking to get involved in the digital asset ecosystem, alluding to increasing regulatory pressures in the US that could potentially hamper the industry’s growth. “Many are trying to navigate the on and off ramp situation and find loopholes,” he wrote.

But he added that the recently unsettled relationship between DeFi and TradFi is likely to stabilize. “Long term, there will be a whole new on and off ramp system between DeFi, crypto and the fiat world as reliance on centralized, regulated institutions has definitely broken the backbone,” he wrote. “There is no longer a need to keep all your funds in one bank, one central entity that holds all your assets, because who knows what will happen to that entity and ultimately to your savings.”

“Markets always need some time to realign, regain trust and find new avenues and funding streams. However, money will always move uphill,” he wrote.

James Rubin contributed to this report.