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Bitcoin reached its highest level since the start of March on Tuesday, but has since slipped back.
Dreamstime
Bitcoin
and
Ether
prices slipped on Wednesday, in line with action in the stock market, as smaller cryptocurrencies
Solana
and
Cardano
were rising after their inclusion in a new fund was announced.
Bitcoin, the leading digital asset, was down 1% over the past 24 hours to just above $42,000 according to data from CoinDesk. It had briefly topped $43,000 at the peak of Tuesday’s trade, the highest levels since the beginning of the month.
“Bitcoin is once again nearing the upper boundaries of its $37,000 to $45,000 zone, but still doesn’t have a clear catalyst to break it,” wrote Edward Moya, an analyst at broker Oanda, in a note late Tuesday. His words were borne out as Bitcoin failed to push above the $45,000 mark and has since notched declines.
Smaller peer Ether fell close to 2% to below the psychologically important $3,000 level. The token underpinning the Ethereum blockchain network has recently been outperforming Bitcoin, and had steadily climbed above $3,000 from below $2,800 at the end of last week.
Bitcoin and Ether remain well off all-time highs of $68,990 and $4,865, respectively, reached in early November.
There were two outperformers of note among smaller cryptocurrencies, or “altcoins,” with Solana and Cardano rising 1% and 3.5%, respectively.
Digital asset manager Grayscale Investments announced on Tuesday the launch of its third diversified fund aimed at a more traditional equity investor crowd. The Smart Contract Platform Ex-Ethereum Fund is initially being offered to accredited investors in a private placement, with Grayscale set to seek a public listing on secondary markets, as it has done for its other products.
Solana and Cardano recently made up about 50% of the new Grayscale fund, with smaller holdings in tokens Avalanche, Polkadot, and Polygon. Avalanche was 4% lower Wednesday, with Polkadot 1.5% higher and Polygon around flat.
“Meme” crypto
Dogecoin
— called that because it is mostly based on internet jokes rather than a significant blockchain project — was down 1.5%, with fellow meme token
Shiba Inu
trading just above flat.
Cryptos broadly rose on Tuesday but were slipping back on Wednesday in tandem with action in the stock market.
Bitcoin and its peers should theoretically trade independently from mainstream financial markets, but that is often not the case; moves in crypto are frequently correlated with those of other risk-sensitive assets like tech stocks.
As such, equities and cryptos alike were lower after Federal Reserve Chair Jerome Powell signaled the central bank could raise interest rates half a percentage point— more than the usual 0.25% — at its next meeting. More aggressive rate policy from the Fed could dent economic growth and investors’ appetite for risk.
Write to Jack Denton at jack.denton@dowjones.com
