-Cryptocurrency Market Will Remain Reliant on Stocks: Citibank -
Citibank announced that the cryptocurrency market's high correlation with stocks will continue.
According to a research report published by Citibank, the cryptocurrency market's high correlation with stocks will continue and this situation will be further strengthened by upcoming macroeconomic developments. It was stated that network activities on the Ethereum and Bitcoin blockchains have also decreased or stalled.
Citibank predicts that the cryptocurrency market has performed weaker compared to other risk assets and that this situation will continue with the decrease in demand. The bank's report noted that there were outflows from both Bitcoin and Ethereum spot exchange-traded funds (ETFs).
The report, prepared under the leadership of analyst David Glass, included the following statements: "There were net outflows from ETFs, layer 1 blockchain activity decreased or stalled, and funding rates are at low levels." Citibank emphasized that the crypto market will be more dependent on macroeconomic developments in the coming period, especially the impact of data such as the US Nonfarm Payrolls data.
The recent weakness of digital assets has led to a decrease in energy consumption by Bitcoin miners and “weak production cost model results.”
The report also stated that Bitcoin’s hashrate, which measures mining difficulty and competition in the sector, has reached its highest levels in recent times.
The report also stated that activity on the Ethereum blockchain has decreased and transactions on the Bitcoin network have paused.
On the other hand, JPMorgan also published a similar report, saying that the crypto ecosystem lacks a major catalyst in the near term and that digital assets will be more sensitive to macroeconomic factors.
