Synchronization of the stock market and cryptocurrencies

The volatility in the stock markets and cryptocurrencies is intense this year. The changes in both markets to some extent seem to be synchronized - much more than last year. On NFT market False rumors surfaced over the weekend about the attack on OpenSeaand the NYSE may be more active in this area.

About the author

Mads Eberhardt, Cryptocurrency Market Analyst, Sax Banks. Cryptocurrency Market Analyst at Saxo Bank. He gained experience as a trader at Bitcoin Suisse AG and founder http://BetterCoins.dk (website taken over by Coinify).

Cryptocurrencies are strongly correlated with the stock market this year

According to a study by Anders Nysteen, senior analyst at Saxo Bank, Cryptocurrency market is strongly correlated with the stock market this year. In 2022, the correlation between daily returns from the S&P 500 index i Bitcoin ranged from 0,56 to 0,61, depending on the measure of correlation and the source. For comparison, in 2021 this correlation was only around 0,25. 

The cryptocurrency market appears to have been largely influenced by the same factors as the stock market, i.e. concerns over inflation and tensions between Russia and Ukraine. In addition, after a shift in risk appetite in the stock market, highlighted by the decline in tech stocks this year, the cryptocurrency market has suffered as well, as more traditional stock traders are likely to have cryptocurrencies in their portfolios as well - so they scale their risk proportionally across stocks. and cryptocurrencies. As a portfolio component, cryptocurrencies may therefore not provide the same degree of diversification as before.

From an alleged hacking attack to phishing by OpenSea users

On Sunday morning, there was information that there was an attack on the ethereum contract of the largest exchange of non-exchangeable tokens (NFT) OpenSea, and as a result many users lost their NFT to alleged hackers. As the OpenSea exchange consumes the most transactions on ethereum and is one of the most used use cases in this blockchain technology, its value is critical to the entire cryptocurrency community. For this reason, the price of ethereum fell by about 4% in the following hours. Later it turned out that neither OpenSea nor its contracts for ethereum were the target of the theft. It was a phishing attack based on a malicious contract that the attacker had somehow tricked several users into approving, making it possible to steal their NFTs. OpenSea exchange revealed later, 17 people fell victim to phishing.

This underlines that the cryptocurrency market is very sensitive to rumors of alleged attacks, particularly with regard to the larger and frequently used protocols, as they act as one of the few lifeboats in the industry for genuine use cases. Fortunately, it turned out that this is not (next) such an attack.

The New York Stock Exchange registers the trademark for trading NFT

OpenSea will not become a monopoly on the NFT market, as both Coinbase and Kraken will soon launch their own NFT exchanges. Additional competition for OpenSea may also become another company, ie the New York Stock Exchange belonging to the Intercontinental Exchange, known as the NYSE (New York Stock Exchange). NYSE she folded Last week, a trademark application to register the NYSE name for a variety of cryptocurrency-related products and services, such as virtual reality and NFT. Hence, the NYSE may increase its activity in the NFT area, in addition to the six NFTs which issued last April, each symbolizing the first Spotify, Snowflake, Unity, DoorDash, Roblox and Coupang deals on the stock exchange.