Cryptocurrencies continued to decline amidst the spike in yields of sovereign treasury bonds. The hardening in the interest rates on risk-free government securities to multi-year highs have increased the opportunity cost of holding cryptocurrencies that are neither risk-free nor interest bearing like a sovereign bond.
Fears of the Federal Reserve keeping interest rates higher for longer have been aggravated with indications of the resilience of the U.S. economy. The recent surge in oil prices that has stoked fears of fuel-fed inflation has also contributed to the spike in bond yields.
Ten-year U.S. Bond yields increased 1.4 percent overnight to 4.502 percent whereas instruments of the 30-year horizon increased 1.78 percent overnight to 4.603 percent. Five-year U.S. treasuries increased 0.47 percent to 4.593 percent. Sovereign 10-year govt bond yields across Europe too have increased between 1 and 2 percent overnight.
Amidst the bearish sentiment contributed by the surging bond yields, overall crypto market capitalization has fallen more than 1.5 percent in the past 24 hours to $1.04 trillion, versus $1.05 trillion a day earlier.
Bitcoin dropped more than 2 percent overnight to $26,048.89. BTC has shed more than 4 percent in the past week which witnessed the Fed’s hawkish hold of interest rates.
Ethereum shed 1.7 percent overnight and is currently changing hands at $1,567.31.
Among the other top-10 non-stablecoin cryptocurrencies, XRP (XRP) slipped more than 3 percent followed by Toncoin (TON) that dropped more than 2 percent. BNB (BNB), Cardano (ADA) and Dogecoin (DOGE), all declined between 1 and 2 percent whereas Solana (SOL) and Polkadot (DOT) erased less than 1 percent. TRON (TRX) is trading close to the flatline.
Meanwhile, the CoinShares’ Digital Asset Fund Flows Weekly report on institutional investments showed outflows of $9 million for the week ended September 22. Bitcoin products recorded outflows of $5.9 million whereas Short Bitcoin products recorded outflows of $2.8 million. Ethereum recorded outflows of $2.2 million. Surprisingly, XRP products recorded inflows of $0.7 million followed by Litecoin that recorded inflows of $0.5 million and Solana that received inflows of $0.3 million.
The country-wise analysis shows inflows of $18.1 million to Germany and $2.1 million to Canada. United States recorded outflows of $14.1 million. Outflows from Switzerland stood at $2.6 million.
Cumulative AUM stood at $30.1 billion of which $23.3 billion is in United States. Canada, Switzerland, Sweden and Germany account for AUM of less than $2 billion each.
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