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Many cryptoassets saw a significant price drop over the last week, as investor confidence took a tumble. Thanks to Moody’s downgrade and ongoing US regulator action, Bitcoin’s price dipped from nearly $27k to $25,500 on Saturday, with it currently trading at the $25,800 mark. Ethereum saw a similar fate, with it now trading around $1,700, down from close to $1,900 last week.
 

Bitcoin’s stock correlation is looking weaker

In recent times bitcoin has developed something of a knack for correlating closely with the stock market, and indices heavy on tech such as the Nasdaq. But this correlation appears to be wavering, as economist David Lin points out. 

Underlying much of the correlation was the greater inclusion of institutional money in the market. While there’s no suggestion institutional money is waning, there is certainly trepidation in crypto, while excitement in AI is lifting tech. These trends tend to correct themselves given enough time though.
 

MiCa gets a kick-off date

The EU’s flagship MiCa legislation is set to come into law on 30 December 2024 and could provide valuable regulatory certainty for the crypto sector in Europe. 

Robust and fair regulation will likely be a boon for a healthy cryptoasset industry at a time when volatility has left businesses in the space treading carefully. Where the EU leads, other countries are likely to follow suit. The UK is working on its own set of rules through the Financial Services and Markets Bill. 

Regulatory certainty will give investors and innovators alike renewed optimism in the sector. While this is unlikely to create any near-term price reactions, in the long term it could have profound effects on the market for the better.
 

Abrdn fund tokenized by Archax

Tokenization is a growing area of the crypto market and could see key traditional financial firms and products brought into the cryptoasset ecosystem. 

Stablecoins are the best-established version of real assets represented digitally, as fiat currency held and recorded via blockchain. The increasing tokenization of TradFi assets is worth watching as it begins to blur the lines between the old financial world and the new. 

Institutional involvement in crypto is a growing trend despite volatility in the past year. What is clear is this isn’t going to change, and will have a pervasive impact on the direction of the market in the next few years. 

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