Crypto Showdown: Will Altcoins Break Free from Bitcoin’s Shadow?

Let's get to the big story breakdown.

While crypto majors recovering from weekend lows, Bitcoin climbing back above the 108,000 level yesterday after a sliding below 1000 over the weekend, we are right now looking at that chart of Bitcoin above 107,000.

Now this weekend's slide did come amid geopolitical tensions in the Middle East, and we are climbing higher and we're not too far away yet again from all-time highs for Bitcoin.

But at the same time, I do want to mention that coin desk.

Centaua launched a benchmark tied to overnight stablecoin lending rates and aimed at bridging on chain markets with traditional money markets.

Joining me here at the New York Stock Exchange is Andy Beer, head of product and research at Coin Dusk Indexes.

Andy, great to have you back here.

Thank you so much for joining us.

Sure, and thanks for bringing up the interest rates.

So what we had noticed over a long period of time, we talk about stablecoins here a lot, but there's no real money market for stablecoins.

There's no kind of transparent place to say term rates.

Like you would with Sofer and things that can support interest rate swaps, things that can support futures.

So we were very happy to announce last week that we've created this overnight rate which uses Ave rates which which update almost instantaneously, continuously.

We built an overnight rate based on that called the coin desk overnight rates for USTC and USDT, and we will be talking to exchanges and money market sorry, market makers and OTC desk about creating over the counter.

And listed derivatives based on that rate.

So with all the good news happening with stablecoins, we think a proper transparent usable money market is a great next step.

Where are those rates?

Well, overnight I saw the USDC rate at 5.09%, which is kind of middle of the range.

That's for USDC.

USDT was 4.81%.

They tend to hover around 5%, but they can get pretty volatile.

So we're delighted with those coin desk overnight rates and what happens next.

And speaking of what's happening next, that's the question on everyone's mind because believe it or not, we're about to wrap up the 2nd quarter and head into the second half already.

Here in the US, we do have a holiday shortened week next week of 4th of July, so that really speaks to the time of year.

But I do want to take a closer look at Bitcoin, Andy, and where we've been in this quarter, not to mention the past month, and given all of the volatility in the markets, we're.

Do we go from here?

So from May 7th we kind of entered the range.

We came from 97,000 to just over 101,000, and except for last Sunday on a close to close basis, we look at close midnight UTC, we've held this 10% range of about 101,500 to around 11,000 111,000 in change.

So that's 50 days of holding that range.

You can count last Sunday as an anomaly or the fact that that might Broken the streak, but still that's a pretty tight range.

That's great for adoption because lower volatility breeds confidence, breeds, I think, comfort with investors to add Bitcoin to their portfolios.

On the other hand, from the trading point of view, it's a bit difficult, right, because there's not enough volatility, not enough movement to inspire trading in options or trading in relative value.

So things like strategies, micro strategy, strategies. strategy with Bitcoin kind of almost relies on high volatility.

So to the extent that it stays crimped within a range and low vol, it can impact on you know how the market interacts with Bitcoin.

So there are pluses and minuses.

We wrote a little bit about this at Coin Desk.

We'll have to see what happens from here as we head into the summer, which over the last two summers has been kind of sideways.

Yeah, and in addition to the crypto majors, Bitcoin and If you also pay close attention to what's happening in altcoins, and I think this is a good time to also talk about what we're seeing under the surface when it comes to Bitcoin in terms of flows as well as volumes.

It's yeah, it's been a little difficult.

Ether had this great kind of short cover squeeze starting in late April going through May, which got it as high as 2800, still not the 4000 it reached even last November, but still that it was showing some signs of life.

Ethereum, Solana, the other majors XRP are catching up now to Bitcoin's recovery after last weekend.

But again, they're following, right?

We need to see some leadership in the ATS or some independence from Bitcoin and the Alts to really feel a bit more comfortable.

Bitcoin 20 index was down 1% over the last week, whereas Bitcoin was up kind of 1.5% 2%.

So we'd like to see that kind of rubber band relationship between Bitcoin and other digital assets change into some more kind of actual diversification.

An actual independent movement in the alt space.

Yes, and Andy, before I let you go, we have about 60 seconds here, but there are plenty of eyes on legislation when it comes to digital assets.

So as we gear up for the next quarter, what do you expect to see from the nation's capital?

I think you know, getting the Genius Act passed in the Senate and hopefully that gets put into law and we'll put some punctuation on that great piece of legislation, I think.

People are starting to realize that you and I have talked about it for months how positive stablecoins can be both for crypto and both you know for convenience and payments and as a store of US Treasuries and other kind of assets.

So that would be good.

We're hearing more recently there's some stories on coin desk that other legislation may not happen until the end of the year.

We thought it might be sooner.

Um, there is a lot of VC investment coming back into digital assets though, so I think there is a sense that the current climate will allow more capital formation and business operation, and I think we'll take that for now, see how much momentum we can maintain over the summer and then see how that carries us.

To the fall with all the macro and geopolitical news coming in from the outside.

Yeah, a lot of headlines to keep our eyes on Andy.

So next time we have you back on set, it'll be the second half and the beginning of Q3.

So thank you so much for weighing in and as always, thank you so much for your insight.

Thanks, Rey.

Thank you.