Bitcoin Dip Moves With External Elements

Yesterday, Bitcoin dropped below $30,000 before recovering a portion of those losses. The selloff has been part of a multi-day slide that goes well beyond Bitcoin and cryptocurrencies. The three major American stock exchanges also closed Monday with losses, including with the S&P 500 dropping to its lowest point in more than twelve months. Thursday, the Dow Jones and NASDAQ both posted their worst single days since 2020.

“As Bitcoin continues to track similar movements with the stock market, particularly tech stocks, the correlation gets continuously clearer. While that may not bode well for arguments that cryptocurrencies are still inflation hedges, it does indicate that they have value in their own right,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“It is important to see this slide in its full context. Inflation is staggering, the war in Eastern Europe rages on, and there’s a great deal of uncertainty and fear in the markets. However, while Bitcoin is making the headlines, there’s unfortunate news for most financial vehicles,” noted Gardner.

“The Australian and Canadian dollars have taken a hit, and oil just dropped 6% in one day — in part because there are worries that Covid-19 lockdowns in China may continue to affect economic activity,” Gardner said.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Bitcoin continues to track with tech stocks. The issue isn’t industry related. We’re seeing selloffs across the markets. Consumer confidence is low, inflation is up, and fear is high,” Gardner said.