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Market Wrap: Cryptocurrencies Pull Back Amid Inflation and Geopolitical Risk

Bitcoin and other cryptos dipped as oil prices surged. Higher prices could lead to slower economic growth and market volatility.

Updated May 11, 2023, 4:57 p.m. Published Mar 2, 2022, 9:27 p.m.
(Shutterstock)
(Shutterstock)

Most cryptocurrencies traded lower on Wednesday as concerns about inflation and geopolitical tensions emanating from Russia's invasion of Ukraine kept some buyers on the sidelines.

U.S. Federal Reserve Chairman Jerome Powell said on Wednesday the central bank is on track to start raising interest rates this month. "So far, we've seen energy prices move up further and those increases will move through the economy and push up headline inflation, and also they're going to weigh on spending," Powell said during his testimony before the U.S. House Financial Services Committee.

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The Thomson Reuters Core Commodity Index is up 30% over the past six months, retracing roughly 50% of its decade-long downturn. Further, the price of WTI crude oil has risen by 20% over the past week and reached a decade high above $100 per barrel. The surge in commodity prices could point to slower economic growth and greater market volatility.

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Meanwhile, Russia continued to mount missile strikes on Ukraine and to advance its troops on Ukraine despite ongoing negotiations. So far, talks between Russian and Ukrainian officials have not led to a ceasefire.

In crypto markets, BTC spot trading volume is starting to decline from the Feb. 24 spike. The ratio of buy-to-sell volume has been neutral.

Still, some indicators have shown a greater capacity to spend among bitcoin traders, which could trigger an increase in buying volume.

Latest prices

Bitcoin (BTC): $43819, −0.32%

Ether : $2949, −0.34%

●S&P 500 daily close: $4387, +1.86%

●Gold: $1929 per troy ounce, −0.71%

●Ten-year Treasury yield daily close: 1.86%


Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at coindesk.com/indices.

Stablecoin buying power

Analysts are monitoring signs of potential buying power among crypto traders, which could lead to a rise in BTC's price.

In down markets, crypto traders typically increase their holdings of stablecoins relative to bitcoin. Stablecoins are a proxy for traditional dollars in crypto markets, and are often used as a vehicle for entering and exiting bitcoin positions.

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Theoretically, a decline in the stablecoin supply relative to the total bitcoin supply could eventually reach a turning point, assuming that traders are comfortable with buying on price dips.

The chart below shows the stablecoin supply ratio (SSR). The ratio is adjusted to demonstrate when levels have reached an extreme, which typically coincides with peaks and troughs in price. Currently, the SSR is not at an extreme low but has risen with price over the past week. That could point to "the increased potential to push the price of bitcoin higher," according to Glassnode.

Still, it remains to be seen whether SSR is a leading or lagging indicator, which means a trader's decision to hold stablecoins or bitcoin could be sensitive to sudden price changes.

Bitcoin stablecoin supply ratio (Glassnode)
Bitcoin stablecoin supply ratio (Glassnode)

Altcoin roundup

  • Terra’s LUNA passes ether to become second-largest staked asset: A price surge in Terra’s LUNA token over the past week has made it the second-largest staked asset among all major cryptocurrencies in total value staked. LUNA surpassed ether , which has just over $28 billion in staked value at the time of writing. Cross-chain protocol Orion.money holds over $2 billion in staked LUNA, the largest among all staking applications that support LUNA. Its 43,000 stakers generate nearly 7% in yields, according to CoinDesk’s Shaurya Malwa. Read more here.
  • Ukraine expands crypto donations to accept dogecoin: Ukraine said it would now accept cryptocurrency donations in from supporters of the conflict with Russia – and tagged the billionaire and DOGE promoter Elon Musk in the tweet announcement. Mykhailo Fedorov, Ukraine’s vice prime minister and minister of digital transformation, tweeted the news on Wednesday morning, along with the country’s official DOGE wallet address in an effort to solicit donations in the dog-themed cryptocurrency, reported CoinDesk’s Tracy Wang. Read more here.
  • IMA financial plans to start selling NFT insurance in decentraland: IMA Financial Group, a large U.S. insurance broker and wealth management firm, is opening a research and development facility in Decentraland, the Ethereum-based virtual world where Wall Street megabank JPMorgan recently launched. Denver-based IMA’s foray into the metaverse, dubbed “Web3Labs,” was driven by the rapid growth of the non-fungible token (NFT) market, said Justin Jacobs, senior vice president of marketing at IMA Financial Group and architect of Web3Labs, reported CoinDesk’s Ian Allison. Read more here.
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Relevant news

Other markets

Digital assets in the CoinDesk 20 ended the day lower.

Largest gainers:

Asset Ticker Returns Sector Cosmos ATOM +3.3% Smart Contract Platform Solana SOL +1.6% Smart Contract Platform Polygon MATIC +1.2% Smart Contract Platform

Largest losers:

Asset Ticker Returns Sector Algorand ALGO −3.4% Smart Contract Platform Cardano ADA −3.2% Smart Contract Platform EOS EOS −2.4% Smart Contract Platform

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.

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Exchange Review - March 2025

Exchange Review March 2025

CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.

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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.

  • Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
  • Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions. 
  • Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.

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What to know:

  • Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.