Volatility strikes

With stock indexes soaring, traders are ratcheting up talk about a recession in the U.S. where home sales fell for a third straight month.

Investors, who once welcomed the cool side of the macroeconomic pillow, now seem to be sweating an economic downturn.

The S&P 500 has gained about 15% so far in 2024 in a run that has been punctuated by 31 record closes.

Bitcoin's recent rough patch went from worrisomely steady descent to wicked-sharp plunge just in the past few hours to start off a new, potentially volatile week.

Early Sunday, BTC surrendered its $64K handle and then later on in the day waved good-bye to $63K. The plummet to below $61K came early this morning following a statement posted on the website of defunct exchange Mt. Gox, to the effect that former clients who had their digital money stolen ten years ago would finally see some restitution, starting in early July. This puts a trustee-supervised vat of roughly 140,000 BTC worth $9 billion into play, exacerbating sell pressure said to be connected with selling by the German government as well as by quarter-end risk-off maneuvering amidst aforementioned heightened macro uncertainty.

Early BTC investors victimized by the Mt. Gox hack will be reacquainted with assets that are now a lot more valuable than they were early 2014, making them inclined to sell at least a part of their holdings, traders told CoinDesk.

The crypto markets are coming off a bad week. A Bloomberg gauge of the 100 largest digital assets fell 5% in the seven days through Sunday, the steepest such slide since April. Ethereum and Solana each have endured extended periods of successive weekly declines.

SOL has lost 24% in the past month despite furious memecoin spawning and trading on the Solana network.

ETH, which seems destined to soon have spot ETFs tied to it, has shed 11% in the past 30 days. (BTC lost 11.5% in that same span).

Among the Big Ten, Dogecoin (DOGE) has suffered the worst 30-day stretch, losing 30%.

Marketwide, bearish sentiment is taking root, Bloomberg said.

It was less than a year ago, in September of 2023, that Mt. Gox's bankruptcy trustee Nobuaki Kobayashi revealed that creditors would be reimbursed with tens of thousands of BTC that had been recovered alongside an equally large store of Bitcoin Cash (BCH).

Following the news that a repayment plan would start to unfurl early next month, BCH, that sometimes-overlooked yet still enormous (18th-largest) crypto, sank from $372 to below $350.

BCH's roughly 10% tumble happened between 5 a.m. (EST) to 7:30 a.m. (EST) as word of the restitution timeline spread. But this episode can’t be that unnerving for a community steeled by experience.

A proof-of-work (PoW) blockchain designed as a faster, less expensive alternative to the original Bitcoin chain, BCH forked off back in 2017. Between late that same year and the following Christmas, BCH completed an epic rollercoaster ride, going from an all-time high of $3,700 to an all-time low below $77, per CoinGecko.

The boom/bust cycle was just that, and it gave way to new undulations to form a plot you could totally see coming. 

Currently, BCH has a total market capitalization of roughly $7 billion. Right around the time of the BTC halving, this past April, BCH quietly had its own halving. It was BCH’s second-ever such event. Sure enough, BCH spiked from $480 in late March to nearly $700 a few weeks later. Momentum faded fairly quickly, though. The BCH $500 mark was toast before April’s end.

Still, it was only six weeks ago that, out of the blue, BCH experienced an eyebrow-jerking surge (+1,150%) in daily average transaction size, suggesting large-scale usage by the likes of wealthy individuals or institutions, seen at the time (in the thick of yet another a rally) as a hugely positive indicator.

Meanwhile, BCH bulls like to point back to four years ago when the forked asset went from $250 to $1,300, following a rollicking path bookending the first BCH halving.