The S&P 500 is roughly flat over the past week, compared with a 1% gain in BTC and a 3% drop in ETH over the same period.
If selling continues, more investors could start to reduce their positions on risky assets, and cryptocurrencies may be hit first, according to Kuptsikevich.
Further, given macroeconomic headwinds, some analysts are concerned about a coming “crypto winter,” similar to what occurred in 2017-2018.
The recent underperformance in some altcoins and decentralized finance tokens indicates heightened risk in crypto markets.
These are tokens created by Daniele Sestagalli, who gained a cult following in recent months thanks to his community-centric approach toward crypto projects.
On Wednesday, CoinDesk’s Lyllah Ledesma wrote about the SundaeSwap debacle that left CardStarter users with steep losses.
The reserves of Terra-based lending and borrowing protocol Anchor, which offers a supposedly industry-beating benchmark deposit rate of around 20%, are also sliding fast as a result of the crypto market crash.
Terra’s UST stablecoin was thrown into flux because the tokens used to leverage some stablecoins related to Sestagalli are in a mess.
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Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis.
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