The latest moves in crypto markets in context for June 23, 2022.
Price point: Bitcoin trades flat and Polygon’s MATIC surges 25%. We take a look at why MATIC is outperforming BTC.
Market moves: A dive into how Fed Chair Powell was challenged by senators on Wednesday on inflation and crypto regulation.
Bitcoin (BTC) has been trading flat over the last 24 hours, currently around $20,500. Altcoins outperformed BTC overnight, with MATIC, ATOM and AVAX all gaining ground.
Polygon’s MATIC rallied 25% on the day after a series of announcements and product launches. On Wednesday, Polygon announced the launch of Polygon ID integration. Polygon ID is a self-sovereign identity solution powered by ZK cryptography that brings huge potential for DAO governance, according to the company.
Polygon, an Ethereum layer-2 scaling solution, has also recently claimed to have obtained a major carbon neutrality (a balance between emitting and absorbing carbon) milestone, which could be contributing to the price uptick. Polygon announced earlier this week that it had partnered with KlimaDAO (a decentralized collective of environmentalists, developers and entrepreneurs) as part of its environmental initiative.
Polygon’s MATIC has been trading in an upward trajectory over the past seven days.
Some analysts are also attributing MATIC’s recent rally to a few weeks of whale accumulation. Santiment, the on-chain data provider, tweeted that sharks and whales holding MATIC have been in a large accumulation trend for the last six weeks.
“The tiers of holders ranging from 10K to 10M coins held have collectively added 8.7% more to their bags in this timespan,” tweeted Sanitment.
Matthew Dibb, COO and co-founder of Stack Funds, told CoinDesk that the rallies for MATIC, ATOM and AVAX are being held up on low volume.
“Because of this we would expect that any decent drop in equities will lead to a selloff in alts,” said Dibb.
He also noted that bitcoin dominance (BTC.D) has dropped considerably in the past few days from its high at +48%.
Dibb explained that this is because there has been relative strength in ether as well as litecoin vs. bitcoin which has led to BTC dominance losing some ground.
“Our expectation is that should a further selloff occur, we will see BTC.D continue to head north to short term highs,” added Dibb. “We see this as a temporary situation.”
Fed Chair Powell Says Soft Landing Will Be ‘Challenging,’ Calls for Crypto Regulation
Federal Reserve Chair Jerome Powell told Congress that the U.S. central bank must “go ahead” and keep raising interest rates to get inflation down, even if that means that the economy faces higher unemployment and a potential recession.
During a hearing before the Senate Banking Committee on Wednesday, Powell said that a soft landing “is going to be very challenging,” and that a recession is “certainly a possibility.” Sen. John Kennedy (R-La.) called Powell the “most powerful man” in the world right now.
Three senators, including Sen. Cynthia Lummis (R-Wyo.), Sen. Kyrsten Sinema (D-Ariz.) and Sen. Sherrod Brown (D-Ohio), challenged Powell with questions on crypto, specifically regulation, accounting treatment of digital assets and the current crash in the crypto market.
“We are tracking those events very carefully,” said Powell, but the central bank is “not really seeing significant macroeconomic implications, so far.”
He also repeatedly highlighted that there’s a need for a better regulatory framework for crypto.