Asian stocks open weak, Bitcoin jumps above $30,000 on MicroStrategy filing and despite Fitch’s Treasury downgrade

Good morning Here’s what happens:

Prices: Bitcoin accepts Fitch downgrade of US Treasuries

Insights: How quickly times are changing. Bitcoin’s dominance collapsed in July after rising in June. CoinDesk CDI’s lead researcher, Todd Growth, explained why.

After debt downgrade and MicroStrategy filing, Bitcoin surges above $30,000

This downgrade comes at a time when companies are reporting relatively positive earnings, so the market doesn’t appear to be panicking like it did in 2011 when S&P downgraded US Treasury ratings.

In 2011, bitcoin was not yet a fully mature asset class and there was not the same trading volume, making the quality of correlation with macroeconomic events poor.

But how was the performance when the downgrade happened?

Mixed. On August 6, 2011, it fell 33% to $6.6, but the next day it rose 20% to $7.9. However, the trading volume between the two days was only $200,000.

A dip in Bitcoin dominance in July

Bitcoin’s dominance waned in July after gaining ground the previous month, Todd Groth, head of research at CoinDesk Indices, told “First Mover” TV hosts on Tuesday.

Groth attributed the trend reversal to the lack of the catalysts that propelled bitcoin’s price dramatically higher in June and Ripple’s partial victory last month in an ongoing lawsuit with the Securities and Exchange Commission (SEC), making altcoin- gave investors a boost. The U.S. federal court’s decision found that the sale of Ripple’s XRP tokens on exchanges and via algorithms did not constitute investment contracts and raised hope that the SEC could not consider other tokens to be securities.

“Basically, it’s made a lot of altcoins rival Bitcoin and even Etherium relative to the small-cap universe,” Groth said.

In the days following the ruling, Coinbase, Kraken, and other exchanges relisted or announced plans to resume XRP trading, and trading in the token mushroomed. Meanwhile, Bitcoin has steadily tumbled, topping 5% at the end of July, its second monthly decline in an otherwise positive year. BTC dominance rate slipped below 49% in July after rising over 52% in late June. The CoinDesk market index only deviated about 1%.

“This has really been driven by the computing sector, DeFi, and the digitization sectors, which have small tokens compared to currency and smart contract platforms that host Bitcoin and Etherium,” Groth said.

The exploit at DeFi giant Curve Finance has driven the price of its CRV token down, putting a $168 million stash of founder Michael Egorov’s money at risk of liquidation. BlockSec co-founder Yajin “Andy” Zhou joined the conversation. Todd Groth, CFA and Head of Research at CoinDesk Indices, discussed developments in crypto markets in July. And Koray Caliskan, author of “Data Money,” shared his thoughts on the future of crypto regulation.

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