Bitcoin (CRYPTO: BTC) and other large coins traded in the green as the global cryptocurrency market capitalization rose 2.57% to $1.85 trillion on Wednesday night.
What Happened: BTC traded 3.27% higher at $42,872.65 over 24 hours. For the week, the apex cryptocurrency has declined by 1.2%.
Read Next: How To Buy Bitcoin (BTC)
Ethereum (CRYPTO: ETH) was up 4.4% at $2,969.38 over 24 hours. Over a seven-day period, ETH has fallen 2.9%.
Meme cryptocurrency Dogecoin (CRYPTO: DOGE) rose 2.3% to $0.2022 over 24 hours. Over a seven-day time frame DOGE has fallen 9.08%.
The top gainer over 24 hours at press time was dYdX (CRYPTO: DYDX). The coin rose 18% to $27.44 in the period. Over the last seven days, DYDX has shot up 91%.
The governance token of the dYdX exchange touched an all-time high of $27.59 minutes before press time on Wednesday.
Why It Matters: The growing correlation between equities and crypto is sparking inflation-related worries. Charles Edwards, founder of Capriole Investments noted the trend earlier in the month on Twitter.
The world still sees Bitcoin as a risk on asset.
Almost every Bitcoin correction in 2021 has correlated with a S&P500 correction of -2% or more. pic.twitter.com/5b8XAXMRZU
— Charles Edwards (@caprioleio) September 12, 2021
Federal Reserve members projected 2021 personal consumption expenditures inflation of 4.2% from a previous estimate of 3.4% recently.
Rising inflation could slow down growth and recovery post-pandemic and be a negative for both stocks and cryptocurrencies as monetary stimulus is tapered off.
“Markets are getting comfortable with Fed tapering, which leads to bottoming in yields, steepening of the curve,” wrote JPMorgan’s equity strategy team in a recent report, CoinDesk reported.
On the other hand, CoinDesk noted that BTC’s correlation with commodities has been declining over the last few months due to the rise in oil and gas prices.
Meanwhile, Chain analysis data indicate that Europe received over $1 trillion in cryptocurrency over the last year alone, which is representative of 25% of global trading activity, Freddie Williams, sales trader at the United Kingdom-based digital asset broker GlobalBlock, said in an emailed note.
“Large institutional transaction value grew from $1.4B in July 2020 to $46.3B in June 2021, coming to take up half of all European trading activity,” said Williams.
As per Williams, Central, Northern, and Western Europe has grown into the “world’s largest cryptocurrency economy since July 2020.”
Williams pointed out that the region experienced a massive increase in trading activity since the period, particularly in the Decentralized Finance space.