After a turbulent month for the cryptocurrency sector in March, the price of Bitcoin (BTC) remained stable in April despite some volatility. The meteoric rise of memecoins like PEPE grabbed the headlines, and First Republic, another mid-sized US bank, went under. However, at the core of current market sentiment is a tussle between markets and policy makers.: While the chairman of the United States Securities and Exchange Commission, Jerome Powell, affirms Publicly stating that interest rates are unlikely to drop this year, markets for risk assets like cryptocurrency have firmly priced in a pivot in the coming months.
In times like these, it is prudent to delve into the fundamentals that will shape future market moves. In an uncertain macroeconomic environment and with the imminent regulatory crackdown in the US, there are other notable developments that are easily drowned out by this mainstream news.
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For those interested in gaining a deeper understanding of the various sectors of the crypto space, Cointelegraph Research publishes a monthly Investors Insights report that dives into venture capital, derivatives, decentralized finance (DeFi)regulation and much more. The monthly reports, compiled by leading experts in the field, are an invaluable tool to quickly get an idea of the current state of the blockchain industry.
The NFT boom fades and memecoins take over
Non-fungible token collectibles (NFTs) are one of the few sectors that have taken a hit this month. Memecoins, such as PEPE, may be partly responsible for this, as they absorbed the spotlight, printing exorbitant profits. BRC-20 tokens, a new abstraction built on top of the Bitcoin Ordinals protocol, can also compete for cash inflow from traditional sellers of collectible NFTs.. The sellers have started to persistently outbid buyers on NFT markets recently, and this trend is likely to continue.
There are concerns that the NFT market is going into free fall as all important metrics such as volume and active wallets have seen a steep decline. NonFungible reported just 49,200 active wallets and $80,500 in sales volume this month. The NFT market wars, combined with the waning enthusiasm around NFTs, are other factors driving this long-term evolution.
Despite the general downturn in the NFT market, one niche of the NFT sector that is gaining momentum is the NFT lending market. Since the beginning of 2022, this sector has experienced double-digit growth every month, which continued in April with a 16.13% increase in new users.
Mining Stocks Outperform BTC
Each Cointelegraph Research Monthly Trend Report includes coverage of the mining economy and crypto stocks. For investors interested in increasing their exposure to BTC, mining stocks have historically been a popular option. While idiosyncratic factors have weighed on individual stocks this month, the sector as a whole appears to be out of the 2022 bear market.
The highest returns were once again posted by TeraWulf, which continued its rally with another 85% rise in valuation. CleanSpark, IrisEnergy and BitDigital were other stocks with strong gains. Notably, the values outperformed BTC as a whole in April, after having lagged the previous month. While Bitcoin only posted a 2.8% close, the largest crypto stocks, dominated by mining, posted 12.9%.
Of course, rising valuations in the mining industry are highly sensitive to BTC price action. For those who are confident of improving macroeconomic conditions for risk assets, these stocks may offer good entries, having previously been battered by the bear market. The equities section of the monthly report tracks the fundamentals of the major companies in the sector, thus changing our usual analysis of the economics of Bitcoin mining.
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