What happened
As of 3:30 p.m. ET, top cryptocurrencies Chainlink (LINK -9.37%), Polygon (MATIC -5.20%) and Monero (XMR -5.62%) found themselves in the crypto doghouse. These tokens have dropped 6%, 5.1%, and 7.6% over the past 24 hours, respectively.
The top crypto projects each saw declines that were more than double the overall market, which dropped 2.3% over the past 24 hours, at 3:30 p.m. ET. Today, investors are pricing in amplified risk among high-growth stocks and digital tokens, amid a rising interest rate environment.
The yield on the U.S. 10-year Treasury rose above 1.87%, signaling the highest level since the onset of the pandemic. Additionally, the spread on five-year and 30-year U.S. Treasury bonds narrowed to its lowest level since the onset of the pandemic, another bearish signal for the market.
Image source: Getty Images.
So what
Chainlink, Polygon, and Monero are projects that have grown rapidly over the past year. While each of these projects is very different in the utility it provides, each network provides investors with unique upside to the growing decentralized finance (DeFi) world.
Those in the crypto world looking for projects that benefit from rising blockchain usage for utility-focused projects like where these tokens are headed. However, today's macro environment has stopped these major tokens in their tracks. Today, investors appear to be pricing higher levels of risk than what we've seen in a long time into such growth projects.
Now what
Whether we're talking about oracle networks, scaling solutions, or privacy tokens, it doesn't really matter. The market has spoken, and high-growth assets across a range of markets are being sold off today. This macro move is indiscriminate, and one that is hitting cryptocurrencies just as hard as stocks today.
For those who consider cryptocurrencies a meaningful market hedge, today's price action doesn't point in the right direction. Cryptocurrencies and higher-risk equities have traded in higher correlation of late, suggesting certain cryptocurrencies and tech stocks may have charts that look very similar. For those looking to de-risk their portfolios, that's not a good thing.
