Fear crept back into the crypto market on Wednesday as the industry faced more uncertainty around its future. News events weren't dire, but a drop in the tech sector today was enough to cause a sell-off in crypto markets.
At 3 p.m. EDT, Bitcoin (BTC +3.38%) was down 5.2% in the past 24 hours, while Ethereum (ETH +10.10%) was off 3%, and Dogecoin (DOGE +6.59%) was down 5.2%.
CRYPTO: BTC
Key Data Points
NVIDIA rules the day
The tech industry is once again waiting anxiously on NVIDIA's earnings report, which is due to come out after the market closes. NVIDIA doesn't have much direct impact on crypto anymore, now that Ethereum has moved from proof of work, which was largely done on NVIDIA chips, to proof of stake. But the stock is the current sentiment driver of tech and much of the market overall. So, anxiety about what the company will report is permeating the market.
While the results won't directly impact crypto, don't be surprised if crypto trades are broadly correlated with NVIDIA and tech stocks tomorrow. The industry has become more correlated with tech and growth stocks over time.
Russia's crypto trials
Bloomberg reported that Russia is testing using crypto payments to help companies in the country skirt international sanctions. One of the most powerful tools the U.S. and its allies has against countries is sanctions that keep businesses out of the global financial system. But that won't work if Russia and similar countries start to use crypto rails.
While this isn't necessarily a negative for crypto overall, it could make it less likely that developed nations adopt crypto more widely if it's being used to get around traditional financial systems.
To make matters worse, the French arrest of Telegram founder Pavel Durov could put a popular crypto communication tool into question. Telegram is popular with Bitcoin enthusiasts, and the pressure on the founder isn't seen as good for the industry.
The SEC continues its crypto enforcement
Popular non-fungible token (NFT) trading firm OpenSea also announced it has received a Wells notice from the Securities and Exchange Commission (SEC), accusing the company of selling securities. This is the latest in a long line of Wells notices received by industry participants in the U.S., and they continue to cloud the industry's future.
Ethereum is the blockchain most of OpenSea's trading was on, but NTF enthusiasts were also into meme coins like Dogecoin and larger tokens like Bitcoin. So, this isn't a positive for the industry's mainstream push.
Crypto's trading trends
The day-to-day price movement of crypto continues to follow tech and growth stocks, so it's no surprise that crypto values are down on a bad day on Wall Street.
What's more concerning is that the crypto industry can't get regulatory clarity despite the SEC losing most high-profile cases against companies. But without clarity, there won't be innovation in the industry.
I think today's move is mostly noise, but the crypto drop could continue if the tech industry pulls back in the next few weeks. Unfortunately, there aren't any fundamentals holding up the crypto market at this point.
