The rally in the
crypto market is stumbling, following stock markets as there are no real
fundamental drivers to support it. Instead, there are many negative factors
surrounding the market now connected to the high interest rates that the
Federal Reserve (Fed) has set on the highest level for the last 15 years, and
layoffs by big techs.
Some investors are
taking into consideration the less hawkish comments made by the Fed’s Chief
Jerome Powell, as well as the monetary watchdog itself, after it raised
interest rates only by 25 basis points in February. However, the Fed continues
with its monetary tightening as high inflation still dominates the economy and
recession fears are still very much present. Perhaps, interest rates would rise
at a slower pace, but it would not mean they will not be on high levels for
quite a long time. The recession may come gradually so there may not be time for complacency as the debt yield curve
is inverted and bubbles in the real estate market are threatening the economy
amid rising borrowing costs.
Balance co-founder,
Ric Burton, accused Uniswap crypto exchange founder, Hayden Adams, of violating
his obligations as Burton owed money to Adams for supporting Uniswap and
helping it get off the ground. Burton said he gave $25,000 to go towards the
team of developers during Uniswap’s infancy without any written
obligations. He also claimed that he introduced the Paradigm investment. Burton said that
Adams had verbally agreed to repay him from Uniswap’s investment funding. In
this case the potential share of Burton could be at $18 million. However, there
are minor chances that Burton can get any kind of compensation from Uniswap.
Fox Sports has banned
any crypto advertising during the upcoming Super bowl, the most wanted sporting
event for advertisers. Last year they spent $54 million for advertising during
the event, including FTX crypto exchange that collapsed recently.
Nevertheless, a new
rally in the crypto market could emerge sooner or later and investors are
looking for the drivers that may indicate this. Primary blockchains are
unlikely to become such a driver. Investors were betting on native tokens, like
Solana, Avalanche, Near, Harmony, Fantom, Elrond, Polkadot, and some others,
hoping that they may become the new and better Ethereum with advanced
technology. But project teams were mostly seeking security and community, and
not to replace other cryptocurrencies. So, few investors are using the networks
of these projects now. Second layer blockchains, like Optimism, are getting
more attention now, while large projects, like dYdX, are focused to only use their
own networks. So, second layer project tokens could become growth drivers as
they may rally faster than any infrastructure project tokens.