Bitcoin is shrugging off a downgrade of U.S. government debt by Fitch, with the world’s largest digital asset up 2.2% and Ether up 0.8% as markets in the East open in the red. The CoinDesk Market Index (CMI) is up 1.43% to 1,286. Despite the downgrade, companies are reporting relatively positive earnings, which is why the market doesn’t seem to be as panicked as it was in 2011 when S&P downgraded U.S. debt.
CoinDesk Indices Head of Research Todd Groth explained why bitcoin dominance waned in July after gaining ground the previous month. What it basically did was allow for a lot of the altcoins to catch up with where bitcoin was, and even Ethereum relative to the small-cap universe, Groth said.
Back in 2011, bitcoin wasn’t really a mature asset class, and there wasn’t the same trading volume, making the quality of correlation to macroeconomic events poor. On August 6, 2011, it was down 33% to $6.6, but the next day it jumped by 20% to $7.9. Although, between the two days, there was only $200,000 in trading volume.
MicroStrategy reported its second-quarter earnings after the close on Tuesday, booking an impairment charge of $24.1M on its massive bitcoin holdings. GameStop also announced it will remove its iOS and Chrome wallet extensions on Nov. 1, citing ‘regulatory uncertainty’.
The Ordinals Team is creating a non-profit to support Bitcoin NFT developers, and DeFi protocols are shoring up defenses in response to the potential systemic risk posed by Michael Egorov’s teetering financial position. Binance Japan has also started onboarding users.