Ethereum, meanwhile, has been designated as “the worst performer after the long-awaited merger turned out to be an event “buy the rumor, sell the news“.” The increase in tether and U.S. dollar trading volumes for bitcoin would suggest that panicked investors were dumping the depreciated currencies in favor of the crypto-currency.
Ethereum experiences its biggest drop ever
According to Cryptocompare’s latest report, bitcoin, which posted a negative 3.11% return in September, still outperformed “The S&P 500 and Nasdaq indices, which posted negative returns of 9.34% and 10.5%, respectively“. Only Solana – the crypto-currency among the four tracked that had a positive monthly return of 5.59% – and gold (2.87%) had better risk-adjusted returns than bitcoin.
Ethereum, on the other hand, is identified in the report as “the worst performer” after the long-awaited merger turned out to be a ‘buy the rumor, sell the news’ event.“
To support this claim, the report highlights the contrasting fortunes of the crypto asset in August and September. After posting its best risk-adjusted returns in August, ETH again experienced “the biggest drop“in September, the same month that the Ethereum blockchain switched to a consensus mechanism”proof-of-stake” (PoS).
Traders abandoned currencies and flocked to the dollar.
In terms of the volatility of the various assets, the report said bitcoin was “the least volatile and most dominant asset” among the four crypto-currencies tracked in September.
The report explains the study’s findings on crypto-currency market volatility:
Volatility in the crypto-currency markets saw a slight increase in September amid interest rate spikes and the unstable macroeconomic environment. ETH and SOL remained the most volatile assets, with 30-day volatility of 80.0% and 82.6% respectively. Bitcoin’s volatility rose 19.2% in September, breaking a downward trend that began in June.
Meanwhile, Cryptocompare’s review of the next two asset types USDT and U.S. dollar trading volumes suggest that panicked investors were dumping depreciating currencies in favor of the European currency. In the month of September alone, both tether and greenback traded volumes increased “by 15.4 percent and 15.1 percent respectively.“
According to the report, this could mean that ” market participants are piling on to BTC “following recent volatility in fiat currencies, including the British pound and Japanese yen.”
In contrast, USDT volumes for ETH over the same period “experienced a sharp decline of 49.4%.“, while SOL experienced “a notable 10.5% increase in USDT in September“. Both ADA and SOL experienced a decline in USD volumes.