Asia stocks open soft, Bitcoin leaps past $30K on MicroStrategy filing and despite Fitch Treasury downgrade

Good morning. Here’s what happens:

Prices: Bitcoin shrugs off US sovereign debt downgrade from Fitch.

Insight: How quickly times change. Bitcoin dominance declined in July after a surge in June. CoinDesk CDI Head of Research Todd Growth explained why.

Bitcoin tops $30K after debt downgrade, MicroStrategy filing

This downgrade comes at a time when companies are reporting relatively positive earnings, so the market does not appear to be as panicked as it was in 2011 when S&P downgraded US debt.

Back in 2011, bitcoin was not really a mature asset class and there was not the same trading volume, which made the quality of the correlation to macroeconomic events poor.

But how did it work when the downgrade happened?

Mixed. On August 6, 2011 it was a decrease of 33% to $6.6, but the next day it jumped 20% to $7.9. Although between the two days there was only $200,000 in trading volume.

A Decline in Bitcoin Dominance in July

Bitcoin dominance waned in July after gaining ground the previous month, CoinDesk Indices head of research Todd Groth told “First Mover” TV hosts on Tuesday.

Groth tied the reversal to an absence of the kind of catalysts that drove bitcoin’s price dramatically higher in June and Ripple’s partial victory last month in an ongoing lawsuit with the Securities and Exchange Commission (SEC) that gave support to altcoin investors. The decision in the US federal court found that the sale of Ripple’s XRP tokens on exchanges and through algorithms did not constitute investment contracts and raised hopes that the SEC could not consider other tokens as securities.

“What it basically did was allow a lot of the altcoins to catch up to where bitcoin was and even Etherium in terms of the small cap universe,” Groth said.

In the days following the ruling, Coinbase, Kraken and other exchanges reinstated or announced plans to reopen trading of XRP and trading of the token. Meanwhile, bitcoin settled steadily lower to end July at 5%, the second monthly decline in an otherwise upbeat year. The BTC dominance rate in July dipped below 49% in July after rising above 52% in late June. The CoinDesk Market Index fell only about 1%.

“It was really driven by the computing sector, DeFi and digitization, which has small tokens compared to currency and smart contract platforms, where bitcoin and Etherium exist,” Groth said.

The exploit at DeFi giant Curve Finance has driven the price of their CRV token down, putting a $168 million of founder Michael Egorov’s money at risk of liquidation. BlockSec co-founder Yajin “Andy” Zhou joined the conversation. Todd Groth, CFA, CoinDesk Indices Head of Research, discussed how the crypto markets fared in July. And Koray Caliskan, author of “Data Money” shared his thoughts on the future of crypto regulation.

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