Crypto Growing in Latin America Adoption: New Economy Update

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Good morning. Here’s what’s happening:

Prices: Bitcoin recovers somewhat; most other cryptos are in the green.

Insights: KuCoin will use part of its $150 million capital raise to increase DeFi activity on its blockchain.

Technician's take: BTC appears oversold, although trading conditions have been choppy over the past few days.

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As improvement goes, bitcoin didn't have much about which to crow on Thursday. The largest cryptocurrency was still struggling to remain above $30,000, and well off where it was trading as little as two weeks ago.

But the largest cryptocurrency by market capitalization did a little better than ether and other major altcoins.

Bitcoin was recently changing hands at around $30,200, up more than 4.4% over the past 24 hours. The increase outperformed ether, which rose a little more than 3.5% during the same period, and other cryptos, most of which also registered smaller gains as investors continued to prefer the best-known digital asset over smaller, riskier ones. XRP, SOL, ADA and MATIC rose less than a percentage point. AVAX was among the losers, recently dropping more than 3%.

Still, the flavor of the market remained sour with investors continuing to chew on the triple whammy of inflationary pressures, central bank missteps and the looming prospect of recession. Altcoins have largely trailed bitcoin amid the mushrooming economic uncertainty in recent months. For the past 90 days, only 15% of the top 50 altcoins have outperformed bitcoin, according to the Blockchain Center, a provider of crypto data. The trend reflects the current risk-off environment.

Gold, a traditionally safe haven for risk-averse investors, rose more than a percentage point.

Equity markets? They fared a little worse than cryptos but improved on their previous day's bloodbath. The S&P 500 fell by less than a percentage point after finishing Wednesday with its largest percentage decline since June 2020. The index's 18% tumble from its most recent high remains perilously close to the 20% drop that merits bear market designation. The tech-heavy Nasdaq, which reached bear market status earlier this year, fell slightly on Thursday.

Stocks' big plunge on Wednesday reflected disappointing first quarter sales by retail giants Target (TGT) and Walmart (WMT). On Thursday, Kohl's (KSS), the largest department store chain by number of locations, added to the retail sector's woes with its own downbeat report and provided the latest evidence of inflation's growing impact on consumer spending. Meanwhile, U.S. home sales fell last month, a sign that higher mortgage rates triggered by the U.S. Federal Reserve's more hawkish monetary policy, along with record high prices, was slowing the once hot-housing market.

"Results from Walmart and Target this week have brought into sharp focus the plight facing companies and consumers as inflation begins to bite," Oanda Senior Market Analyst, U.K. & EMEA, Craig Erlam wrote in an email. "Inflation is catching up and profit margins are taking a hit. Soon enough, though, those higher costs will be passed on and consumers will start being more careful with their spending. There's a feeling of inevitability about the economy, the question is whether we're going to see a slowdown or a recession."

Yet Erlam struck a positive note about bitcoin remaining at the $30,000 level. Bitcoin is holding up surprisingly well against the backdrop of pessimism in the markets," Erlam wrote. "Perhaps because it's fueled by economic concern rather than simply interest rates."

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