Bitcoin, Ethereum, XRP Drop Further. Why Cryptos Aren't Following Gold's Risk Ramp. — Barrons.com
By Callum KeownBitcoin, XRP and other cryptocurrencies were struggling for direction early Wednesday. Hopes of a year-end rally are fading fast.Jobs data Tuesday failed to kick-start the comeback and the catalysts are quickly running out ahead of the holiday period.Bitcoin was trading at $86,517 early in the day, down 0.6% over the past 24 hours, according to CoinDesk data. The world's largest cryptocurrency is having a tough December, down 5% for the month and more than 30% off its record high of nearly $127,000 reached in early October. XRP was down 0.4% at $1.9 and Ethereum fell 0.9% to $2,922.In contrast, the price of gold — with which Bitcoin has often been compared — is up more than 2% this month and has climbed 12% since the start of October. Cryptocurrencies are more closely matching technology stocks — the tech-heavy Nasdaq Composite is down 1% in December.However, over the year as a whole it isn't performing like either — gold prices have gained 65% and the Nasdaq is up 20%, while Bitcoin is down 7%."We link Bitcoin's weakening with a renewed turn toward risk aversion. We also see the relationship with U.S. technology stocks tightening again, with crypto moving in the same direction," analysts at crypto firm B2BINPAY said. "That tells us BTC is still behaving like a risk-sensitive asset in the short term. It's so far not an independent hedge as many claim," they added.Their base case is for Bitcoin to test the $80,000 to $82,000 range, if risk aversion persists. Calmer conditions in the stock market could boost the crypto back to $95,000.But that more bullish scenario is still a long way off its record high and crypto investors may need to accept it isn't going to be the holiday season they hoped for.Write to Callum Keown at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.