Empire Newsletter Segment

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It’s a bloodbath, no matter where you look.

And unfortunately, there’s no denying equities and crypto are interconnected this time around.

ETH’s trading just a few hundred dollars above where it was around the time FTX collapsed in November 2022, while bitcoin’s maintained a sizable distance from that figure (a cool $65,000 above where it was at the time of the collapse, if you want a positive number).

A Look at ETH

Justin Barlow, head of BD & Investments at Sei, told me it’s hard to pinpoint any bottom, not just the bottom, but right now, we’re very much tied into the macro narrative.

If sentiment were to flip, then he wouldn’t be surprised if crypto changed its tune and we started to see more green pop up on various charts.

“If you look at historical correlations between the equities market and crypto, it’s seemingly increased over time as crypto becomes more and more mainstream. And I think that’s to be expected right now: You have a lot of the big names that are active in traditional markets, very active in crypto markets, and naturally, when they want to be risk off, that translates into not just obviously equities, but the crypto market as well,” Barlow explained.

Basically, when things are good, having BlackRock and other big financial giants in the space is great. But when things go sideways, well, crypto’s one of the first trades that gets cycled out.

In the short term, this leaves crypto in a bad spot. Continue to expect a bit more pain until there’s more favorable economic data, but this doesn’t change the thinking that, long term, crypto is still looking strong.

This is just one of the first cycles, Barlow said, where we’re seeing the mesh of traditional financial institutions and crypto play out.

“Not to say that there aren’t opportunities for crypto to diverge from traditional markets, but it’s certainly a factor, particularly for some of the larger assets,” he added.