Crypto Markets Started Running Behind the Fed
In 2021, Bitcoin reacted to major macroeconomic news in a similar manner to Gold and EUR prices. According to the recent research “Are Cryptocurrency Markets Running Behind The Fed? A significant shift in crypto markets microstructure” published by GrinisRIT and Finery Markets, 2021 became a year when crypto markets significantly adjusted it’s behavioural patterns, showing an increasing institutional influence.
The paper came with 2 major conclusions:
- In contrast to recent research, it was noted that BTC/USD was sensitive to major Fed policy announcements in Q2-Q3 2021 similar to main asset classes: commodities, equities & currencies.
- OTC liquidity providers tend to provide twice as narrow spreads in comparison to major Centralised Crypto Exchanges during market volatility related to macroeconomic news.
The report analyzed data from major exchanges like Binance, Kraken, Coinbase and Bitstamp and global OTC desks including DV Chain.