False BlackRock XRP Trust application documents cool down the crypto market, but the fundamentals remain strong and unaffected

Misleading BlackRock XRP Trust Application Documents Cause Crypto Market Fluctuations, Yet Strong Fundamentals Remain Intact

Summary: Jordan, LianGuaiNews

Influenced by the false BNY Mellon XRP Trust Fund application incident, the cryptocurrency market has cooled down.

On the evening of November 13, the website of the Corporate Division of the State of Delaware in the United States released a registration document called “iShares XRP Trust,” which contained detailed information matching that of the similar documents of BNY Mellon, including the name and address of its registered agent. After this news was disclosed, the XRP price quickly surged by 10%.

However, shortly after the disclosure of the “iShares XRP Trust” registration document, the incident took a turn. BNY Mellon quickly clarified that they did not attempt to launch an XRP ETF, and the circulating BlackRock XRP document “iShares XRP Trust” was fake and had no relation to the company.

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After this news was confirmed, XRP gave back all its gains.

The false information further shook the cryptocurrency market, causing short-term sharp declines in multiple altcoins:

• SOL, which was the leading gainer among altcoins, had previously doubled in price within a month but declined by 8% in the past 24 hours.
• LINK and AVAX both declined by more than 10% and 13% respectively.
• ADA, Polkadot (DOT), and DOGE declined by 5%-7%.
• The native token FTT of the bankrupt exchange FTX declined by approximately 3.5%, but it still rose by over 215% in the past month.

As for mainstream coins:

• BTC dropped to its intraday low, with a 24-hour decline of 1.7% at the time of writing this article, reaching around $36,500.
• ETH gave back its earlier gains, showing no change in the past 24 hours and staying above the key level of $2,000.

Despite the fluctuations, the fundamentals of the cryptocurrency market overall remain strong

Last week, analysts at JPMorgan warned in a report that the cryptocurrency rally, mainly driven by expectations of the approval of a spot BTC ETF, seemed somewhat “overdone” as investors were overly optimistic about the prospects of new capital entering the digital asset space. However, there are different views in the market as well. Lucas Outumuro, Head of Research at IntoTheBlock, believes that despite short-term signs of overheating and volatility in the market, the fundamentals remain strong overall, with strong on-chain activity indicating that the cryptocurrency winter is over.

According to data from CoinShares, traders have invested over $1 billion in Bitcoin in the past seven weeks (as shown in the chart below), which could indicate that the recent rebound in the cryptocurrency market is different from occasional short-term rallies during the bear market. If we extend the timeline a bit, we can see that Bitcoin has seen a 37% increase in November. CoinShares analysts pointed out that the trading volume of Bitcoin exchange-traded products (ETPs) accounts for 19.5% of the total trading volume on trustworthy exchanges, which is a rare occurrence. This suggests that one of the reasons for the current cryptocurrency market rally, compared to 2020, is likely the increased participation of ETP investors.

Fundamental factors of other cryptocurrencies are also starting to improve:

• A recent investigation by the French AMF shows that young investors in the country are becoming more interested in digital assets rather than stocks, with over 9% of French people already owning cryptocurrencies and around 2.8% holding NFTs.

   

  

• The US Consumer Price Index (CPI) data is scheduled to be released before the opening of the US stock market on Tuesday. The Consumer Price Index is an important economic indicator that measures the level of price changes of a basket of goods and services, providing insights into inflation trends. The timing of this CPI data release is particularly significant as it occurs one month before the next Federal Reserve interest rate decision meeting, where decisions regarding monetary policy will be made. These decisions have a significant impact on market dynamics, especially in the context of recent inflation concerns. However, based on the current situation, the market expects that the Federal Reserve is unlikely to further raise interest rates. This expectation is based on recent economic indicators suggesting that inflationary pressures may ease, which could have a major impact on financial markets, including the cryptocurrency industry, as it could lead to a change in investor sentiment and risk appetite.

Summary

From macroeconomic, technological, and other factors, the cryptocurrency market may be awaiting a new round of recovery. Despite the short-term volatility caused by the false BlackRock XRP Trust Fund application incident, the market seems to be moving in a positive direction based on the current overall trend.

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