March turned out to be a good month for the cryptocurrency market, with bitcoin surging over 21%, while other cryptocurrencies also recorded impressive gains. XRP, Stellar’s XLM token, and Injective Protocol’s INJ token recorded gains of 41%, 26%, and 34%, respectively. In contrast, Chain’s XCN token in the CMI’s Currency sector was among the biggest losers, plummeting over 53% in March, media reports said.
Encrypted messaging protocol Network’s native token, MASK, emerged as March’s top-performing asset, surging 68% to trade at $6.30. Reports indicate that the price surge followed the withdrawal of around 3.6M MASK tokens, worth about $14.8 million.
The good performance of BTC and other cryptocurrencies in March came amid significant macroeconomic headwinds and bank failures. The surge of $29,100 mark as been attributed to the current macroeconomic landscape, which has favored ‘alternative money’ such as gold and BTC, traditionally viewed as safe-haven assets.
According to Greg Magadini, the head of derivatives at Amberdata, a crypto analytics company, March witnessed a significant surge in volatility for both BTC and gold, indicating a growing interest in alternative currencies and a possible sense of sense of unease about relying solely on USD holdings.
Nonetheless, the crypto sector faced a major setback as crypto-supportive banks, Silvergate and SVB, went bankrupt, and a series of regulatory crackdowns ensued. The US Commodity Trading Commission (CFTC) sued Binance, the biggest cryptocurrency exchange by trade volume, and its creator Chengpeng Zhao for purportedly breaking regulations. Despite these obstacles, cryptocurrencies remained relatively unscathed, with the stablecoin market bearing the brunt of the impact.
According to Ben McMillan, the investment officer of IDX Digital Assets, institutional investors are most worried about regulations in the cryptocurrency market. McMillan said regulatory uncertainty has been a bigger concern for institutional investors than market volatility. Nonetheless, the market is holding up well, with the CoinDesk Index being the month’s largest winner having a 21% gain. It is followed by a 9% advance of the Smart Contract Platform sector.
Looking forward, Stefan Rust, a crypto investor, and CEO of data-sharing platform Sonic Capital, believes that the crypto market will continue to grow, with an estimated 20% of institutional investors planning to increase their exposure to cryptocurrencies in the next year. Rust noted that the crypto market is still relatively small, with a market capitalization of around $2.5 trillion, making it ripe for investment opportunities.