Bitcoin, after suffering one of its worst-ever starts to a year, came back strong in March with a 9% gain, almost completely reversing losses from earlier in 2022 and outperforming U.S. stocks while leading a rally across broader digital-asset markets.
Alternative cryptocurrencies known as altcoins also boasted gains, and some even outperformed bitcoin, with ether (ETH), the native token of the Ethereum blockchain, pushing a 15% increase.
Michael Safai, managing partner at Dexterity Capital, a trading firm focused on digital assets, noted that the volatility driven by macroeconomic and geopolitical uncertainty at the start of March began to stabilize during the month,
Bitcoin dipped to lows of $37,000 in early March, but has made a recovery over the last two weeks, rallying to above $48,000. Ethereum traded in a range of $2,445 to $3,472 in March.
“Tokens were freed again to move based on their merit, rather than the risk-off attitude that tends to push all coins in the same direction,” Safai said in an interview with CoinDesk.
Because altcoins often trade in sync with bitcoin, BTC’s rally in March has perhaps helped push up a diversified range of crypto assets. Among the top 10 coins with a market values above $1 billion, Solana, Terra and Cardano boasted 27% monthly gains. Avalanche’s AVAX, meanwhile, was up 15% in March.
Contributing to Solana’s and Cardano’s performances in March was the growing mainstream curiosity about the launch of Ethereum 2.0, which has encouraged traders to move back into layer 1 tokens, according to Safai. He said that although markets got thrown off in February by the war in Ukraine, coins from layer 1 networks have had momentum behind them for some months.
“As things settled in March, these coins stood their ground because of their fundamentals (AVAX as well). But they got an extra pop from all the ETH 2.0 buzz as well,” Safai said.