LMAX Digital volumes held mostly steady in Wednesday trade. Total notional volume for Wednesday came in at $535 million, 12% above 30-day average volume. The volume was led by a pickup in bitcoin activity, which is encouraging, on the expectation that bitcoin will be the crypto asset to lead the market back into recovery.

Bitcoin volume printed $348 million on Wednesday, 28% above 30-day average volume. Ether volume came in at $157 million, just 5% below 30-day average volume.

Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $8,408 and average position size for ether at 3,201.

Volatility has been absent from the market for much of 2022 and is still trending down at yearly low levels. We’re looking at average daily ranges in bitcoin and ether of $924 and $111 respectively.

We’ve spent a lot of time this week talking about how correlations between crypto assets and risk sentiment haven’t quite been as strong. Earlier in the month when stocks were rallying hard, crypto failed to join in, and more recently, when stocks were falling back, crypto held steady.

We believe this to be a positive sign, as it helps to highlight the lure of an asset class that offers itself as a legitimate diversification option. Having said that, these correlations haven’t completely fallen by the wayside. Risk assets are very much in demand on this Thursday, perhaps being helped along by the latest China stimulus package. And this is helping to bolster crypto as well.

Another interesting thing about crypto in 2022, and perhaps another positive, is the fact that volatility in the asset class has come way down. Average daily ranges in the prices of bitcoin and ether are probably looking more palatable to the institutional investor, and a closer look at 30-day price performance across all major assets shows bitcoin and ether trading in line with the others.

Interestingly enough, when looking at 30-day performance of a block of major assets including currencies, stocks, commodities, and cryptocurrencies, bitcoin and ether are on opposite ends, but also relatively in line with everything else. Ether is outperforming all major assets over the past 30 days, up some 7.5%, and just above US equities which are up 5.3%. Bitcoin is on the other end of the spectrum, down 4.48% over the past 30 days, just a little more than the Euro, which is down about 2.5% over this time.

So on net, correlations have broken down some more, which makes things more attractive for portfolio managers looking for diversification alternatives, and volatility has come down quite a bit, also presenting as an asset that can be managed with greater ease and less stress relating to excessive movement that could undermine the potential for these assets to be traded on an institutional level.