Summary: Crypto correlation data following Trump’s Bitcoin comments and the Facebook Libra hearings suggest that the market at large still cares more about Bitcoin than altcoins — and that it may no longer be accurate to classify Ethereum as an “altcoin.”

The cryptocurrency that may not be a cryptocurrency has put Bitcoin back in mainstream media over the past few weeks — and coin relationships within the crypto sector have shifted dramatically.

Capitol Hill has been abuzz over Facebook’s crypto initiative, Project Libra, which aims to provide billions of people worldwide with access to a cryptographically secured currency managed by a consortium of industry giants such as Uber, Booking.com, and Visa.

On July 11th, five days ahead of scheduled Senate and House hearings on Libra, President Trump felt compelled to issue a Presidential tweet about Bitcoin and Libra:

The hearings on July 16th and 17th didn’t just analyze Libra on its own terms: lawmakers also demonstrated acumen in differentiating Libra from Bitcoin. In her expert testimony before the U.S. House Financial Services Committee, CoinShares CSO Meltem Demirors repeatedly emphasized her view that Libra isn’t a cryptocurrency at all:

What [Facebook] is attempting to do is not to create a new payment system: what they’re attempting to do is to pass off this idea as a cryptocurrency, which it is not. They’re attempting to use regulatory cover to get away with doing something that would typically be regulated, which is asset management. It’s fundamentally different [than Bitcoin].

This corresponded with a curious market situation: despite not being the direct focus of lawmakers’ attention, Bitcoin became more volatile and more dominant in the overall crypto market.

The price to buy bitcoin has fallen somewhat consistently since the start of the U.S. government’s scrutiny of Libra, from $12483.97 on July 10th (before Trump’s tweet) to $9543.13 on July 17th (the day of Libra’s congressional hearings) — a decrease of almost 24%.

In the same timeframe, the volatility of bitcoin steadily increased, from 89.33% on July 10th to 100.30% on July 17th — the first time Bitcoin’s 30-day historical volatility has surpassed 100% since March 6th, 2018.