Never Mind Bitcoin (BTC): These Cryptocurrencies Are On The Rise
coinputin.com – The increase in bitcoin (BTC) that has begun in recent weeks may seem overly speculative. Still, some of the other cryptocurrencies performed better than BTC.
Bitcoin has been on the rise in recent weeks, reaching an all-time high of just under $ 20,000. However, Ethereum-the second largest cryptocurrency after Bitcoin – experienced a serious rise, while XRP, the third largest cryptocurrency, started a serious rally.
With bitcoin’s rally, Litecoin, Polkadot, Cardano and Stellar, among the top 10 cryptocurrencies, also made bigger gains than Bitcoin. Greg King, chief executive of Osprey funds, a firm that invests in digital currencies, said::
“Part of what happened was simple math. Smaller cryptocurrencies can have bigger [percentage] moves, and there are a lot of other cryptocurrencies that people can invest in.”
Bitcoin is significantly larger than other cryptocurrencies, often referred to as altcoin. The current value of all bitcoin in circulation is about $ 350 billion. Ethereum’s value is just under $ 70 billion, while XRP is about $ 30 billion. Litecoin, the fifth largest, is valued at under $ 6 billion. “It makes sense that investors have a portfolio that includes long-term Bitcoin and Ethereum, and some of the others are in the basket for trade,” King said.
A Consequence Of The Economic Environment
Low rates and a weakening dollar heralded a rise for all cryptocurrencies. But these small cryptocurrencies are, to some extent, able to sustain the hype that has lifted Bitcoin to a new record. Bitcoin is taking advantage of the weak dollar narrative, with the expectation that long periods of super-low interest rates will eventually generate inflation. This, in turn, increases the appeal of the digital currency. “The boom in cryptocurrencies is a result of the economic environment,” says Michael Shaulov, CEO of digital asset security firm Fireblocks.
Shaulov adds that interest in so-called stablecoins such as Tether and Paxos is booming. The CEO also said the upcoming launch of Facebook (FB) – backed stablecoin Libra, which is in the process of being rebranded as Diem, could lead to average consumers using cryptocurrencies.
Why Are Investors Turning To Altcoins?
According to the article in CNN business, investors may also be turning to other cryptocurrencies because they fear that Bitcoin has become a very popular trade. “The one thing I think you’re going to see more and more is that people understand that when you only invest in one asset, you have concentration risk,” said Brad Garlinghouse, Chief Executive of Ripple, the company behind XRP.
In an interview with CNN’s Julia Chatterley the previous day, Garlinghouse said::
“Diversification is important. Diversification reduces risk.”
“Ethereum Will Outperform Bitcoin”
Other experts agree that investors can’t just invest and trade in Bitcoin. “I can see a scenario where Ethereum could potentially outperform Bitcoin in the next year or later, ” Rachid Ajaja, CEO and founder of AllianceBlock, said in an email to CNN Business. XRP is finally out of the downward trend, ” he said.
While many cryptocurrencies have been doing well lately, some are still well below their peak: unlike Bitcoin. So they can have more room to grow. Nicholas Pelecanos, head of trading at blockchain firm Nem, said Ethereum was trading at around $ 600, well below the all-time high of $ 1,400 as of early 2018:
“There has been more demand from the main financial managers about cryptocurrencies, and the real question is what the relative value of these altcoins compared to Bitcoin is. There are probably more pros in Ethereum than in Bitcoin.”
Guy Hirsch, US Managing Director of eToro, a brokerage and trading company, added that there has been more interest in Ethereum and XRP recently as they have gained “greater recognition and credibility.”
Some of the smaller cryptocurrencies could rise further, according to analysts and cryptocurrency commentators. Digital tokens such as VeChain, Terra and Compound each rose more than 25% last week.
“The Big altcoins all started out as small coins,” don Guo, CEO of Broctagon Fintech Group, said in a statement sent to CNN Business.:
“If the crypto market is bullish, we see that many small investors are actually considering investing in smaller currencies to win the big jackpot.”
This could be a healthy sign for the broader cryptocurrency market. It’s similar to how equity market investors realize they need to invest in small-cap stocks, not just in the giant FAANG technologies that dominate the S&P 500 and Nasdaq.
Denis Vinokourov, head of research at BeQuant, the main broker of digital assets, said::
“There is more to the cryptocurrency market than Bitcoin, just as there is more to the stock market than Apple.”