Will Crypto Rise Again
Less well-known cryptocurrencies are seeing stronger upside momentum than market leaders like Bitcoin and Ethereum.
Bitcoin and Ethereum are two cryptocurrencies with a combined value accounting for nearly two-thirds of the total $1.6 trillion in market capitalization worldwide. According to research site CoinMarketCap, there are many other alternatives to Bitcoin and Ethereum on the cryptocurrency market. This number goes up to over 10,000 and those coins are also known as altcoins.
Cardano doubled in price in August and became the third largest digital asset by total market value. Binance Coin also increased sharply. Another cryptocurrency called Avalanche has tripled in value this month.
The question is, what caused this euphoria? Some argue that speculators are shifting from traditional investment assets to newer, more attractive asset classes. Another opinion is that, because the world is flooded with cash and interest rates are super low, that has pushed investors to look for even more expensive assets.
Yoni Assia, founder and chief executive officer of online exchange eToro, said the “euphoria” in the crypto market is reflected in numbers like total trading volume or growth rate. of companies in the industry.
This expert cited a series of events that contributed to the effect of cryptocurrencies, such as interest rates bottoming around the world and massive fiscal stimulus efforts that have led to many people having more funds. surplus during the pandemic.
Some of that money was used to invest in cryptocurrencies and related assets, such as shares of cryptocurrency mining companies. According to the results of a survey of more than 1,000 US adults by The Harris Poll, about 15% of Americans who received government COVID-19 assistance payments in the first two stimulus packages had invest part or all of this amount. And about half of this investment is "poured" into cryptocurrencies.
eToro CEO Yoni Assia also pointed out that inflation is likely to pick up as economies reopen, which again highlights "warnings" of a possible hyperinflation cycle. happen. This is also the reason why many people are looking for different types of investments.
Recent statistics also show that the downloads of cryptocurrency trading applications are increasing. According to App Annie, a mobile data analytics company, cryptocurrency trading platform Coinbase Global ranks 11th in downloads among financial apps on Apple's app store. In August of last year, the app only ranked 23rd on average. Other digital exchanges like Kraken, Voyager and Crypto.com all moved up the ranks.
Michael O'Rourke, head of market analysis at investment firm JonesTrading (USA), commented that the younger generation are the dominant players in the cryptocurrency market, and they tend to look for assets. without being closely regulated by the central bank or government.
Data from data tracking company CryptoCompare shows that, since July 2021, the value of digital assets under management of investment funds has increased by more than 57% to about $55 billion. Average daily trading volume increased by more than 46% to $544 million, the biggest monthly increase since May 2021. Investors are focusing their attention on altcoins like Cardano, Avalanche, and Dogecoin.
In addition, the "fever" in the art world of NFT (Non-Fungible Token) is attracting the attention of investors and finance. NFT is a type of digital asset, using blockchain technology to assert the unique, inimitable value and ownership of the owner of this work.
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In fact, the traders who are making all that money didn’t even need a computer
Although Bitcoin is also blockchain-based, Bitcoin is fungible, meaning that one Bitcoin is essentially indistinguishable from another and they are equivalent in value. Whereas, NFT is an irreplaceable sequence of codes and so NFT can represent "one-of-a-kind" things. That is also the reason that NFT works have a "heavenly" price.
Sam Bankman-Fried, CEO of crypto exchange FTX commented, the strong growth of the NFT market has helped to "revive" the crypto market and the slump in May 2021. stepped back.
With the major stock indexes on Wall Street continuously recording new highs, cryptocurrencies also benefited when the stock market "sublimated".
According to Wei Liang, an expert at investment bank DBS (Singapore), in the period 2016-2019, the correlation between Bitcoin and the S&P 500 index is generally very small. But starting last year, that changed. In the context of the pandemic, the value of Bitcoin and the US stock market have simultaneously decreased and recovered together.
Mr. Wei Liang emphasized, historically many people said that they buy stocks as a measure against inflation, now that concerns about inflation and money supply have once again surfaced, cryptocurrencies have also become a Investment properties are so sought after.
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