Altcoins are not dead.
The explosive surge in the alternative crypto market of $ 56 billion this year has puzzled skeptics. Native tokens from controversial blockchain projects like Bitcoin Cash and Bitcoin SV grew 130 and 280 percent, respectively. An underdeveloped Ethereum has gained 95 percent.
Meanwhile, XRP, whose longtime owners accused its issuing company Ripple of crashing the token, is trading 54 percent higher. EOS, which has been criticized for overly controlling its so-called “decentralized blockchain”, has also increased by more than 100 percent.
Crypto market capitalization (excluding Bitcoin) | Source: TradingView.com
In total, there are more than 5,000 crypto tokens that have suddenly woken up and delivering double – and in some cases even triple – profits.
At the same time, the original cryptocurrency Bitcoin appears to be dwarfed. The idea of Satoshi Nakamoto has risen only 46 percent – despite its growing importance as a safe haven on Wall Street.
Search for risks
So it appears that altcoins are attracting capital from two markets: one in Bitcoin and the other in US dollars.
All of the leading cryptos have seen massive gains over Bitcoin lately thanks to the liquidity offered by hundreds of large and small crypto exchanges around the world. Apparently, this has driven up the prices of altcoins in the dollar markets, making them even more attractive to institutional investors or venture capitalists willing to increase their risk appetite.
The reason is the coronavirus. The epidemic in China has cost more than 1,000 lives and infected more than 40,000 people around the world. It has also left a dent in global stock markets, causing investors to seek refuge elsewhere.
As a result, gold retains gains against a stronger US dollar, easing-backed stocks rise, and bitcoin – an unusual asset in the eyes of many Wall Street veterans – also rises.
Mati Greenspan, the founder of Quantum Economics, said in an interview with BlockTV that investors are trying to invest in riskier assets – which can produce more returns in less time. That’s the same reason why Bitcoin, whose volatility recently approached its all-time low, underperforms competing cryptos.
“The proof of this is the altcoin season,” said Mr. Greenspan. “Altcoins have been outperforming Bitcoin in everyday life pretty much consistently since the beginning of this year […] That means investors want to take risks, which is very different from safe haven trading. “
Bitcoin correction is good for other crypto tokens
Well-known analyst GalaxyBTC said today that a bitcoin correction could next trigger a hysterical price spike in the altcoin market.
And no, I am not speaking in USD, but in BTC.
The one that actually counts.
– Galaxy (@galaxyBTC) February 12, 2020
His comments followed Bitcoin’s move towards $ 10,500 this Wednesday, making the cryptocurrency its most overbought since December 2017. Full-time crypto retailer CryptoHamster also noted that there isn’t a clean high on the short-term Bitcoin charts, adding that the cryptocurrency could correct.
“Without continued growth, some bearish divergences could emerge. If it happens, a new one [bitcoin] Correction would very likely begin, ”he tweeted.
That has made altcoins wait for their next explosive upward move.