Ethereum, Bitcoin Prices Slide as Market Sheds $10 Billion
The crypto markets took a steep downward turn on Friday, with more than 90 of the top 100 cryptocurrencies posting single-day price declines. The bitcoin price dropped nearly $400 after challenging the $4,000 level earlier in the week, while the ethereum price slipped below $260.
Chart from CoinMarketCap
The total cryptocurrency market cap–the combined value of all cryptocurrencies–dropped more than $10 billion for the day. After beginning the day at about $133 billion, the crypto market cap quickly dropped below the $130 billion threshold, where it languished leading into Friday morning. At present, the total crypto market cap is about $122 billion.
Chart from CoinMarketCap
Bitcoin Price Dips Toward $3,500
Bitcoin was at the head of the retreat, dipping nearly $400 from its Thursday morning mark of $3,900. Market manipulation or not, the bitcoin price has tapered quite a bit since its early-week recovery. In the past day alone, it has dipped 6%, despite the fact that a prominent industry figure said a trusted source had told him that China will not extend its bitcoin crackdown to mining. At present, the bitcoin price is trading at a global average of $3,564, which translates into a $59.1 billion market cap.
Bitcoin Price Chart from CoinMarketCap
Meanwhile, JP Morgan CEO Jamie Dimon has taken another potshot at bitcoin, claiming that it’s “worth nothing” just a week after calling it a fraud.
Ethereum Price Dips Another 6%
The ethereum price mirrored bitcoin’s decline, dipping 6% for the day. After entering the day above $270, the ethereum price struggled to hold above that mark. Ultimately, it dove through the $260 level, too, bringing it to a current price of $257. Ethereum now has a market cap of $24.4 billion.
Ethereum Price Chart from CoinMarketCap
Bitcoin Cash Posts Double-Digit Decline
The bitcoin cash price careened downward on Friday, posting the worst single-day performance of any top 15 coin. Within the past 24 hours, the bitcoin cash price has fallen by more than $50–a 10% drop. At present, bitcoin cash is trading at $407 and has a market cap of just $6.8 billion.
Bitcoin Cash Price Chart from CoinMarketCap
Altcoins Trend Down
The altcoin markets joined in the retreat, with nearly every top 100 cryptocurrency declining for the day. Fourth-ranked Ripple saw its price fall 5% to $0.17, while Dash slid 3% to $337.
Altcoin Price Chart from CoinMarketCap
The litecoin price fell 8% to just under $46. The 6th-ranked coin now sits at just 50% of the $92 record it set on September 2.
Litecoin Price Chart from CoinMarketCap
NEM–whose single-day trading volume is just $3 million–declined 6% to $0.204, while IOTA dropped 5% to $0.484. Monero, whose price approached $150 less than a month ago, is now trading at just $85 following Friday’s 7% skid. Ethereum classic rounds out the top 10 with an 8% decline that forced its market cap below $1 billion.
Record $5,000 Bitcoin Price Triggers $13 Billion Market Sell-Off
The bitcoin price touched $5,000 this morning, ushering in a historic moment for the cryptocurrency ecosystem. Unfortunately, this achievement also triggered off a comprehensive market sell-off. Almost every major cryptocurrency–including ethereum, Ripple, and IOTA–experienced significant price decreases.
Chart from CoinMarketCap
The sell-off led to a significant crypto market cap pullback. At the height of the rally, the total value of all cryptocurrencies reached $179.7 billion–a new all-time high. However, nearly $13 billion of that has evaporated in the past 12 hours, bringing the current market cap to about $167 billion.
Chart from CoinMarketCap
Bitcoin Price Hits $5,000, then Dives
The bitcoin price crossed the $5,000 threshold on several exchanges during the early morning hours of September 2, raising the global average price to an all-time high of $4,975. Unfortunately, the bitcoin price did not sustain that level for long. By 3:30 UTC, the bitcoin price had fallen to $4,800. Within another three hours, it had plunged to $4,625. Bitcoin rallied back to $4,775, but the upward momentum did not continue. By the time of writing, the bitcoin price had dropped to $4,630, which translates to a $76.6 billion market cap.
Bitcoin Price Chart from CoinMarketCap
Ethereum Price Rally Stalls
The bitcoin sell-off led to a widespread market pullback, and the ethereum price was not immune. For most of September 1, the ethereum price hovered at about $390. But once bitcoin began to fall, ethereum followed. The ethereum price plunged as low as $352 at 6:00 UTC and currently sits at $357. This reduced ethereum’s market cap to $33.7 billion–a 24-hour decline of 8%.
Ethereum Price Chart from CoinMarketCap
Litecoin Price Reaches $92 for New ATH
The altcoin markets turned red following the bitcoin sell-off, and only three top 25 cryptocurrencies made positive movement for the day.
After inching back to $600 yesterday, the bitcoin cash price dropped to $591. The Ripple price mirrored ethereum’s plight, dropping 8% to $0.231.
Altcoin Price Chart from CoinMarketCap
Litecoin was one of the rare coins with a 24-hour price increase. The litecoin price increased 6% to $80. During the past day, only bitcoin boasted a trading volume greater than litecoin’s $1.7 billion.
However, what this statistic conceals is the fact that the litecoin price had actually risen to a new all-time high of $92 this morning, meaning that it has dropped $12 from its daily peak. Litecoin now has a market cap greater than $4.2 billion.
Litecoin Price Chart from CoinMarketCap
The NEM price fell 5% but maintained a slight market cap edge on Dash, which returned a 6% decline. The Monero price, meanwhile, fell 8%, forcing its market cap below $2 billion. Tenth-ranked IOTA had the worst performance of any top 10 coin, plunging 20% to $0.678.
IOTA Price Chart from CoinMarketCap
Aside from litecoin, only two top 25 cryptocurrencies increased in value over the past 24 hours. Ethereum classic, now ranked 9th, grew 3% to $20 as part of its latter-week rally. NEO, which recently dropped out of the top 10 following a steep decline, managed to defy the wider markets and rise 5% to $33.
Bitcoin Dominance Stable for Week
Bitcoin’s slice of the total crypto market cap ended the week at 45.8%, which is just slightly below where it began. Ethereum’s share had swelled during the middle of the week but had tapered to 20.1% by Saturday. Litecoin recorded the week’s most significant gains, rising from 1.7% on August 26 to 2.5% on September 2.
Market Cap Distribution Chart from CoinMarketCap
As the distribution currently stands, bitcoin cash and Ripple account for 5.9% and 5.3%, respectively. The remaining ~20% is divided between the other 1,000 or so coins and assets tracked by CoinMarketCap
Bitcoin and ethereum continued to rally on Wednesday, pushing the total value of all cryptocurrencies higher even as the wider markets were mostly red. The bitcoin price punched through $4,500 to set a new all-time high, while the ethereum price looks poised to make a record-setting run of its own.
The total cryptocurrency market cap climbed as high as $167 billion Wednesday morning, continuing its August bull run. At present, however, the crypto market cap has tapered to $162.6 billion.
Chart from CoinMarketCap
Bitcoin Price Targets $5,000
The bitcoin price spent the latter half of August stuck between $4,000 and $4,400. As the month waned, it did not appear bitcoin was going to be able to break past this level. However, the bitcoin price defied many investor expectations by spiking from $4,400 to $4,600 at about 12:30 UTC on August 29, posting a new CoinMarketCap average record of $4,627. On some individual exchanges, the price rose even further. The bitcoin price has not yet found solid support for $4,600, which has caused it to pull back to $4,501 this morning. Nevertheless, this represents a daily gain of 3% and gives bitcoin a $74.4 billion market cap.
Bitcoin Price Chart from CoinMarketCap
Now that bitcoin has broken through the $4,500 wall, many analysts predict it will cross the $5,000 threshold in short order. RT host Max Keiser, for instance, stated that he believes it will probably reach that level this week.
Ethereum Price Inches Closer to All-Time High
All eyes were on bitcoin as it set a new all-time high, but ethereum made impressive progress on Wednesday as well. Bolstered by increases in ETH/KRW and ETH/CNY, the ethereum price climbed to $389 on August 30, its highest level since June 14. At present, the ethereum price is $367, resulting in a market cap of $36.6 billion.
Ethereum Price Chart from CoinMarketCap
Altcoin Markets Take a Hit
Bitcoin and ethereum may have been posted solid gains on Wednesday, but traders dealt the altcoin markets a blow.
The bitcoin cash price fell to 2% to $573, continuing its week-long decline. The Ripple price managed to climb 1%, thanks to news that the FinTech startup had given a presentation on blockchain trends to officials from the central bank of China. The litecoin price was mostly stable, holding at about $62, while Dash and NEM each made minor advances.
Altcoin Price Chart from CoinMarketCap
This is where the chart starts to turn red. IOTA dipped 2% to $0.828, while the Monero price fell 6% to $128, despite strong volume from Bithumb’s newly-opened XMR/KRW market.
Monero Price Chart from CoinMarketCap
The hardest hit cryptocurrency in the top 10, however, was NEO. The “Chinese Ethereum” plunged by 17% to about $31. This reduced its market cap to $1.5 billion and gives it just a $41 million edge on 11th-ranked ethereum classic.
7-Day NEO Price Chart from CoinMarketCap
Outside of the top 10, the majority of cryptocurrencies engaged in a retreat. That retreat included Qtum and Hshare, which had just entered the $1 billion club on August 29. Unfortunately, these tokens had their membership cards revoked on Wednesday as they experienced declines of 19% and 27%, respectively.
Monero Price Up 15% as World’s Largest Cryptocurrency Exchange Prepares Integration
Monero, the world’s second largest anonymous cryptocurrency, is up 22 percent again today, on August 26.
For many years, Monero has been regarded as one of the few cryptocurrencies that is highly legitimate, backed by an experienced and talented development team. It had no pre-sales or controversial mining deals for its miners. The Monero development and community have shown unity since it forked off from Bytecoin, with almost all of its hard forks executed without any contention amongst developers, community members, industry and miners.
Yet, it has struggled to see an increase in its value. It was pushed out of its top 10 largest cryptocurrency spot and was overtaken by Dash, another anonymous cryptocurrency. A large factor of Monero’s struggle in obtaining an active consumer base and trading market has been the lack of support from large-scale trading platforms and wallets.
Dash for instance, despite its controversial pre-sale and negative reputation, was remained as the world’s seventh largest cryptocurrency for many months due to the support from Jaxx and leading exchanges.
This week, Bithumb, South Korea’s leading bitcoin exchange and the world’s largest cryptocurrency exchange, is about to provide the push Monero has long needed. Bithumb is set to list Monero in its cryptocurrency trading platform tomorrow, on August 27. Because it handles around $700 million worth of trades on a daily basis, the integration of Monero by Bithumb is expected to be an immediate and drastic increase in liquidity for Monero traders, users and investors.
Starting August 23, when Bithumb began to accept deposits from Monero traders, the price of Monero surged, even before the exchange fully listed the cryptocurrency. Tomorrow, as Bithumb completes its last phase of integration and opens Monero trading, the price of Monero will likely surge once again.
Monero was able to rise by 22 percent earlier today due to upward momentum supported by Bithumb and optimistic traders in Asia. So far, every cryptocurrency released or introduced by Bithumb to the South Korean cryptocurrency exchange market has seen a drastic increase in value and trading volume. Ethereum, Ethereum Classic, Ripple and Litecoin have all seen rapid increase in value after being listed by Bithumb and Korbit, two largest exchanges in South Korea.
More importantly, the South Korean exchange market and its traders are highly attracted to cryptocurrencies that have special attributes. For instnace, South Korean traders are keen on Ethereum due to its smart contract-based protocol and flexible ecosystem. The anonymity of Monero will likely attract many investors on the Bithumb platform and if it is well accepted by the South Korean market, Monero could make its way back to the top five cryptocurrencies. Already, it has surpassed Zcash and many other cryptocurrencies to become the tenth largest cryptocurrency in the market.
Standpoint Founder — Bitcoin Asset Class Will Grow Into $2 Trillion Market
Forget $5,000.
At a time when many are making short-term bets on the price of bitcoin and other cryptocurrencies, one bitcoin bull is going a step further. Ronnie Moas, founder of Standpoint Research, is making the case cryptocurrencies will not only be a decade-long trend, but a viable asset class.
In fact, he's going so far as to call for a massive rise in the market cap of cryptocurrencies. His prediction? The total value of all cryptographic assets, today valued at $150 billion, will soar to $2 trillion over the next 10 years.
And in a new interview, Moas walked CoinDesk through his forecast, explaining how it stems from his fundamental analysis of the capital markets and the broader macroeconomic trends he now sees in place.
The Standpoint founder's view stands in stark contrast to the highly bearish analysis of Peter Schiff, who called cryptocurrency a bubble, a speculative frenzy and a natural Ponzi scheme driven by "just plain greed" last week.
In the broadest sense, Moas sees the current state of the cryptocurrency market as a direct parallel to Silicon Valley during the 1990s, when a massive surge of innovation created new technologies that transformed the way we work and live and ushered in a period of massive wealth creation.
He explained:
"I am not any more concerned with bitcoin being at a record high than Amazon or Google investors were concerned when those share prices jumped hundreds of percent and hit $100 and $200 many years ago. Today, both of those stocks are above $900. The question is not where we are at — it is where are we going? I do not think we are in a bubble."
Roadmap to $2 trillion
How does Moas get to the $2 trillion market cap for cryptocurrency in his forecast?
He begins by looking at the $200 trillion that is currently invested in global capital markets today, including all major asset classes: cash, stocks, bonds and gold. Moas, who also does traditional equity analysis, begins his market breakdown with stocks, which he believes are currently overvalued.
According to Moas, three-quarters of the names in the S&P 500 are trading at least 18 times earnings, which is higher than his value threshold of 12 times earnings. He also adds that we haven't had a stock market correction in 20 months.
On the currency front, the U.S. dollar is currently losing 1 to 2 percent per year due to inflation. Moas also points out that the dollar has lost half its value since he was in high school 35 years ago.
From a global perspective, where most people don't have access to U.S. dollars, Moas believes the case for cryptocurrency is even more compelling:
"Now, imagine what they think of their own local currencies elsewhere in the world. Imagine you live in Venezuela and you're keeping your money under the mattress. Would you rather leave it there in Venezuelan bolivar or would you rather put it in bitcoin? It's not going to take you very long to make that decision."
Breaking his thesis down further, Moas believes that a conservative estimate is that at least 1 percent of the $200 trillion now tied up in stocks, cash, gold and bonds will migrate into cryptocurrencies over the next decade.
In that case, he says, "Bitcoin could end up with a market capitalization that is more than Amazon and Apple combined."
Under this scenario, that would mean that the current market capitalization of all cryptocurrencies would naturally grow.
And if Moas's market capitalization targets are correct, investors would then receive a 1,250 percent return on their cryptocurrency investments made today.
Diversified strategy
But he adds one major caveat to that prediction. Simply, "You've got to be in the right names."
Assuming you accept Moas's basic bull market thesis for cryptocurrencies, how do you know if you are invested in the right "names" in the cryptocurrency space? And, if the market boom in cryptocurrency is analogous to the roaring years of the 1990s tech boom, how can you avoid investing in the next Pets.com?
As Moas frames it:
"A lot of people say there is a bubble out there. I see a bubble when you get down below the top 50 cryptocurrencies. There are more than 800 names right now. In my view, what happens outside the top 50 is irrelevant."
Moas goes on to point out that 91 percent of the nearly $150 billion market cap is invested in the top 20 names and 70 percent is invested in bitcoin and ether alone.
He recommends, for the purposes of portfolio diversification, retail investors should hedge their bets and invest across the top 10 or 20 cryptocurrencies.
In Moas's view, the 800 cryptocurrencies that are now trading are analogous to the 800 stocks that were available on the Nasdaq at the height of the dot-com bubble nearly 20 years ago. While Amazon and Apple and Microsoft emerged to become among the most valuable companies of all time, there were many companies from that time period that died slow and painful deaths.
Or, as Moas more colorfully puts it: "Back then, there were hundreds of pump-and-dump, small-cap junk names just as there are in crypto today. Today, the crypto market is giving you the same signals with names like dash, ripple, litecoin, monero, bitcoin, ethereum, neo, nem, iota and others."
He went on to add that while there are certainly risks involved in investing in cryptocurrency, those risks are, in his view, outweighed by the possibility of 10-to-one or 20-to-one payout to the upside experienced by tech stocks.
The bull case
Of all the major cryptocurrencies, though, Moas seems especially bullish in his view of bitcoin. Unless there is a major shakeup in the underlying confidence, he believes that investors are going to want to buy-and-hold for their portfolios for 10 years or more.
Moas points out that there are currently only about 16 million bitcoins that have been issued of a possible total 21 million coins that will be created.
In his analysis, this could lead to tens of millions of people trying to get their hands on just a few million coins.
When asked for a specific price target, Moas summed up as follows:
"At the beginning of July, bitcoin was trading at $2,500. I believe in the next three years you will probably see $15,000 to $20,000 for bitcoin. It could double twice from here in the next 36 months."
$154 Billion — Bitcoin Price Rally Carries Crypo Markets to New Record
The bitcoin price rallied on Wednesday, leaping 9% to cross $4,200. The wider crypto markets followed bitcoin’s lead, with 93 of the top 100 cryptocurrencies marching into positive territory for the day.
This near-universal advance added more than $10 billion to the total cryptocurrency market cap. After entering the day at $142.5 billion, the total value of all cryptocurrencies burst through the $150 billion threshold to set a new all-time high of $154 billion.
Bitcoin Price Leaps Past $4,200
The bitcoin price had experienced an early-week correction, briefly diving as low as $3,675 on August 22. Theories for this decline include a hashrate shift from bitcoin to bitcoin cash, as well as concerns surrounding the Segwit/Segwit2x debate. However, the bitcoin price had strong support on the Asian exchanges, which helped prevent it from staying below $4,000 for long. Today’s 9% climb brings the bitcoin price to a present value of $4,243 and a market cap of just over $70.1 billion.
Ethereum Price Closes on $350
The ethereum price did not quite keep pace with bitcoin, but it did return a 4% increase for the day. At present, the value of ether is $323, bringing the ethereum market cap to $30.4 billion.
Metropolis, ethereum’s next major protocol upgrade is, quickly approaching. Although these protocol upgrades are implemented by hard forks, they have generally been supported by the community. Consequently, many investors believe the ethereum price will close on $350 as its September release nears.
Bitcoin Cash Price Stumbles Following Difficulty Adjustment
The bitcoin cash price surged close to $1,000 last week, one of several converging factors that made bitcoin cash more profitable to mine than bitcoin. Suddenly, the bitcoin cash hashrate exploded, nearly reaching parity with bitcoin. At its height, bitcoin cash boasted 44% of the combined hashrate between the two coins.
However, the hashrate increase triggered an August 22 difficulty adjustment that caused bitcoin cash mining profitability to plunge. Bitcoin cash is now just 42% as profitable to mine as bitcoin, which has led several miners to move hashpower back to the main blockchain. At present, bitcoin cash has about 27% of the combined bitcoin hashrate.
The difficulty adjustment coincided with a decrease in the bitcoin cash price. Despite the widespread market advance, the bitcoin cash price retreated 7% to $661. Bitcoin cash now has a $10.9 billion market cap.
Ripple Price Soars to 50% Gain
Bitcoin cash was the only top 25 cryptocurrency to decrease more than 1% for the day, and most coins returned significant gains.
Altcoin Price Chart from CoinMarketCap
The Ripple price led the way, posting a shocking 50% increase following a flood of volume on the major Korean exchanges. This rapid advance raised the Ripple price as high as $0.300 for the first time since June 25, although it has since tapered to $0.277. Ripple now has a market cap of $10.6 billion, putting it within striking distance of reclaiming the 3rd spot from bitcoin cash
Fifth-ranked IOTA rose 9% to $0.92, while the litecoin price increased 4% to $48. The NEM price saw just a 2% gain, but it was enough to raise its market cap to $2.3 billion. The Dash price rose 7% to $300, and NEO climbed 9% to about $38. Other than Ripple, ethereum classic was the only top 10 cryptocurrency to rise more than 10%. ETC’s 14% gain helped it secure the 10th place spot from Monero, who rose 8% to a new all-time high of $98.
Top Cryptocurrencies Price Weekly Prediction — Next Days Will Be Rough For The Crypto Market
Not much has changed for most cryptocurrencies over the past few hours. Bitcoin is, together with Monero, the only currency in the top 10 noting a small loss, whereas most other coins have stabilized or regained some losses. Considering how the weekend is often a dreadful period for cryptocurrency trading this overall trend is rather positive. The total cryptocurrency market cap is heading toward US$90bn as well, which is a positive sign for the future.
CRYPTOCURRENCIES PREPARE FOR A STRONG WEEK
It seems evident most of the top 10 cryptocurrencies are in a good position for some notable gains over the next seven days. Even though we will see one Bitcoin hard fork materialize on August 1st, it is doubtful this will harm the price in a negative manner. Do not be mistaken in thinking Bitcoin Cash tokens come free of charge, though, as they may effectively subtract value from the actual Bitcoin price until the market stabilize.
That being said, we do see the Bitcoin price has dipped a whopping 0.19% over the past 24 hours. That in itself means very little as far as the world’s leading cryptocurrency is concerned. In fact, as long as Bitcoin doesn’t move by 5% or more over the course of 24 hours, there is absolutely nothing to be concerned about. A minuscule change such as this one means absolutely nothing.
Despite the Bitcoin price “dip”, most altcoins are doing quite well. Ethereum is finally showing some life signs after weeks of declines. The 5.67% gain in the past 24 hours is quite substantial, as the price seems to be heading toward US$200 once again. It is still a far cry from US$400, though, and the currency is not out of the woods just yet. Future declines in value may still be a big part of Ethereum as there is still some funds in circulation which may be dumped across exchanges in the near future.
Other top currencies are showing small gains as well. Litecoin is up by 189%, whereas NEM, Dash, and IOTA all report gains below 1%. The big winners are XRP — up by 3.47% — as well as Stratis — up by 2.99% — and Ethereum Classic, which increased by 1.45%. The bigger question is when people will realize Ethereum Classic is the true, immutable Ethereum chain without SEC scrutiny, highly controversial ICOs, and a blockchain which can be rolled back when founders’ money is stake. Only time will tell if the ETH/ETC correlation will ever see proper momentum, as for now, all the hype and focus is still in Ethereum’s camp.
What is rather surprising is how Monero is the only top 10 currencies to note any losses, other than Bitcoin Monero lost6.41% of its value overnight, which is quite substantial. There is no real reason for this sudden downturn other than people speculating on the other currencies and trying to make a profit. Monero is still a very powerful cryptocurrency with honest developers who aim to provide anonymity to all users. Then again, a price of US$40.65 per XMR is still more than fair, all things considered.
Looking at the individual cryptocurrency market caps, it is pretty obvious Bitcoin remains the undisputed leader for some time to come. This also results in the Bitcoin Dominance Index going back above 50%, as it currently sits at 50.5%. Not too long ago, that percentage was heading toward 40% and lower, but it seems the market has finally come to its senses once again. There is no other currency capable of rivaling Bitcoin right now, that much is evident.
$100 Billion Cryptocurrency Market Showing Signs of Maturity as Mainstream Investment Appeal Grows
Cryptocurrency has burst onto the financial scene like a blazing comet, offering investors a new asset class to grow their wealth, hedge against instability and escape the grips of central banking. As the market for digital coins crossed the $100 billion mark, hedge funds and major institutions suddenly found themselves scrambling to make sense of the shadowy world of cryptocurrency.
For the most part, investors no longer question the viability of cryptocurrency, but are instead exploring what shape this evolving market will take.
Cryptocurrencies Come Into Their Own
Though highly volatile, cryptocurrencies have been on a dramatic upward trajectory for the past year. In the case of bitcoin — the pre-eminent digital coin founded in 2008 by a person or entity called Satoshi Nahamoto — the bull market is at least seven years old. The success of bitcoin has spurred a bevy of other so-called altcoins, many of which have latched on to the success of the flagship digital coin.
Bitcoin’s share of the global cryptocurrency market has quickly diminished as alternative payment systems hit the market. At the time of writing, bitcoin represented roughly 41% of cryptocurrency market capitalization. By May, digital currency alternative Ethereum had surpassed half of bitcoin’s market value.
Several other currencies have also crossed the $1 billion mark this year, including Ripple, Litecoin, Ethereum Classic, Dash, NEM, IOTA and Stratis. Many more are worth hundreds of millions of dollars.
Key Investment Drivers
The growth and widespread adoption of cryptocurrency-as-an-asset has dividend analysts and investors seeking to understand the nature of the bull market. The market’s dramatic rise through the first six months of the year has raised fears of an asset bubble with dangerous consequences. But proponents of digital currency say the market has plenty of room for growth as investors seek alternative asset classes. They cite several key investment drivers as proof that cryptocurrencies aren’t overbought, but are instead maturing.
1. Hedge against instability: Despite their volatility, cryptocurrencies are seen as a hedge against central bank intervention and other forms of fiat-currency related instability. China is the most prominent example, as mainland investors have poured into bitcoin to diversify away from yuan devaluation. This compelled the People’s Bank of China (PBOC) to initiate a four-month freeze on bitcoin withdrawals.
2. Increased regulatory certainty: Earlier this year, the Japanese government legalized bitcoin as a form of payment and initiated capital requirements, cyber security laws and annual audits. Japan’s Accounting Standards Board is also in the process of developing a standard government digital currencies.
3. Store of value: Digital payment systems like bitcoin are mined, which makes them scarce digital resources that offer many of the same investment benefits as commodities. Bitcoin has a fixed issuance schedule with a finite supply of 21 million coins.
4. Greater investment appeal: Bitcoin’s success has triggered a fresh wave of buying interest from various segments of the market. Institutional investors and banks have expressed a greater interest in buying bitcoin. Nine of the world’s biggest banks — including Goldman Sachs, JPMorgan and Credit Suisse — are developing a common standard for blockchain that could also hasten the appeal of cryptocurrency-as-an-asset.
5. Decentralized payment system: Today, more than 100,000 merchants accept bitcoin as a form of payment. As the evolution away from fiat currency continues, demand for distributed digital money that exists beyond the purview of central banks will likely grow.
Price Volatility Continues
Despite their widespread appeal and unrelenting gains, cryptocurrencies are prone to dramatic price swings. This trend is expected to continue as the market slowly matures.
Cryptocurrencies sold off again on Friday, with five of the world’s top-ten coins posting weekly losses of 9% or more. Ethereum suffered the largest setback, while bitcoin managed to pare losses. IOTA, BitShares, NEM and IOTA also faced heavy losses.
With more than 700 digital payment systems on the market, analysts caution that not every cryptocurrency offers investment value. Some are clearly riding the coattails of bitcoin, while others are benefiting from speculation.
At the same time, there’s still plenty of room for disruption as alternatives to bitcoin vie for capital. Analysts observe that the the cryptocurrency market will likely see significant diversity for the foreseeable future.
Billion Dollar Cryptocurrency Club Swells to Six Members
Bitcoin’s market cap surpassed $37 billion today when the price hit $2271.16, commanding more than a billion in trade volume in a 24-hour period, according to coinmarket.com. The total value of the coin market is now at $81.3 billion, as the last two days added more than $10 billion to the capitalization.
Bitcoin’s value has almost doubled in the last month, even while its market share has fallen below 50%, thanks to the gains of other cryptocurrencies. Bitcoin’s gains have been steadier than most of the altcoins, but collectively, altcoins are rising at a faster pace.
Asian Trading Remains Key
Rising demand for bitcoin by Chinese and Japanese investors combined with falling stocks and other factors to push bitcoin to new heights. Because the Japanese yen holds the largest share of bitcoin trading, Asian trading pushes the prices higher.
The Nikkei Asian Review today reported, “Bitcoin going mainstream as Japanese business signs on,” signaling bitcoin’s growing popularity in Japan, which recently recognized bitcoin as a method of payment.
Asian interest in bitcoin increasingly carries over to other currencies, as indicated by the gains for Ripple and NEM, the two most popular altcoins in Japan in terms of demand and trading volumes.
Japanese regulators also decided to abolish the 8% consumption tax on transactions of bitcoin bought from exchanges, which is set to go into effect in July this year.
Progress On Scaling Continues
Today’s announcement that a majority of bitcoin miners have reached a consensus to deploy the Segwit2Mb protocol upgrade for bitcoin also bodes well. Bitcoin’s rise has benefited from an alleviation of the fear that a “hard fork” will be needed — dividing bitcoin into two currencies — to improve bitcoin transaction times. A successful deployment of an alternative scaling solution indicates the hard fork that would have resulted in two separate currencies in order to speed up bitcoin transactions may not be required.
Wences Casares, CEO of bitcoin wallet Xapo and a member of PayPal’s board of directors one bitcoin would hit $1 million before the next ten years while speaking at the Consensus 2017 conference in New York.
Ethereum Continues To Amaze
Ethereum, the largest altcoin, hit more than $16 billion market capitalization with a $179.68 price, followed by Ripple at more than $13 billion. The top three cryptocurrencies — bitcoin, Ethereum and Ripple — are the only players to boast more than $10 billion market cap.
Ethereum has witnessed the fastest growth of any digital currency ever. Not even two years old, the platform is now worth more than $16 billion with its trading spaces consistently attracting more online active users than even bitcoin’s.
Ripple, designed for enterprise use and can be used by institutions for on-demand liquidity for cross-border payments, also continues to post rapid gains. Banks and payment providers that use XRP will secure better access to emerging markets at lower settlement costs.
Ripple recently committed to placing 55 billion XRP in a cryptographically secure escrow account at the end of the year, addressing concerns that it will eventually sell its 61.68 XRP as it seeks to strengthen XRP’s exchange rate against other currencies.
NEM, number four commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion.
There are now six cryptocurrencies with more than $1 billion market caps.
Altcoins Keep Shifting Position
Aside from bitcoin, the rotation shifts fairly frequently among the billion dollar players. A day ago, Litecoin, Monero, and Dash displaced Ethereum and NEM, with gains of 15%, 20%, 25%, respectively.
NEM, number four, commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion. There are now six cryptocurrencies with more than $1 billion market caps.
NEM has also made significant gains over the past few months. A major factor that has allowed NEM to transform into one of the most popular altcoins in Japan is its development team and company composed of Japanese founders and talents. NEM was initially developed and introduced in Japan by Makoto Takemiya, the co-founder and CEO of Soramitsu, the company that has also introduced the Iroha blockchain project to the Linux foundation’s Hyperledger Project.
Litecoin, one of the oldest altcoins, gained visibility this month because of its successful activation of SegWit, a scaling solution that circumvents the need for a hard fork.
Some credible sources are citing a possible "cryptocurrency bubble", as the prices of coins and tokens rocket and the fever for initial coin offerings (ICOs) continues unabated. All this stuff involves the technology known as blockchain, so it's all broadly related, but there are also certain distinct phenomena to consider.
On the one hand, we are seeing a massive increase in the price of Bitcoin, ether, Dash, Z-Cash, Monero, what have you.
Also surging is the ICO trend, which involves many new startups issuing and selling their own tokens (often oversubscribed with speculative buyers) as a way to crowdfund the building of yet another use-case focused blockchain system.
One theory behind the dramatic increase in the value of existing "altcoins", as in alternatives to Bitcoin, such as Dash or Litecoin, is that Bitcoin is approaching its limit and as a result users are now forced to pay increasingly high fees to use the Bitcoin network. Indeed, users are paying transaction processors additional Bitcoins to prioritise their transactions among the many thousands that are queued in a backlog, termed the 'mempool'.
Preston Byrne, COO of Monax and a fellow of the Adam Smith Institute, recently wrote about this: "The cryptocurrency market as a whole is interesting from an economic perspective in that it provides a perfectly transparent sandbox to see what happens when perfectly substitutable goods (Bitcoin clones) that accomplish the exact same thing (unregulated value transfer) in a fully automatic way (distributed state machines which require no human oversight) are placed in a position to compete.
"As far as an end-user of cryptocurrency software is concerned, whether a c-currency is $3000 in Dogecoin or $3000 in Bitcoin is immaterial; the shop round the corner prices its goods in USD/GBP/EUR, so as long as one coin or the other has sufficient liquidity to cash out, this means competition can occur on the basis of speed and transaction fees."
According to trading experts, the crypto ecosystem has been fleshed out lately with more cross pairs and on-ramps from the fiat world. There is a roll in roll out trade from Bitcoin to crypto and back as the markets inflate on both sides of the trade.
Charles Hayter, CEO, CryptoCompare, said: "Last year it was fairly easy to predict buying of Bitcoin through fiat and then into crypto. The cross pairs and markets have matured to offer direct Ethereum and Litecoin buying in a number of fiat pairs and this is increasing the options for traders to enter and exit positions. That said, Bitcoin is still the direct port in a storm for the entire industry.
"You are also seeing the arrival of new nations to the crypto sphere with their own bespoke approach to local regulatory issues et al — South Korea is a perfect case in point as they have taken the number three spot in terms on direct fiat to Ethereum trading.
Hayter said another interesting trend has been the dislocation of markets premia / discounts across pairs have widened. "This has been exacerbated by the Chinese regulatory issues as well as Wells Fargos hiatus on international transfers connected to Bitfinex and USDT. New markets tend to sit at premiums, as direct fiat flow spikes prices with exit routes from dead pools of money trading at a premium for exiting the exchange," he said, adding, "bubble — to an extent."
However, as far as ICOs are concerned, many prominent people in the industry believe this is fast becoming pure bubble territory and will end in tears (and probably some actions by the SEC). Someone who would go the record about token sales is angel investor and author William Mougayar, who is organising the Token Summit in New York on May 25.
He said: "In the history of technological cycles, if you follow economist Carlota Perez's thinking, nothing great happens without overshooting during the installation phase of a given technology, before moving into the adoption phase.
"We are clearly in the installation phase of cryptotech, and there is nothing we can do to prevent this overshooting from happening. It's just human nature at play.
"Of course there are ideas, protocols, start-ups and applications currently being launched that will not make it long term, but out of all this activity, some great ones will emerge."
Byrne of Monax has been as staunch a critic of ICOs as anyone ("the equivalent of selling people rows in a database"). But he concluded by saying that, amid all the froth, the way blockchains perform is truly impressive.
"Even relatively obscure systems with a fairly low level of developer input, such as Dogecoin, continue to survive and thrive under the circumstances. This is a ringing endorsement of blockchain technology as a very capable way of automating financial process flows with maximal security and minimal supervision.
"In the enterprise blockchain space we benefit directly from observing the failings and successes of public blockchain systems, which allows us to deliver more value to our clients in the permissioned/regulated applications they ask us to build. All in all, it's great," he said.
