Bitcoin’s dramatic rally is spilling over into the rest of the digital currency universe.
Some of the bitcoin’s biggest rivals have seen sharp gains over the past month as investors have sought out affordable, digital alternatives in the wake of the cryptocurrency’s recent rapid advance, said Charles Hayter, chief executive officer and founder of CryptoCompare, a company that provides data and analytics about digital currencies.
Earlier this week, bitcoin surged above $1,000 for the first time in more than three years. It has since continued to rally, with one coin going for as much as $1,050 on Wednesday.
A sharp decline in the value of the Chinese yuan, as well as the perception that the world’s largest economies are growing increasingly unstable, have helped to fuel bitcoin’s rally, Hayter said.
Read: And 2016’s best-performing commodity is…bitcoin?
Check out: Bitcoin hits milestone of $1,000 as 2017 begins
Also read: This bitcoin challenger is up 1,100% this year—but is it ready for prime time?
Chris Burniske, a blockchain analyst and product lead at ARK Invest, said that these gains are beginning to filter into the broader market as bitcoin traders look to reinvest their profits. A blockchain is the cryptographically-protected universal ledger that records digital-currency transactions.
“Cryptocurrency people don’t generally take profits into fiat currency,” Burniske said. “Instead, they take profits and reallocate into other crypto.”
What is the future of bitcoin?
Cameron and Tyler Winklevoss run a bitcoin exchange on which investors trade on average $1 million in bitcoin a day. But is this cryptocurrency safe or a fad?
Two of ARK Invest’s ETFs
have exposure to bitcoin by holding shares in Grayscale’s Bitcoin Investment Trust.
Over the past month, bitcoin’s market capitalization has increased by about $4 billion. If investors reinvested gains in other digital currencies, the market for bitcoin’s rivals would double in size, Burniske said.
Most exchanges don’t have the capabilities to allow investors to trade fiat currencies, like the euro and the dollar, for many of the smaller cryptocurrencies—-collectively known as altcoins. Those who want to invest must first purchase bitcoins, then swap those for the desired coin, he added.
Ethereum regains its footing
Ethereum, the second-largest cryptocurrency by market capitalization, has nearly doubled in the past month, rising from about $6 per ether token to $10.50 on Wednesday, according to data from Coin Market Cap.
Once viewed as a potential bitcoin-killer, Ethereum’s value skyrocketed in the opening months of 2016. But it soon turned sharply lower after an unknown hacker pilfered about $50 million worth of so-called ether tokens from an entity known as the DAO.
In an attempt to recover the stolen funds, Ethereum’s developers engineered a controversial software update that rolled back part of the Ethereum blockchain. A segment of investors protested, and refused to adopt the update. Subsequently, Ethereum has been split into two separate coins, Ethereum and Ethereum Classic, which has also seen modest gains in the past week.
The DAO, which was essentially a fund built atop Ethereum’s software that crowdfunded cryptocurrency startups, was dismantled after the hacking episode.
IRS inquiry boosts privacy-oriented coins
Cryptocurrencies with enhanced privacy capabilities surged after the International Revenue Service issued a summons to Coinbase, one of the largest U.S.-based exchanges, demanding that it hand over records of client transactions.
Monero and Zcash, two altcoins with enhanced privacy capabilities, have both risen sharply in recent weeks.
“Both Monero and Zcash differ from bitcoin in that they have more extensive privacy features built into the network,” Hayter said.
Monero, the world’s fourth-largest digital coin, has seen its value more than double over the past month, from about $8 to about $17. Earlier this week, Kraken, another U.S.-based exchange, initiated trading in Monero, which also contributed to its gains, Hayter said.
To be sure, Zcash has been incredibly volatile since it launched in November. But over the past two weeks ago, it has risen from $34 a coin to $52 a coin.
The Securities and Exchange Commission announced on Wednesday that it was again delaying its decision on whether to approve a bitcoin exchange-traded fund proposed by Cameron and Tyler Winklevoss.
Despite the delay many believe the approval of the Winklevoss fund, or a rival bitcoin ETF, would elicit a massive influx of institutional capital into the market, driving the bitcoin price even higher, said Marco Streng, the chief executive officer at Hong Kong-based mining firm Genesis Mining
“When new money enters the ecosystem, it spreads to Ethereum and Dash and the other cryptocurrencies,” Streng added.
Investors expect a final decision on the Winklevoss ETF in March.
TheBitcoinNews.com – Bitcoin News source since June 2011 –
Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. TheBitcoinNews.com holds several Cryptocurrencies, and this information does NOT constitute investment advice or an offer to invest.
Everything on this website can be seen as Advertisment and most comes from Press Releases, TheBitcoinNews.com is is not responsible for any of the content of or from external sites and feeds. Sponsored posts are always flagged as this, guest posts, guest articles and PRs are most time but NOT always flagged as this. Expert opinions and Price predictions are not supported by us and comes up from 3th part websites.
Advertise with us : Advertise
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube