It has been truly refreshing to see dramatic growth across the crypto markets within the past week. No matter where the markets go from here, it’s good to know that cryptocurrencies can still generate buzz around the world.
Growth has generally been largest among the top 20 cryptocurrencies, as investors took money from Bitcoin and put it into smaller, but still excellent projects that might yield greater returns than BTC. Let’s take a look at why growth is occurring after a protracted bear market, focusing more specifically at what each of these top three projects (Bitcoin BTC, Ethereum ETH, and Ripple XRP) bring to the table.
Bitcoin’s Role in the Spring 2019 Crypto Rally
Bitcoin has been around longer than any other cryptocurrency and often leads performance in the industry. Image: Yuri Shebalius/Shutterstock.com
The biggest factor that seems to have driven the sudden price jump in crypto markets is the huge purchase of Bitcoin. More than 20,000 BTC were sold within minutes across three exchanges: Kraken, Bitstamp, and Coinbase. That’s nearly 0.1% of Bitcoins total supply (only 17+ million of which is in the current circulating supply). Far fewer Bitcoin are actually available to buy and sell on exchanges right now, so a sudden reduction of 20k Bitcoin in exchange liquidity made an enormous splash in the global industry.
To put it another way, suddenly $100,000,000 in Bitcoin suddenly went to a private buyer. With liquidity so suddenly diminished, Bitcoin is now scarcer than before. With supply decreased and demand unchanged, the price of Bitcoin increased. Then came the FOMO.
Fear of Missing Out occurs when investors think that an asset is in the process of soaring in value. They buy some in the hope that the price will continue to rise. Bitcoin’s sudden price jump kick-started this process, and 24-hour trading volumes spiked to levels unseen since late 2017/early 2018.
As what always happens during a Bitcoin price spike, traders around the world bought into Bitcoin, then looked to see how their holdings could be diversified. They sell some Bitcoin in exchange for high-quality altcoins; thus, Bitcoin’s price jump caused almost all of the altcoins to rise as well. In some cases, altcoins rose more than Bitcoin did.
At the time of this writing, Bitcoin’s total market cap is just over $88,000,000,000.
Ethereum’s Role in the Spring 2019 Crypto Rally
Ethereum has had a tough 12 months, it’s starting to look better for the major cryptocurrency. Image: AlekseyIvanov/Shutterstock.com
Ethereum wasn’t the driver of the recent market recovery, but it was well situated to benefit from the event. Ethereum saw incredible price declines following the market crash of last year. At its lowest, ETH prices were well over 90% lower than their all-time high price from January 2018.
Investors fled from Ethereum for many reasons. The most important was a general sense that Ethereum had lost its way. Once, Ethereum and its charismatic leader Vitalik Buterin seemed to be leading cryptocurrency (and the whole world of tech) into a brave new future. But because of scaling issues, uninspired Dapps, and disagreements about network developments, no one knew whether Ethereum could transcend its growing pains and achieve some or all of its early promise.
In the year-long bear market we’ve suffered, Ethereum soldiered on. Proof-of-Stake, Sharding, Casper, and Constantinople are now closer than even, and numerous aspects of Ethereum’s decentralised autonomous structure are now fully operational. Ethereum’s development has been quiet (from the perspective of the trading public), but rigorous. Investors know this, and that’s why money is flooding back into Ether, at least at the time of this writing.
Ethereum still has a long way to go before it’s the blockchain it promised to be in 2014-2017, but it’s farther along than ever before, and we believe its best days are yet to come.
At the time of this writing, Ethereum’s market cap is over $17,000,000,000.
Ripple’s Role in the Spring 2019 Crypto Rally
Ripple has launched some major products and features in the past year, the performance of the coin is looking up. Image: Blue Planet Studio/Shutterstock.com
Ripple had a great 2018, even if the price of XRP didn’t reflect it. Banks across the world have started to use RippleNet products for transferring value across international borders. Santander, the Royal Bank of Canada, PNC Bank – this is just a small list of multi-billion-dollar financial institutions that now use Ripple products in some form of fashion. With Ripple opening offices all over the world, including Dubai in 2019.
Ripple is also used now by international remittances companies like Western Union and MoneyGram. It’s easy to imagine a future where, if you send money abroad, XRP is the exchange currency by which the transfer is made. Even though some people think that Ripple is too cosy with status quo financial institutions, its progress is undeniable, and this is why Ripple is soaring along with the other best crypto projects in the market.
At the time of this writing, XRP’s market cap is over $15,000,000,000.
There are numerous other qualified projects in the crypto space, but none of them has the clout of BTC, ETH, and XRP. Fortunately, much of the rest of these projects have been working as hard as the top three; they’ve just got a lot more ground to gain if they’re to be at the level of crypto’s leading trifecta.
Fourth place, Litecoin LTC, has a market cap of just a third of Ripple’s. Secondary market leaders like IOTA and NEO haven’t even cracked $1 billion in many months. We expect Bitcoin to continue to grow in the weeks and months to come, and we believe in the possibility that a new all-time high could be established in 2019. In this event, most other top 20 cryptocurrencies (and many of the rest of the top 100) will be carried to new heights along with it.
Of course, this bull run may not last. But whatever happens, we’ll be here to report on it, and we’re excited to be along for the ride.
Featured image: Wit Olszewski/Shutterstock.com