Altcoins Are Recovering, Enthusiasts Are Looking For New Unicorns
FxPro Financial Services Ltd | Jul 09, 2020 08:21AM ET
Cryptocurrencies have shown some recovery recently, and participants in the crypto market are wondering: is this dynamic a reflection of what is happening in the stock market due to the growing correlation and participation of institutional investors, or are we dealing with internal factors? Bitcoin, though showing a 2% growth in recent days, hardly moved from $9K.
Alternative cryptocurrencies have become real stars by the end of the week. Leading altcoin Ethereum (ETH) has grown by 7% in the last 7 days, XRP has grown by 16% and Crypto.com Coin (CRO) added 16%. The top 100 altcoins showed particularly high growth rates. The Cardano (ADA) spiked by 34%, Chainlink (LINK) by 30%, Stellar (XLM) by 39%, VeChain (VET) by 101% and Dogecoin (DOGE) added 79% after the viral video in TikTok.
Demand for altcoins could grow due to retail investors' interest in projects that look potentially attractive at a low nominal price. Due to its endless fractionality, bitcoin can also be a destination for investment with any budget, but the bitcoin project is seen as much more mature. In the stock market categories, it has passed the startup stage and is already similar to a "growth share". This seems to be the kind of logic that guides investors towards altcoins.
Besides, the demand for altcoins is growing as it has become easier to buy them. Many applications have been released, where in a few clicks you can buy almost all the altcoins from the TOP-100 by paying for the purchase with a bank card. Inside the applications, there are usually ways to instantly take profit in the USDT stablecoin and then withdraw it to fiat. This is a significant difference from the situation in 2017 when the purchase schemes for retail investors were quite confusing.
This conclusion can be confirmed by the growing popularity of the Crypto.com project. The growth of the CRO token since the beginning of the year was 325%. At the moment, it seems that demand exceeds supply. Rocket fuel for the coin was the launch of a payment card with replenishment through the cryptocurrency. This is the simplicity that the crypto market was so lacking. So far, the project is not big enough to attract the attention of the monetary authorities, but there is no doubt that with this rate of growth it will happen soon. In this case, there is every reason to assume the emergence of a serious player not only in the crypto market but also in the money transfers sector.
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This is similar to how mobile messaging apps defeated mobile operators on their own territory, so nowadays hardly anyone uses a regular phone for international calls. Cryptocurrencies are now at a stage where the traditional banking sector, with its international remittances lasting several days, is successfully resisting crypto projects with the support of governments. But even here the rules of the game will change, and who knows: maybe in a few years, banks will provide their infrastructure for crypto transfers, like mobile operators now provide unlimited traffic for messengers.
The FxPro Analyst Team
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