The Rise of Altcoins May Put Pressure on the Bitcoin Price
There has been a major surge in both the popularity and price of bitcoin; however, it is not the only cryptocurrency that is making gains in the current market. Etherium and Litecoin are the other two types of cryptocurrency, commonly termed as altcoins, which has seen a rise in price in the recent days, along with that of bitcoin.
At present, the prices of bitcoin are actually tugging downward, while other altcoins are garnering solid gains. After having set a new record price of $20,000 over the weekend, bitcoin has spiraled down to a level below $18,000. The last session saw 5.3 percent depreciation for bitcoin. It was being sold at $17,450 levels, according to the CoinDesk’s Bitcoin Price Index.
At the same time, bitcoin cash and ether have both reached new record levels by gaining 26.6 and 16.6 percent respectively within the past two days. The top 10 cryptocurrencies, as ranked by market capitalization, have now gone up by at least 6 percent on average during the day and the cryptocurrency industry is now worth more than $630 billion.
Is Bitcoin’s Price Losing Steam?
A detailed analysis of the individual market indicates that cash could be gradually siphoning out of bitcoin into competing cryptocurrencies. For example, bitcoin cash’s strong rally is supported by an increase in volumes on exchanges providing Bitcoin Cash/Bitcoin pairs. The outflow of money from bitcoin into rival currencies is in tandem with the bullish cross cryptocurrency trends of last week.
Bitcoin’s downside in price could, however, be limited because most of the major rival currencies have reported new record highs in the past two days. It is likely that investors may collect the profits gained from alternative currencies and invest a part of that cash back into bitcoin. Even with that step, however, the bulls risk losing control if there is no quick progression in prices, according to the current price analysis.
Why Altcoins are Gaining Strength?
Various analysts have given contrasting viewpoints to explain the rise of the altcoins over the last few days. Some feel that with hedge funds and institutional money initially entering the cryptocurrency market through bitcoins futures has resulted in investors exploring rival cryptocurrencies.
Other analysts feel that the success of altcoins can be attributed to bitcoin’s scalability issues and the absence of Segregated Witness integration by businesses. Leading wallet platforms such as Coinbase and Blockchain, and platforms that predict bitcoin transaction fee, have been advising a transaction fee in the bracket of $10 and $30, due to the bitcoin mempool’s state (mempool is the aggregate size of unconfirmed transactions).
It is, however, uncertain whether the trend of bitcoin sustaining its value and the alternative cryptocurrencies increasing will continue in the mid-term. The dominance index of bitcoin was also under 50 percent in July, as Ethereum’s popularity surged. It recovered throughout August and September and peaked at 62 percent.
The Surge in the Value of Ethereum
The value of Ethereum’s currency is rising in parallel with Litecoin and Bitcoin. Etherium’s currency, referred to as Ether, which was launched in 2015, has risen by over 6,800 percent since the beginning of the year. The price of cryptocurrency Ether is at a high of $625.25 at present (with taxes being lowered, it may go much higher along with the job growth numbers but this is another topic!), despite the drama of the CryptoKitties, as per the data provided by CoinMarketCap.
The year 2018 is likely to witness a whole range of new regulatory necessities. Financial institutions will launch new products in the blockchain to make compliance simpler (though you probably do not want to ask Harry Solomon from that funny show Third Rock From the Sun or Michael Kelso from That 70s Show for any advice on this – that could put you in a rough spot if you listened to them!), and this is also why the Ethereum blockchain is rising on the popularity scale.
Ethereum has always had a positive image, unlike Bitcoin, and it has also risen to the second rank of popular digital currencies. The success behind Ethereum is attributed to its speed, just like Litecoin. It is also thought to be more impactful than Bitcoin because the transaction records, or blocks, can be generated much more rapidly in the case of Ethereum. Not a bad deal for them!