It feels like today, the cryptocurrency market is in 2017 again.
Since Memorial Day Bitcoin (BTC) is up to 35% and it rises to 133% since March 15, 2020, the date when the closures of schools and businesses started in the U.S. That had helped Bitcoin bounce to 64% up this year so far after it crashed in March along with stocks. Bitcoin was $6,500 on March 24, then five months later, it is nearly $12,000.
“Altcoins” gains have been more impressive or alarming. Ether (ETH) the token of Ethereum Blockchain which is the No. 2 cryptocurrencies by market cap is up to 210% in 2020. Stellar Lumen (XLM) the native token of the Stellar network is up to 130%. Cardano (ADA is up to 274%. Algorand (ALGO) is up to 200%. Dogecoin (DOGE) which is a meme-based cryptocurrency that has no business purpose is up to 68%.
If you only follow the Bitcoin price, you might not hear of these many tokens. This brings fear to some crypto onlookers that the huge gains for no-name coins can signal another risk bubble akin to 2017. “Altseason” is the term given by Coin Telegraph with regards to this trend. While CoinDesk called it “anything-goes token market”.
The president of Coinlist Andy Bromberg has vested and listed new token sales and sees glimmers of 2017, but he thinks this moment might be different. The new token that has offered its initial sale via the Coin list has so much demand and crashes the site.
“There’s some extraordinary stuff happening, and things that are essential and have authentic long term promise, but moreover there are a lot of people who just see an opportunity to grab cash,” says Bromberg. “Just like in 2017, it’s really hard to compare these things. Some are idiotic. The noise comes along with the signal. So as an investor in the space, you should be cautious, because the more good things that come out, the more scammy things come out too. But you should also be excited.”
Now to the apparent question: Is the rise in crypto prices thanks to the COVID-19 pandemic?
Some crypto investors are saying yes. Most of them pointed out that the actions of the Federal Reserve and the other central banks globally fueled the appeal of Bitcoin as a hedge. Gold, the more mainstream hedge is up to 29% in 2020.
“There are so many apprehensions in this pandemic, but one thing that seems approximately assured is when you print trillions of dollars more paper money, it’s going to drive up bitcoin and other cryptocurrencies,” explains Dan Morehead, CEO of crypto investment firm Pantera Capital. “Gold’s taking off to go up, bitcoin’s going to go up. It is a hedge to the paper currency being debased.”
Pantera’s digital asset store is up 130% in 2020, and Morehead believes that in the next year, “The non-bitcoin cryptocurrencies will surpass bitcoin.”
In the same spirit, Pantera still speculates in ICOs (initial coin offerings), the token sales that erupted in 2017, then diminished after the U.S. Securities and Exchange Commission in 2018 made clear that saw most ICOs as unlisted securities offerings. “We have a fund that invests in pre-auction ICOs, and rather of recognizing 50 white papers a week like we were doing at the maximum in 2017, we invest in one or two every quarter. So the market is still there, it’s just much more selective.”
Wall Street mainstream had help Bitcoin when they voiced their public support. It also helps bitcoin when mainstream Wall Street names voice public support. In May, Paul Tudor Jones startled unbelievers when he said that he discerns Bitcoin as “a great speculation” and has shifted 2% of his paling fund’s money into Bitcoin. That prevails in explicit unlikeness to Warren Buffett’s staunch view of bitcoin speculation: “That is not investing.”
Source: https://finance.yahoo.com/news