By Oluwapelumi Adejumo
In the first and second quarters of 2020, Bitcoin price faced a steep decline. Then in September, there was huge outrage in the cryptocurrency space as the Bitcoin value dropped by a whopping 10%, losing nearly $1000 in a single swoop.
But its comeback was even swifter and definitely more sweeping as there have been increased investments in the Bitcoin franchise leading to an increase in its value since October. This move has seen the value of Bitcoin rise to a dazzling $18,000, more than double its value at the end of 2019.
Like expected, the recent Bitcoin boom arrived with renewed interests in the cryptocurrency space. Old investors seeking to make the best of this trend and new ones looking to move into the market before the price peaks. This interest isn’t only in favour of Bitcoin as altcoins have seen their market value rise too.
Ethereum
Ethereum, one of the leading cryptocurrencies after Bitcoin, has seen its price nearly double. Although Ethereum has had a good year, it faced a decline in September when it dropped by $65.75. It, however, began its ascent again, when Bitcoin became bullish. Being a demand only market means that cryptocurrency prices are affected by the amount of supply being made.
The price of digital tokens rises when investors flood the market and fall when the drive drops.
Ethereum has been central to the development of the Decentralized Finance (DeFi) subsector of the crypto industry. The DeFi world garnered loads of interest earlier this year when users holding these assets were able to use their holdings to a great effect.
During this period, DeFi tokens like Harvest Finance, Wrapped Bitcoin and others witnessed a boom in their prices too. However, the sector has slowed down a bit because, with the current rise of Bitcoin, interest has shifted from this sector to Bitcoin itself.
Like Ethereum, fellow Altcoin, Ripple (XRP) has also risen to $0.30 with gains of 23.45%, in contrast to the volatile trend it rode during the first three quarters of the year. Although skeptics say this is just another move in its unending bullish-bearish dance.
There are investors who liken the current Ripple XRP trend to the early Bitcoin era and believe this would help it overcome the turbulence that might affect cryptocurrency in the future. However, there have been speculations of the Ripple XRP further increasing in value if the Pandemic continues to affect the global economy.
Other crypto assets like Litecoin, Cardano, Zcash and others have also experienced a surge in their prices. They have benefited from the interest Bitcoin has been able to bring to the crypto industry.
Many analysts have noted that this growth is likely to continue if many other investors are looking to invest beyond Bitcoin.
What are The Chances of Altcoins in the Crypto Market
While Bitcoin’s position as the most reputable digital currency in the world remains intact, other cryptocurrencies have also continued to rise, an indication that they won’t be bullied by its posture.
On Monday, the second most valued digital currency globally, Ethereum experienced a 6% increase in its value to $597. Its current value is its highest since the middle of 2018. This year alone, its value in the global market has increased by about four-fold despite a pandemic that shocked economic activities globally.
Like Ethereum, another digital currency that has continued to shine is Ripple. Though smaller, the coin has experienced a 100 per cent increase in value this month alone.
Bitcoin traded around $18,632 on Monday, is close to a three-year high.
Some analysts have argued that digital currencies like Ethereum and Ripple had an increase in value despite the pandemic because as major countries announced lockdown to quarantine huge swathes of the population, people get opportune to spend more time online. As such they’re probably getting more interested in other cryptocurrencies aside from bitcoin.
Similarly, the unique factors of these other altcoins have also been important on customers’ decisions. For example, Ripple, which was designed to eliminate the slow transaction time between global companies, allows payments to process at a staggering pace.
To be precise, with Ripple, a network has the capacity to process at least 10,000 different transactions in a single second. This is about a thousand times faster and also a thousand times cheaper than a Bitcoin transaction.
This means Ripple is also relatively energy efficient.
While Ethereum is currently relatively slower than Ripple by precisely about 670 times and has the capacity to process just around 15 transactions every second, this is certainly set to change.
The digital market is currently awaiting the arrival of Ethereum 2.0. This new system is expected to see Ethereum technology move to an upgraded platform which would no doubt radically change users’ assumptions about the digital currencies.
Known as Eth2, the new platform has the capacity to process a higher number of transactions than its predecessor. This will make the currency a lot more energy-efficient.
Currently, each Ethereum transaction requires an incredible 22.65 kwH of energy which is way better than Bitcoin. This, however, greatly limits Ethereum’s speed and capacity.
With the launch of Phase 0 of Eth2 planned for 2020, many investors have jumped at the chance to buy into Ethereum before its release. This is because the upgrade could spark a surge of interest in the crypto, resulting in a positive effect on its price.
In summary, these factors and so much more will continue to play a role in the growth of these altcoins. With time, they might even be expected to get to the same level of growth and popularity that Bitcoin has been able to attain.