As of March 25, Bitcoin suffered a huge hit when the value of the coin fell to 8,500 dollars. This drop has affected the cryptocurrency market and it is has been struggling ever since to come back to its previous mark in the $350 billion regions. Many other cryptocurrencies have also suffered a drop in value as a result except that of small coins like Ontology and Ethos.
Bitcoin and Ethereum Record No Hike
The two most popular coins in the crypto market, Ethereum and Bitcoin, are unable to make any significant change to the price drop scenario since the crash on March 25th. The only change incurred was a minimal decline in Bitcoin price from $8,580 to $8,490, hardly more than 1 percent. The trading volume of Bitcoin on a daily basis is around $4.5 billion, that is three times more than the daily trading volume of Ethereum.
The second most liquid cryptocurrency in the market, Tether, sustains a daily trading volume of $1.4 billion at the moment. The most useful advantage of Tether is that it is used as a hedge for determining the value of cryptocurrency in the market. This is because most traders use Tether to judge the position of crypto coins and their value instead of using regular currency for risk comparisons. Binance, a popular cryptocurrency exchange, allows users to make cryptocurrency and Tether pairings, to hedge for risks and even in times when the market is most volatile. One indication of cryptocurrency risks and instability comes from the extreme high daily trading volume of Tether. It also means that a large portion of users are hedging the value of cryptocurrencies.
CEO of Binance, Changpeng Zhao, commented to CNN that the trading volumes for most cryptocurrencies are back up on exchanges. However, this amount is still low especially when compared to the volume that was traded back in March first week when Bitcoin was at a higher value of $11,700.
In comparison to the crypto markets in South Korea and Hong Kong, premiums for Bitcoin are still higher than in most countries. Premium in South Korea, is at $8,723, a small 3.2 percent higher than in the US crypto market. A cryptocurrency brokerage platform called Gatecoin which allows bitcoin-to-cryptocurrency trades in Hong Kong, has priced Bitcoin in the $9,000 region.
There still appears to be investments from prominent markets in Asia, and premiums on Bitcoin are maintained relatively high. Countries with strict regulations or low trading premiums have their investors moving to markets in Hong Kong and South Korea for trading. Many Chinese investor have joined the Hong Kong market to trade cryptocurrency especially after harsh regulation from the government.
Will Altcoins Prosper?
Although many smaller cryptocurrencies are unaffected by the drop in Bitcoin and its low daily trading volume, it is still too soon to predict whether smaller coins will prosper or not. It can be notified that numerous smaller coins have profited better than Bitcoin since the crash. Ontology and Ethos have both logged a gain of 20 percent more than Bitcoin over the past week and coins like Nebilo and Walton Chain are showing significant performance better than Bitcoin for the last five days.
Now, one of the reasons for altcoin popularity could be from their lack of significant progress in the past and recent outperformance over Bitcoin. Unless there is a steady and slow progress for Bitcoin, Ethereum, and Ripple to regain their previous value, altcoins will not be able to outperform for much longer. Bitcoin was previously valued at $12,000, Ethereum was $900, and Ripple was $1.
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