Since then, Bitcoin’s price has undergone a correction, and much of the crypto market has followed. Bitcoin is currently at just over $ 35,000 and, although traders suggest that the pullback is a healthy fix needed for Bitcoin to maintain its upward momentum, some believe that cryptocurrency could fall below $ 20,000.
Bitcoin price action was also reflected in the altcoin market as it usually does, with many popular cryptocurrencies emerging along with BTC. Visibly, Ether (ETH), the native token on the Ethereum platform, has doubled in value in the last month and is currently over $ 1,300.
Although Bitcoin has surpassed its previous record, several currencies in the top 100 have not yet done so, despite seeing substantial price increases. This may suggest that a new alternative season may be coming, especially with several DeFi tokens reaching market capitalization of the top 20, even though Bitcoin’s price direction remains uncertain. Jonathan Hobbs, the author of The Crypto Portfolio and a former digital asset fund manager, told Cointelegraph:
“Bitcoin’s dominance has started to fall against altcoins. Although it is not yet a full ‘alternative season’, the signs are certainly there for that. I would like to see Ethereum break the $ 1,500 level for a final confirmation of the alternative season. “
While the latest crypto-rally has taken cryptocurrency’s global market capitalization to the $ 1 trillion mark, some notable cryptocurrencies have failed to keep up with Bitcoin’s growth for different reasons.
Ripple and the law
After some bullish action in November, the price of XRP began to fall sharply on December 22, after reports that the United States Securities and Exchange Commission was preparing to take legal action against Ripple, its CEO, Brad Garlinghouse, and co-founder Christian Larsen. As the company has overcome other issues with regulators in the past, many hoped the news would deliver nothing.
However, on December 23, the XRP plunged 41%, and exchanges began to cancel the cryptocurrency’s registration. In late December, XRP was removed from the list of major exchanges, such as Coinbase, Binance US and OKCoin, with some exceptions like Uphold and GateHub, leaving crypto for trading until the court’s decision. Currently costing $ 0.28, XRP has dropped about 47% in the past 30 days.
Tracking Ether
As Bitcoin recovered throughout December and January, Ether also recovered. Since December 18, Ether has grown substantially, although it has so far barely managed to reach its peak. However, other projects focused on smart contracts have failed to keep up with Ether’s rally. This includes NEM, EOS and Tron, which are among the top 30 for the biggest monthly losers in the list of the top 100 cryptocurrencies by market cap.
Although the NEM has lost 21.6% of its value in the last 30 days, it did so after a considerable price increase during the month of November. EOS and Tron prices fell 11.6% and 2.69%, respectively. Both Block.one, the company behind the EOSIO ecosystem, and Tron have faced regulatory issues in the past, with the former receiving a $ 24 million fine from the SEC in October 2019 and the latter currently facing a lawsuit over to its initial 2017 currency offer.
However, it seems that a more plausible reason for explaining why these projects are failing to grow along with Bitcoin is that they are seen as direct competitors to Ether, which had a great run last month and hosts most of the DeFi industry. . Hobbs told Cointelegraph:
“Bitcoin and Ethereum have already proven their use in the real world and strong network effects. Bitcoin is digital gold. Ethereum is home to over 95% of all DeFi smart contracts. I think that makes them less speculative than other digital assets at the moment. “
Monero, Dash, Zcash and other privacy currencies
The privacy currencies also suffered a regulatory fire in 2020. On January 1, the US stock exchange Bittrex announced that it would end the registration of Monero (XMR), Zcash (ZEC) and Dash, the three largest cryptocurrencies focused on market anonymity. . While removing these cryptocurrencies from the list was an initiative by Bittrex, this is not a complete surprise, especially as regulators continue to crack down on encryption.
On December 23, the United States Treasury Department’s Financial Crimes Enforcement Network issued a rule change proposal in which it stated that anonymous cryptocurrencies, such as those mentioned above, are becoming more popular and are believed to be more associated with illicit activities such as money laundering and ransomware attacks.
As frequent hacks in decentralized finance and other cryptographic sets continue to occur, with funds being discarded in crypto exchanges, it also makes sense for locals to want to disassociate themselves from non-traceable money laundering and comply with any future regulations.
As a result, confidence in privacy currencies appears to have been shaken. Monero and Dash were up 0.79% and 3.79%, respectively, in the last 30 days. Although these numbers don’t look bad, they pale compared to the price of Bitcoin. According to Dr. Octavius, co-founder of the DeFi OctoFi protocol, the growth of the DeFi space can help these types of currencies survive any future regulatory hurdles:
“For many of these projects, your days as a ‘product’ are probably numbered, but the opportunities to become ‘resources’ are certainly abundant. […] Those who value privacy will make a great effort to find it, and as long as there is access to it without permission, the projects that allow it can still thrive. “
CeFi Tokens
Another predominant type of token that appears to have been sidelined during the BTC rally was tokens issued by centralized exchanges, including Nexo, Unus Sed Leo (LEO) and Crypto.com Coin (CRO). Although the fundamental value proposal for these tokens remains the same, they are somewhat linked to the success of the locations with which they are associated, being used mainly for discounts on negotiation or loan fees or other advantages.
With DeFi on the rise, it seems likely that people would prefer to speculate on DeFi-related tokens or invest in the crop cultivation protocols themselves, which could explain the slow price action of these assets. LEO fell 1.66% and Nexo increased 11.3% in the last 30 days.
What’s next for alts?
While it is unclear what will happen with currencies like XRP, Dash, Monero and ZEC, whose future appears to be strongly tied to future regulation, it appears that there is a general shift in interest when it comes to altcoins, especially as multiples DeFi tokens begin to occupy its place in the list of the 20 main market values.
As for smart contract platforms, it also seems unlikely that Ethereum will be dethroned soon, especially as the network continues to move towards the full launch of Eth2. Not all Ethereum competitors are doing poorly, however, for example, the price of the Near Protocol (NEAR) has recently increased by 106% amid the current DeFi craze.
Some noted that the current bull market is likely to end speculative currencies, as more value is now concentrated in Bitcoin and Ethereum, a clear departure from what was seen at the 2017 high, which took BTC to its previous peak.
On December 16, Bitcoin’s price surpassed its previous record of just over $ 19,500, previously reached on December 17, 2017, according to data from CoinMarketCap. Since then, Bitcoin (BTC) has had an incredible bull run, which has taken cryptocurrency to new heights, having reached a record high of $ 41,941 on January 8 and rising more than 115% during that period.