We are all aware by now about the sudden drop in the values of top cryptocurrencies Bitcoin and Ethereum. However, while those two have been trying to recover from the drop in value, Crypto investors remain very much positive for the cryptocurrency market. A lot of people are seen looking into alternative cryptocurrencies and that has led to a rise in the value of several cryptos over the last few days. This is a classic move that investors make when trying to keep their increasing revenue stream growing constantly as they pull money out of their bigger stocks like bitcoin and ether and buying ‘altcoins’.
The market is clearly showing a big interest in making as much money as possible and the rising values seem to be backing that theory. According to some research done on the values of crypto and ether, the two have been sitting at 87% and 78% of their all-time high values as of January 11. However, even with a rising tide behind them, the altcoins still have a way to go before they hit their all-time high values. A lot of analysts and traders are speculating that some of these alternative cryptos could end up crossing their all-time high values during the current situation.
Efficient Frontier’s Andrew Tu said that “We have seen [altcoins] pump – both before and after [Monday’s] correction – in ways that we have not really seen since 2017.” Tu is an executive with Efficient Frontier which is a quant firm. The last high day for bitcoin was on January 8 when it crossed $40k and after it did, the currency has been seeing a downward trend since. Tu is also holding the same perspective and believes that investors are now using the profits that they gained from investing in bitcoin and ether and putting them into altcoins to increase their value and gain more profits.
There is a major FOMO reaction present in the bitcoin market since the beginning of 2020 when institutions and large investors joined to go for a bull run with bitcoin. The resulting surge in bitcoin value led to the ‘fear of missing out’ growing ever so steadily as more and more people joined in. In fact, data from CryptoQuant has shown that the premiums over bitcoin in Korea, also referred to as “Kimchi Premium” has grown to twice the size of what you would see in other markets.
Another reason for the steady growth in altcoins is the fact that the extremely large value of bitcoin makes small investors think of it as an affordability thing. Even though they can buy the bitcoin in extremely small chunks, they tend to go for the lower valued cryptos as they seem to be more “affordable” to them. In addition to that, the value of tokens has also seen a surge, especially in Defi part of the crypto market.
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