Amid the crypto market bull run, XRP, LTC and BCH are stagnant compared to Polkadot, Cardano and Binance Coin. Are these altcoins falling behind, and if so why?
- Crypto’s past bears shadow on its future as Yellen curbs crypto enthusiasm alleging illicit activity in crypto use cases.
- Ripple’s XRP continues to struggle with an incoming SEC lawsuit though efforts to surpass $0.60 levels have seen success.
- Litecoin futures are the third most traded behind Bitcoin and Ethereum, a mixed meaning for the coin. New addresses for Litecoin have however seen a positive slope this month.
- Bitcoin cash and other forms of Bitcoin ‘’forks’’ have been left in the shadow of a higher performing older brother; its removal from exchanges hinders its future.
- Overall, XRP and Litecoin remain in top ten altcoin positions, and Bitcoin Cash trails but only by a couple of spots.
Yellen yelling at Crypto…
The crypto surge has not been all glitter and gold lately. The recent Bitcoin price surge neared the $60,000 mark at $58,000 just days ago before crashing again as Jannet Yellen, now Treasury Secretary, called the digital currency an ''inefficient payment method''. Her position is with regards to energy consumption. It is true, and we have showcased this in our article on mining companies; mining firms use large quantities of energy to run warehouses full of mining rigs. Less true is her belief that bitcoin and cryptos are mainly used for illicit activities (which used to be correct but is no longer the case). As a figure of authority however, who could blame her for taking this position? It is almost imperative to take a stand against it (for good looks). With that said, a fall in crypto prices, offers a buying opportunity once again. This could very well lead to a continued growth in prices, especially as bond yields continue their northern run.
What are altcoins?
Alternative coins dubbed Altcoins, are any cryptocurrencies other than Bitcoin. As of 2020 there were more than 5,000 altcoins with different sub types including mining-based currencies, stablecoins, security tokens, and utility tokens. As of this writing, the largest altcoins by market cap are Ethereum, Tether, Binance coins and Cardano’s ADA. Mining-based altcoin generate coins by solving problems much like bitcoin does. The largest of its kind is Ethereum. Stablecoins reduce volatility seen in cryptos by tying their values up to physical currencies like the Euro. Diem, Facebook’s crypto project seeks to accomplish just that. Security tokens launch during an ICO and resemble stock since they are linked to a business. Utility tokens provide a claim on services and are designed to be exchangeable for decentralized file storage space.
Altcoins not making the top 5:
Ripple’s (XRP) SEC lawsuit…
XRP used to be the third largest crypto by market cap, and sits in 7th place today according to Coinbase, falling from grace so to speak. Tether, the stablecoin, and Binance Coin, have now taken up the competition with each other, and XRP has fallen behind. The main reason for this demotion is the lawsuit from the SEC. The SEC has put a halt to the asset’s rise with Coinbase halting the trade of the crypto altogether on January 19th, 2021, thus putting full brakes on price momentum. Since then, XRP trades below its all-time high of $3.84 from 2018. The SEC accused Ripple of selling unregistered securities through XRP which Ripple denies; Ripples believes itself to be an exchange and refutes claims made by the SEC that XRP is a security.
Litecoin’s futures markets and new addresses…
Litecoin is chasing its 2018 high, much like other altcoins. On Monday, it slid by 8.5% reversing weekend gains. LTC hit a three year all time high (still below 2018 levels) but is struggling to push up the resistance. According to Coindesk, the price of Litecoin currently sits at $178.04 in eight position with a market cap of nearly $12 billion. This comes after a 17% fall from an end of week high of $239.19. LTC’s network activity has grown alongside its price gains this year with the number of new active addresses rising 102,186 yesterday, according to Glassnode. The increasing trend in new addresses could set the pace for more to come, and perhaps even a reversal of Litecoin’s current position in the rankings. Litecoin’s made problem is the competition pushing prices down and other cryptos like Ethereum seeing momentum.
Litecoin futures contracts reached a record $584 million a couple of weeks ago, placing it third in crypto derivatives trading behind BTC and ETH. LTC futures aggregate open interest rose 285% over the past three months which is not necessarily positive since futures contracts necessitate a long and short position so more long also means more shorts. Litecoin remains the third-largest holding on the Bitwise 10 crypto index fund (BITW) with more funds added providing more evidence for a Litecoin future.
Bitcoin Cash bullied by bigger brother…
First, the difference between bitcoin and bitcoin cash: Bitcoin cash (BCH) forked off Bitcoin in 2017 meaning it spun off from the crypto much like Zoetis spun off Pzifer in 2013. BCH was created to satisfy a community desire to see a bitcoin protocol geared towards a medium of exchange proposition instead of a store of value. Bcash launched at $240 and rose to $731.59 last week, with a recent 24-hour low of $420.22. Recently, OKCoin delisted BCH to protect clients who are attempting to buy bitcoin. The exchanges leadership decided to scrap the BCH offering to simplify the buying process of BTC for new buyers. Talk about cannibalization!
All in all, Bitcoin cash competes directly with Bitcoin as a substitute good, it has created confusion for some investors, and some exchanges began delisting the asset in fear of losing out on orders. The same was seen in January when Australian exchange Independent Reserve delisted a bitcoin fork (Bitcoin SV another altcoin) following Kraken, Binance and ShapeShift who all decided to delist Bitcoin SV. It remains unclear if exchanges fear to miss out on Bitcoin order fees or if there is truly a community decision to respect the Bitcoin whitepaper and stick to the original Bitcoin.
The crypto mania continues, and despite being overshadowed by larger players Bitcoin and Ethereum, many altcoins are making their way up the ladder. Unfortunately for Ripple’s XRP, the near future is still too blurry with the SEC lawsuit for a clear upward trajectory to exhibit itself. Litecoin might inspire slightly more optimism due to a steady increasing number of accounts and its high-volume trading in the futures market. Futures offer more ways to trade the asset and could thus induce more adoption in the near future, especially as prices dip now welcoming new buy opportunities. Bitcoin Cash is in a bit of a tussle with Bitcoin doing so well. The main risk is for exchanges to continue dislodging it in favor of Bitcoin, but this type of manipulation should not theoretically affect the fundamentals of Bcash, which the market should naturally demonstrate.