Tech
Crypto Altcoins Are Outperforming as Bitcoin Price ‘Gravitates’ Toward $50,000
Smaller, lesser-known digital currencies are outperforming Bitcoin after the market benchmark soared in recent weeks.
Cardano rose as much as 30% on Friday, while Solana gained about 8% and Avalanche rose 12%. Meanwhile, Bitcoin rose about 2% and Ether fell about 1%. Together, the two largest tokens account for about 70% of cryptocurrencies’ $1.6 trillion market capitalization.
“After the huge rallies that Bitcoin and Ethereum have seen, it is no surprise that they are taking a bit of a sideways pause,” said Matt Maley, chief market strategist at Miller Tabak & Co. “However, the fact that these altcoins are recovering so strongly today tells me that people have not lost any love for the overall asset class.”
Solana is among the blockchains competing with Ethereum, the main cryptocurrency trading superhighway, for a larger share of digital asset activity.
Options traders have placed big bets on Bitcoin rising to $50,000 by January, when many market watchers expect the SEC to finally allow ETFs to directly hold the cryptocurrency.
“I expect the current uptrend to persist, with Bitcoin gravitating towards 50,000, where options strikes are concentrated,” said Teong Hng, CEO of cryptocurrency investment firm Satori Research.
Bitcoin has surged more than 60% since mid-October, when speculation erupted that the Securities and Exchange Commission was on the verge of approving ETF applications from asset management giant BlackRock. The token was trading around $44,100 on Friday.
“Bitcoin’s price action today shows that while it is sensitive to interest rate expectations, it is not the primary driver,” said Craig Erlam, senior market analyst at Oanda. “Crypto traders have been increasingly bullish since it became clear that it is a question of when, rather than if, an ETF will be approved. Lower rates simply help this move.”