Top 10 Cryptocurrencies See Green After a Tumultuous Week
Bitcoin (BTC)–After one of the hardest hitting weeks to the crypto markets in an otherwise bearish year, the top ten currencies by market capitalization appear to be in recovery.
On Monday, the total market capilization of cryptocurrency dipped below $200 billion for the first time since last year, signaling a relative low from January 2018’s near-trillion dollar valuation. Altcoins in particular experienced a severe decline, with currencies across the board posting double-digit losses throughout the week.
Ethereum, an otherwise stalwart coin that has both developers and investors excited over, dropped to a valuation not seen since last year, making for a full retraction in value following the bull run to start the year. Various analysts disagreed over the exact reason for the plunging price of Ether, but two predominant theories emerged. The first was proposed by Biswas Das, director of crypto hedge fund BloomWater Capital, who blamed the ICO market for causing a decline in Ethereum. According to Das, the falling crypto markets in addition to jumpy venture capitalists were leading to a mass sell-off in the Ether collected for ICOs–in part to cover costs, but also to lock in profits ahead of a total market collapse,
“These startups are raising a lot of funds but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market. It was fine last year but right now the the market is so fragile that it causes a lot of pressure.”
Arthur Hayes, CEO and co-founder of crypto exchange BitMex, echoed the sentiment that ICOs were hurting the price of Ethereum, making a bold claim that he believed price depression would lead to Ether dropping below $100.
While Ethereum benefited through most of 2017 and early 2018 from the massive boom in ICO development, of which almost every project is built upon the ERC-20 platform, the plunging price of crypto has led the initial coin offering venture capitalists to force sell Ether. However, in a statement to CCN, eToro’s Mati Greenspan blamed the sinking price of cryptocurrency and Ethereum on a strengthening dollar. According to Greenspan, efforts to stave off inflation in the United States is leading to a stronger dollar, which means investors have less incentive to shelter their funds from inflation in cryptocurrency, particularly with the massive price volatility currently wreaking havoc on the market,
“As the United States moves to tighten its economy and avoid strong inflation, they’re taking action that is strengthening the Dollar. Because the US Dollar is the global reserve currency, many smaller economies rely heavily on a stable exchange rate with the greenback. So too, as the Dollar is being seen as a stable store of value at the moment, there really isn’t much incentive for people to store their money in digital assets.”
Most of the market is still hinging upon a decision by the United States Securities and Exchange Commision (SEC) over whether to approve a Bitcoin Exchange-Traded Fund. The belief is still that institutional investors and most Wall Street players are waiting for greater government regulation in the cryptomarkets before entering, which has produced a large amount of interest over ETFs.
As of writing, total market capitalization was holding at $210 billion.