The recent rise of the crypto market has brought lesser-known cryptocurrencies to the fore, which are outperforming industry leaders, Bitcoin and Ether.
Cardano doubled this month, becoming the third largest digital asset. Binance Coin is also going up. Another token, called Avalanche, has tripled during August.
Some analysts assume that investors are moving from traditional assets to newer, more exciting digital ones, as they usually do after big uptrends. Others see a world overflowing with cash and extremely low interest rates, which ultimately push investors into other assets. Some tokens have the support of major technological advances, such as the Cardano and Solana networks.
The reasons behind their rise
“There is no doubt that there is a lot of enthusiasm in crypto,” said Yoni Assia, founder and CEO of the online trading platform eToro. “Surely you can see it in numbers, whether it is total volumes or company growth,” he said.
Assia calls it the “buying interest of the moment” and cites a number of events, including low interest rates worldwide and massive stimulus moves that brought money to many people during the pandemic.
Some of these funds have been invested in cryptocurrencies and related assets, such as shares in digital currency mining companies. About 15% of Americans who received the first two financial aid checks invested some or all of the money, and about half of that group invested in cryptocurrencies, according to a survey of more than 1.000 American adults conducted by The Harris Poll for Yahoo Finance. At the same time, inflation is rising as economies reopen, with some crypto marketers warning of hyperinflation. The combination of all the above “leads in people looking for different types of investments”, says Assia.
Huge interest in altcoins
A recent survey by eToro found that the average investor is going to increase his position in cryptocurrencies in the months to come, and that interest in alternatives beyond Bitcoin and Ether is “significant”.
Downloads of cryptocurrency trading applications are on the rise – Coinbase Global ranks 11th among financial applications in Apple iPhone downloads, according to App Annie, a mobile data and analytics provider. The digital trading platforms Kraken, Voyager Kraken and Crypto.com have also topped the list.
There is a lot of interest in altcoins such as Cardano, Avalanche and Dogecoin. The Bloomberg Galaxy DeFi Index, meanwhile, has risen about 50 percent since early July. At the same time, there are blockchains that want to compete with Ethereum. Avi Felman, portfolio manager at BlockTower Capital, said that now that the recent upgrade of the Ethereum network has been completed, investors are turning their attention to competing blockchains and their respective tokens.