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Since then, the price of Bitcoin has undergone a correction, and most of the crypto market has followed. Bitcoin currently sits at just over $ 35,000, and while traders suggest the pullback is a healthy correction needed for Bitcoin to maintain its bullish momentum, some believe the cryptocurrency could dip below $ 20,000.
Bitcoin price action was also reflected in the altcoin market, as it usually does, with many popular cryptocurrencies blazing alongside BTC. Notably, Ether (ETH), the native token of the Ethereum platform, doubled in value last month and currently stands at over $ 1,300.
Although Bitcoin hit its previous high, several top 100 coins have yet to do so despite substantial price spikes. This may suggest that a new alternate season may be coming, especially as several DeFi tokens enter the top 20 market cap even though the direction of Bitcoin’s price remains uncertain. Jonathan Hobbs, the author of The crypto wallet and a former digital asset fund manager, told Cointelegraph:
“Bitcoin dominance has started to decline against altcoins. While this is not yet a full-fledged ‘alternate season’, the signs are certainly there for one. I would love to see Ethereum break through the $ 1,500 level for final alternate season confirmation. “
While the latest crypto rally took the global cryptocurrency market cap to $ 1 trillion, there have been a few notable cryptocurrencies that have failed to keep up with the growth of Bitcoin for various reasons.
Ripple and the law
After bullish action in November, the price of XRP began to fall sharply on December 22, following reports that the United States Securities and Exchange Commission was preparing to take legal action against Ripple, its CEO. , Brad Garlinghouse, and co-founder Christian Larsen. Since the company has overcome other issues with regulators in the past, many hoped the news would come to nothing.
However, on December 23, XRP had fallen 41% and exchanges started pulling out the cryptocurrency. At the end of December, XRP was removed from the list of major exchanges such as Coinbase, Binance US, and OKCoin, with a few exceptions like Uphold and GateHub, leaving the crypto for trading until the court ruling. Currently at $ 0.28, XRP has fallen about 47% in the past 30 days.
Keep up with Ether
As Bitcoin rallied throughout December and January, Ether rallied alongside it. Since December 18, Ether has grown significantly, although so far it has barely managed to reach its all-time high. However, other smart contract-centric projects did not follow, even with the Ether rally. These include NEM, EOS, and Tron, all of which are in the top 30 of the biggest monthly losers in the Top 100 Cryptocurrencies by Market Cap list.
While NEM lost 21.6% of its value in the past 30 days, it did so after a massive price hike during the month of November. EOS and Tron prices fell 11.6% and 2.69% respectively. Block.one, the company behind the EOSIO ecosystem, and Tron have faced regulatory issues in the past, with the former fined $ 24 million from the SEC in October 2019 and the latter currently doing the the subject of a lawsuit concerning its first offer of parts.
However, it seems that a more plausible reason why these projects fail to grow alongside Bitcoin is that they are seen as direct competitors to Ether, which has seen good progress over the past month and is home to most of the DeFi industry. Hobbs told Cointelegraph:
“Bitcoin and Ethereum have already proven themselves with real world use and powerful network effects. Bitcoin is digital gold. Ethereum hosts over 95% of all DeFi smart contracts. I think that makes them less speculative than other digital assets right now. “
Monero, Dash, Zcash and other privacy coins
Privacy coins were also subject to regulatory criticism in 2020. On January 1, the US exchange Bittrex announced that it would be removing Monero (XMR), Zcash (ZEC) and Dash, the three largest cryptocurrencies centering on anonymity in the market. While the delisting of these cryptocurrencies is a Bittrex initiative, it comes as no complete surprise, especially as regulators continue to crack down on crypto.
On December 23, the U.S. Treasury Department’s Financial Crimes Enforcement Network released a proposed rule change, in which it said anonymity-enhanced cryptocurrencies, like the ones mentioned above, are increasingly popular. more popular and are considered to be more closely associated with illicit activities such as money laundering and ransomware attacks.
As frequent hacks on decentralized finance and other cryptocurrency sets continue to occur with funds being wiped out in crypto exchanges, it also makes sense that sites want to disassociate themselves from the untraceable money laundering and get away with it. comply with any future regulations.
As a result, confidence in privacy coins seems shaken. Monero and Dash rose 0.79% and 3.79% respectively over the past 30 days. While these numbers don’t look bad, they pale in comparison to Bitcoin’s price action. According to Dr. Octavius, co-founder of the DeFi OctoFi protocol, the growth of the DeFi space can help these types of coins survive any regulatory hurdles to come:
“For many of these projects their days as a ‘product’ are probably numbered, but the opportunities to pivot to existing ‘features’ are certainly plentiful. […] Those who value privacy will go to great lengths to find it, and as long as there is unauthorized access, projects that allow it can still thrive. “
CeFi Tokens
Tokens issued by centralized exchanges including Nexo, Unus Sed Leo (LEO) and Crypto.com Coin (CRO) are another predominant type of token that appears to have remained on the sidelines during the BTC rally. While the fundamental value proposition of these tokens remains the same, they are somewhat tied to the success of the sites they are associated with, being primarily used for discounts on trading or loan fees or other perks.
With the rise of DeFi, it seems likely that people would rather speculate on DeFi-related tokens or invest in the yield farming protocols themselves, which could explain the slow price action on these. active. LEO fell 1.66% and Nexo jumped 11.3% in the last 30 days.
What’s the next step for the alts?
While it’s unclear what the road is for coins like XRP, Dash, Monero, and ZEC, whose future appears to be heavily tied to upcoming regulations, it appears there is a general shift in focus. Interest in altcoins, especially as multiples DeFi tokens are starting to take their place in the top 20 market cap list.
When it comes to smart contract platforms, it also seems unlikely that Ethereum will be dethroned anytime soon, especially as the network continues to move forward towards the full exit of Eth2. However, not all of Ethereum’s competitors are doing badly, however, as for example, the price of Near Protocol (NEAR) recently jumped 106% in the current DeFi craze.
Some have noted that the current bull market is likely to remove speculative coins as more value is now focused on Bitcoin and Ethereum, a clear divergence from what was seen in the 2017 rally that brought BTC to its peak. previous historic peak.
On December 16, the price of Bitcoin broke its previous all-time high of just over $ 19,500, previously reached on December 17, 2017, according to data from CoinMarketCap. Since then, Bitcoin (BTC) has experienced an incredible bull run, which has taken the cryptocurrency to new highs, reaching an all-time high of $ 41,941 on January 8 and recovering by over 115% during that time.
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