First Mover: Don’t Like $34K Bitcoin? Stellar, Litecoin Yet to Conquer Old Highs
Bitcoin snapped a four-day losing streak, appearing to stabilize around $34,000. After the recent market correction, prices for the cryptocurrency are still up 18% year-to-date, versus a 1.2% gain for the Standard & Poor’s 500 Index of large U.S. stocks.
“Now is probably not the time to panic,” Matt Blom, head of sales and trading at the cryptocurrency exchange firm Diginex, wrote in a daily newsletter.
In traditional markets, European shares fluctuated and U.S. stock futures were little changed as the U.S. House of Representatives on Wednesday prepared to vote on a second impeachment of President Donald Trump. Gold strengthened 0.1% to $1,855 an ounce.
As bitcoin and ether retreat from recent highs, the strong performance of other cryptocurrencies shows that traders and investors may now be turning to alternative tokens, often referred to as “altcoins,” for returns.
Bitcoin prices as of Jan. 11 stood at about 87% of their all-time high reached last week, and ether is about 78% of the way toward its all-time high from a few years ago, based on data compiled by CoinDesk Research.
But other cryptocurrencies and digital assets, such as stellar (XLM) and litecoin (LTC), are still far from setting new records. One takeaway might be that they might have further to run, CoinDesk’s Muyao Shen reported Tuesday.
Altcoins are surging “in ways that we have not really seen since 2017,” Andrew Tu, an executive at quant firm Efficient Frontier, told Shen.
It’s possible, of course, that some entry-level investors viewing bitcoin’s $34,000-ish price – what a small sport-utility vehicle costs – are unaware that the largest cryptocurrency can be bought in minute fractions, similar to the way that it’s possible to buy $100 or $1,000 of gold.
Such confusion in the past has led some newbie investors to turn to altcoins, because their prices are often comparatively lower, sometimes counted in cents.
David Derhy, an analyst at the trading platform eToro, wrote earlier this week that some traders might shift toward ether, the base cryptocurrency for the Ethereum blockchain.
“Investors in bitcoin may be looking to take some profits and reallocate, and ether could be a target,” he wrote. “A target of $2,500 is reasonable given the gains we have already seen and current price momentum.” Such a level would represent a gain of nearly 150% from the current price.
Simplex, a digital-asset platform, has been seeing “increasing demand for cryptos across the board,” though “retail investors seem to be looking for the next BTC,” CEO Nimrod Lehavi, wrote in a Google doc, sent by a spokesman via Zoom’s chat function.
“We are used to seeing BTC dominate around 90% of the total volumes of trade,” says Jonathan Leong, CEO of BTSE, another crypto platform. “But the recent week or so has seen a rise in our institutional clientele’s demand and interest in altcoins, with the balance being almost 50/50 at certain times.”
Bitpanda, an Austrian cryptocurrency platform, has seen bitcoin drop to between 30% and 40% of customer purchases this year, from 40% to 50% last year, according to a spokeswoman.
“We have a big influx of users, and they are trading both bitcoin and altcoins,” the spokeswoman, Sara Moric, said in an email.
– Muyao Shen and Bradley Keoun
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