15.6 C
New York
Monday, September 27, 2021

Buy now

The fuming cryptocurrencies are on the sidelines of bitcoin and ether

The recent rebound of bitcoin and ether, locked in their own particular war, showed renewed investor interest in crypto assets but also revealed that the big bounces are taking place in other emerging digital currencies.

As reported by finance.com, two of these currencies are solana and cardano (ADA), which have experienced a strong rally in recent weeks, although the market did not leave out other ‘altcoins’ such as the avalanche or the cosmos.

If you go further, the ADA doubled its price in the last month, while the token solana soared about 234 percent. And only in August the Avanlanche tripled its price, in another flashy move that reflects the huge market interest in these alternative currencies.

Ethereum woes elevate other cryptocurrencies

All these currencies belong to networks known as Layer 2 alternatives and they come to increase the scalability of all the transactions that are normally made on the ethereum blockchain.

The problem is that “Ethereum currently has a very important bottleneck because there are many people who are using cryptocurrencies to invest and they are consuming the financial products known as DeFi on this blockchain, ”he says Alberto Toribior, Cryptoplaza ambassador.

For this reason, transactions on the Ethereum network are tremendously expensive. This is why in February, a 100% Ethereum compatible network, like Binance, became wildly popular. Many DeFi services were copied onto this network.

This was the beginning of the trend known as L2 or ‘layer 2’ of network scalability. And now there are many additional solutions to Binance that are trying to scale decentralized finance services.

Binance pullback triggers altcoins

The problem is that “These solutions are getting ahead of Binance itself, due in part to all the problems the company itself is experiencing and the problems DeFi services are having in this red ”, adds Toribio.

This is the reason why many users migrate to alternative networks, such as Terra or Cosmos. This is an early discount of what these networks can get to capture in the coming months.

It all has to do with the enormous popularity that the so-called DeFi environment or decentralized finance has acquired. Has shoots the ‘FOMO’ or fear of being left out of the rally, which has forced many investors to enter the market.

The abundance of liquidity triggers enthusiasm

It is also true that the ultra-low interest rates, the liquidity that floods the market and the few profitable investment alternatives, is one more incentive for the money to end up in the crypto asset markets.

There is no doubt that there is a lot of excitement in cryptocurrencies “, said Yoni Assia, founder and CEO of eToro. “You can definitely see it in the industry numbers, whether by looking at total volumes or company volumes,” added this expert.

Somehow, a point of “market exuberance” has been reachedIn Assia’s words, this is complemented by what this expert calls the “generational buying moment”.

A recent eToro survey revealed that roughly a quarter of the 6,000 investors surveyed own cryptocurrencies, a figure that rises to nearly 50 percent among the younger population.

The importance of the Fed

An important conclusion of the study carried out by this firm is that a “significant” part of the investors surveyed has an interest in alternative currencies to bitcoin and ether.

For other experts, however, things are most easily explained by the accommodative monetary policies of the Federal Reserve.

With all this money floating around, it should come as no surprise that there are people who pay exorbitant amounts of money for digital stones. and a myriad of digital assets that can be easily created “, said Michael O’Rourke, Chief Market Strategist at JonesTrading.

The space is dominated by the younger generations and all they know is a Federal Reserve that has been almost perpetually accommodative, this expert summed up.

With this vision he disagrees Toribio when he admits that liquidity is more of a “background factor.” The key is that what is happening in the market “has to do with the search for alternative investment sources,” sums up the Cryptoplaza ambassador.

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: [email protected] Phone: +1 513-209-1700

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected


Latest Articles