Bitcoin’s price has been doing well lately; following a steady, ascending trend for the past several weeks as the leading virtual currency climb toward the all-time high they set earlier this year. The world’s largest cryptocurrency by market capitalization reached $51,037.01 today; its highest since May 14. It is believed that at this point, it had risen more than 75% since hitting a local low on June 22.
Amidst Bitcoin’s impressive comeback, other virtual currencies have been outshining bitcoin lately with their superior performance. Ether, the second-largest cryptocurrency, more than doubled in the past few months, and Cardano’s ADA token tripled during the same time. Ether reached $4,026.93 earlier today, having climbed more than 130% after falling to a recent low of $1,711.23 two months ago. After the recent all-time high, Ether was up more than 400% year-to-date.
Cardano’s ADA token has been getting even more compelling gains, and has rose to an all-time high of $3.10 yesterday, at which point it had climbed more than 200% after reaching a local low of $1.00 June 22.
These latest developments makes us wonder if Bitcoin is still the market leader it has been for years. Unlike the early days of digital assets where Bitcoin was the only game in town, this asset class has now evolved far beyond cryptocurrencies. Over the past 12 months, there’s been an incredible amount of institutional and even sovereign interest in the space. This interest has been focused almost exclusively on Bitcoin.
Big-time asset managing firms like Capital, Fidelity, Blackrock, and Tudor are trying to build Bitcoin exposure, but are still largely limited to listed proxies and derivative products. Even if Bitcoin is the poster child of crypto, bifurcation and a decrease in correlation was to be expected in the long run.
As time goes on, it is expected that individual virtual assets will derive their values less from speculation and more based on their own specific characteristics. Bitcoin has emerged as a store of value and inflation hedge while Ethereum has become the currency for DeFi and NFT applications, and thus in many ways the reserve currency for Web 3.0.
Think it is safe to say that Bitcoin will follow more macroeconomic trends as it is doing right now.
“This is an exciting transition as we are seeing some of these more blue-chip cryptos come into their own beyond being used as tools for speculators.”