- Many altcoins are observed surging with the ascent of Bitcoin
- Institutional establishment in the crypto market is the main factor driving the prices higher
- Cryptocurrencies are a valuable alternative in investment portfolios
Bitcoin has surged tremendously with great pace in recent months and achieved new all-time highs at the price level of $46,477. Witnessing the flagship crypto token to achieve new highs, it is also observed that altcoins, including Ethereum and Litecoin, have seen similar bullish rallies. On the other hand, Exchange Traded Products (ETP) linked to cryptocurrency have witnessed their shares price skyrocketing. The Grayscale Bitcoin Investment Trust (GBTC) has been found jumping by more than 49% since last new year. However, the shares of the traditional market and gold trust were found declining.
Factors driving the prices of Bitcoin and altcoin higher
The institutional establishment causes the recent continuation of momentum in the adoption of cryptocurrencies. Earlier this week, the Chicago Mercantile Exchange (CME) launched the latest trading feature in Ethereum Futures contracts. Moreover, the facilities’ addition was announced back in December. Since then, the ETH tokens have doubled. Another factor is Elon Musk, the CEO of Tesla, as his influence is so high that his comments can surge the value of any cryptocurrency. In a recent filing with the United States Securities and Exchange Commission (SEC), it announced the purchase of $1.5 billion worth of Bitcoin. Additionally, the firm also revealed its plans of accepting Bitcoins in exchange for its products.
On the other hand, PayPal had introduced cryptos payments for its merchants and consumers in October. Simultaneously, PayPal also facilitated the ability to trade such currencies.
Cryptocurrency as a valuable alternative investment
According to Matt Hougan, the CIO of Bitwise Asset Management, cryptocurrency can be a valuable alternative investment. Cryptocurrencies have high potential returns, low correlation to other assets, and liquidity. Many investors and financial advisors in the cryptosphere are waiting for the US SEC to approve Bitcoin ETFs, trading without premiums, discounting the current generation of cryptocurrency-linked ETPs experience.
It is also observed that the adoption of cryptos has been soaring by retail and institutional investors. Grayscale crypto trust charges a hefty amount of 2%, and other crypto-linked products also come with similar elevated expenses. With a maturing crypto market, improved ETPs are expected to come, and the steep fees will be compressed. According to several Crypto enthusiasts, there are expectations of several positive outcomes if the market continues the bullish trend.
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