Why Altcoins Continued Their Weekend Rally on Monday
These days, we are experiencing one of those delightful periods when it seems cryptocurrencies just aren’t going to obey gravity. The latest rally in such assets blasted through the weekend and into early Monday evening, with a mass of coins, tokens, and assets directly or even tangentially related to digital currency rising high.
Some posted gains well into the double-digit percentages. Among the notable weekend winners was MultiversX (CRYPTO: EGLD) with a massive gain of nearly 37%. Utility tokens Chainlink (CRYPTO: LINK) and Filecoin (CRYPTO: FIL) held their own with respective 16% and 12% increases, and native Bored Ape Yacht Club cryptocurrency ApeCoin (CRYPTO: APE) enjoyed a 10% pop.
Time to run some profits
The economic landscape is seen as being increasingly favorable to cryptocurrencies of all types and sizes. The Federal Reserve’s decision last Wednesday not to raise its key interest rate fueled already bullish sentiment on such investments.
That’s because, all things being equal, the more modest that interest rates are, the better the environment is for cryptos. Bulkier rates make safe-harbor assets like bonds more attractive, as their interest payments broadly rise with those of the Fed’s rates. And when safe plays become more lucrative, they tend to lure investors more than the risky stuff — coins and tokens being Exhibit A for this latter category.
What’s probably more exciting for digital currency bulls, however, is the coming dawn of the spot crypto exchange-traded fund (ETF).
Recent legal rulings seem to indicate growing acceptance for these securities; while there are currently scattered crypto ETFs available for investment, they are basically synthetic since they don’t put capital directly into these assets.
But recent developments augur well for “true” crypto ETFs, and several companies already have such products teed up and ready to go once they can legally list them for investment.
Bitcoin was a bit of a bust
As the late-night infomercial people like to yell, “But that’s not all!” Altcoins were also on the rise because their fearless leader, the pioneering Bitcoin, was in stall mode.
It’s always a nervy time when an asset reaches an all-time price peak, and that’s what happened with Bitcoin at the start of November. At one point, the bellwether coin, which is the wizened old man of the crypto world dating from the ancient days of 2009, hit a price of nearly $36,000.
More than a few investors discovered their fear of heights at such a lofty level, and Bitcoin’s price has retreated some since then. In highly charged environments like this one at present, a comparable asset must be found — and more than a few altcoins are helping to fill that void.
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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Chainlink. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
