Bitcoin's recent price gains have spread to other cryptocurrencies and altcoins, according to Charles Hayter, chief executive officer and founder of CryptoCompare, which provides data on cryptocurrencies, MarketWatch reported. Ark Invest and Ethereum have been among the winners. Chris Burniske, a blockchain analyst and product…
Bitcoin’s recent price gains have spread to other cryptocurrencies and altcoins, according to Charles Hayter, chief executive officer and founder of CryptoCompare, which provides data on cryptocurrencies, MarketWatch reported. Ark Invest and Ethereum have been among the winners.
Chris Burniske, a blockchain analyst and product lead at ARK Invest, said bitcoin’s gains, driven by the fall of the Chinese yuan, are filtering into the broader market as bitcoin traders look to reinvest their profits. Cryptocurrency investors typically put profits in other cryptocurrencies rather than fiat currency.
Two of ARK Invest’s exchange traded funds have exposure to bitcoin by holding shares in Grayscale’s Bitcoin Investment Trust.
Over the past month, bitcoin’s market capitalization expanded by about $4 billion. If investors reinvested gains in other digital currencies, the market for bitcoin’s rivals would double in size, Burniske said.
Most exchanges don’t enable investors to trade fiat currencies for altcoins. Those who want to invest have to first purchase bitcoins, then exchange them for the desired altcoin, he said.
Ethereum, the second-largest cryptocurrency, nearly doubled in the past month, moving from about $6 per Ether to $10.50 on Wednesday, according to Coin Market Cap data.
Ethereum had fallen sharply after an unknown hacker removed nearly $50 million worth of Ether from the DAO (Decentralized Autonomous Organization). To recover the stolen funds, its developers engineered a controversial software update that reversed part of the Ethereum blockchain. A group of Ethereum investors objected and refused to adopt the update. Ethereum then split into two separate coins, Ethereum and Ethereum Classic, both of which experienced modest gains in the past week.
Cryptocurrencies offering enhanced privacy capabilities surged after the IRS in November ordered Coinbase to provide records of customers’ transactions.
Zcash and Monero, altcoins with enhanced privacy capabilities, both rose sharply in recent weeks. Hayter said both currencies have more extensive privacy features built into their networks than bitcoin.
Monero’s value more than doubled over the past month, from about $8 to about $17.
Kraken, another U.S.-based exchange, began trading Monero, also contributing to its gains, Hayter said.
Zcash, which has been volatile since it launched in November, rose from $34 to $52 in the past two weeks.
The Securities and Exchange Commission on Wednesday announced it was delaying its decision on approving a bitcoin exchange-traded fund proposed by Tyler and Cameron Winklevoss. Despite the delay, many believe an approval would unleash a big influx of institutional capital into the market, driving the bitcoin price even higher, said Marco Streng, chief executive officer at Genesis Mining.
A final decision on the Winklevoss ETF is expected in March.
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Last modified: January 26, 2020 12:01 AM UTC