After recording a minor correction on January 26, major cryptocurrencies including bitcoin, Ethereum, and Cardano increased by more than 5 percent.
NEM, which declined significantly in value after leading Japanese cryptocurrency exchange CoinCheck announced a $530 million hack into its NEM hot wallet, also recorded a 5.6 percent increase in price.
Bitcoin and Ethereum
Since a major correction occured in late December, most cryptocurrencies in the market have failed to recover back to their all-time highs. Bitcoin is still down nearly 50 percent from its all-time high at $19,000, and other cryptocurrencies like Ripple and Bitcoin Cash are almost down 70 percent from their all-time highs.
At one point, Ripple neared $150 billion in market valuation but as of January 27, the market cap of Ripple remains below $50 billion. That is a 3-fold fall within a two-month period.
Ethereum has fallen the least from its all-time high at $1,300, and has been one of the best performing major cryptocurrencies in the market. It has held above the $1,000 mark throughout several major correction and today, the price of Ether, the native cryptocurrency of the Ethereum network, increased by 4.6 percent.
Last week, the $9 billion financial service provider Stripe noted that due to the high fees and long confirmation times of the Bitcoin network, it has started to search for alternatives within the global cryptocurrency market to bitcoin. Stripe mentioned Ether and other cryptocurrencies launched on top of the Ethereum protocol such as OmiseGo.
“Fees have risen a great deal. For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires. Because of this, we’ve seen the desire from our customers to accept Bitcoin decrease. And of the businesses that are accepting Bitcoin on Stripe, we’ve seen their revenues from Bitcoin decline substantially,” said the Stripe team.
Currently, fees on the Bitcoin network are less than $1, because the daily transaction volume of bitcoin has declined over the past few weeks. When the demand for bitcoin spikes again as its price increases, it is likely that fees will increase as well.
Financial service providers like Stripe believe that in the short-term, businesses could move away from bitcoin due to its high fees to other alternatives like Ethereum. The adoption of Ethereum by retailers could be a driving factor for its mid to long-term price growth.
“We’re interested in what’s happening with Lightning and other proposals to enable faster payments. OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects,” added Stripe.
While the Ethereum network was not designed specifically to process payments, it has become a widely utilized digital currency. It is processing 7x more transactions than bitcoin, with a daily transaction volume of 1.4 million. The rapid increase in the user base of Ethereum has led its price to increase over the past few weeks.
For a month, Ripple has struggled to demonstrate any strong signs of recovery despite several high profile partnerships it had secured with companies such as MoneyGram and major South Korean banks. Japanese and South Korean financial institutions are expected to roll out Ripple integration by early February. If the integration turns out to be successful, it will be reflected positively by the price trend of Ripple. If not, the price of Ripple could continue to decline in the short-term.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:03 PM