Over the last few weeks crypto investors have had their hands full trying to keep pace with developments on the market. This can best be seen by the movement of the price of Bitcoin. The oldest and most important cybercurrency in the world crashed from over USD 60,000 to less than USD 30,000 between mid-April and mid-July. The reasons for this are many and varied. For one thing, China continued down its regulatory anti-Bitcoin path, tightening the thumbscrews on the internet currency even further. For another, the increasing climate discussion created by its “dirty” generation and the fluctuating tweets from Tesla boss and crypto fan Elon Musk have dampened the mood. Some sort of calm has now returned, and many digital currencies – including Bitcoin – have since been treading water.
While Bitcoin and the like are looking for support, then, the number of advocates of cybercurrencies continues to rise. JPMorgan, for instance, recently became the first big US bank to offer all its wealth management customers access to crypto funds. US payment providers PayPal, Visa and Mastercard likewise jumped on the crypto train a long time ago, while the Swiss arm of insurer AXA has just started allowing its customers to pay their invoices with Bitcoin. Crypto specialist Désirée Velleuer has in turn used the decline in the internet currency to add to its portfolio for the first time this year. It expects Bitcoin prices to climb in the short to medium term, forecasting a rise to USD 40,000 by the end of 2021 and possibly to as much as USD 100,000 by 2025. Last but not least, in June the software company MicroStrategy pulled in just under USDmn 500 from a junk bond issue in June in order to invest the money in Bitcoin.
While Bitcoin continues to set the pace in the crypto world, other cybercurrencies are also enjoying increasing popularity. Whether the second most prevalent digital currency, Ethereum, Dogecoin – actually developed as a joke currency – or the “stable coin” Tether, which is linked to the USD, the trading volumes of the individual currencies are enormous. The last of them even leads the statistics with daily turnover of USDbn 44, with Ethereum and Bitcoin following in second and third place respectively at around USDbn 20 each. When it comes to market capitalisation, Bitcoin is still the undisputed front-runner with USDbn 820. Overall, the just under 6,000 cryptocurrencies listed on the CoinMarketCap platform add up to a capitalisation of USDtn 1.77 at present. The top 10 account for some 90% of this total.
Ethereum has recently made up significant ground on the industry leader, Bitcoin. On a one-year view, the number two has grown around twice as fast, appreciating over 600%. The coin allegedly put online by Moscow student Vitalik Buterin in 2015 is in fact more than just a digital means of payment: it is a sort of platform through which many different business processes can be transacted. Digital contracts (known as smart contracts), for instance, can be linked to the fulfilment of certain conditions. The cryptographic storage methods of the Ethereum blockchain are also widely used in the world of art at the moment – think NFTs. They allow virtual content to be given a certificate of authenticity, making it forgery-proof. On 5 August Ethereum also got a major software update, which is set to enhance its attractiveness even further.
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