Bitcoin price increased, capitalization also hit a high in the past 6 months, XRP was undervalued
Since the beginning of 2020, the cryptocurrency market is growing at a remarkable pace, from Bitcoin to Altcoin. Despite the sharp increase in Bitcoin price, Bitcoin Dominance is still declining. In other happenings, James Todaro, managing partner of Blocktown Capital, recently compared Blockfi’s 5-year Bitcoin interest payments and compared them with the S&P500’s profits.
Bitcoin price increased, market capitalization reached its highest level in 6 months
The cryptocurrency market is starting the new year conveniently and excitingly. Market capitalization has risen to $ 300 billion. The last time the crypto market witnessed this level was in August 2019. In early 2020, the crypto market capitalization hovered around $ 190 billion. This means that within 45 days, this number increased by $ 110 billion, recording a growth of 60%.
Capitalization growth comes in the context of the increase in most coins, not just Bitcoin (BTC). Bitcoin Dominance is the dominance of Bitcoin, expressed in percentage of capitalization that Bitcoin accounts for over the total capitalization of the entire cryptocurrency market.
At the beginning of this year, Bitcoin capitalization accounted for more than 68.5% of the total market capitalization. But, at press time, Bitcoin Dominance is at 61.8%, losing about 6.7%. For many, this means that the Altcoin season is happening, and the numbers speak for themselves.
At press time, Bitcoin price is fluctuating around $ 10,396, up slightly by 1% in the past 24 hours. Ethereum (ETH) has increased by over 90% since the beginning of the year, while other coins and tokens have also achieved incredible returns. Large-cap altcoins have been surging sharply since the beginning of 2020. Most notably, Bitcoin SV and Tezos, are marking a three-digit increase of 123% and 150%, respectively.
XRP is undervalued
A trader and analyst, Luke Martin, confirmed that XRP is being priced relatively lower than other major altcoins. Martin’s view also clearly describes the volatility of the cryptocurrency market at the moment and confirms that capital flows will continue to flow into the crypto industry.
$XRP should be around 30% higher.
Every other major altcoin has reached the neckline. Most already had their breakout.
— Luke Martin (@VentureCoinist) February 12, 2020
The trader community has been discussing the phenomenon for years. However, Martin pointed out that XRP has not increased significantly compared to most other significant altcoins, especially Ethereum. The value of XRP has not changed much since Martin made his comments while some platforms have been seeing a slight increase of the coin over the past few hours.
Contrary to Martin’s fairly accurate analysis, XRP has had the best month of growth since New Year’s Day, outperforming the top coins. Therefore, the next target price of XRP is quite difficult to determine.
Bitcoin price and cryptocurrency market are still highly speculative
Unlike other types of assets, cryptocurrencies do not have a clear position in the global economic system. Most platforms have not yet really reached the application level with cryptocurrencies. The current environment has increased the level of risk and volatility for the market.
Crypto traders ultimately have a general idea that platforms will fail. Only a few will gain mass adoption and become valuable in the market. And with the point mentioned above, Martin thinks that is the basis for XRP being undervalued.
Signs of recovery of the cryptocurrency market have created an upbeat atmosphere in most markets. However, we must also clearly distinguish between value and application rate. The fact that Blockchain platforms can rise and fade in the early afternoon is now available. Therefore, before making trading decisions, we still have to consider the level of speculation.
Crypto-saving accounts are a game-changer
James Todaro, founding partner of Blocktown Capital and co-founder of the MedX protocol, said the profits from Blockfi’s five-year Bitcoin investment worth $ 10,000 at 5.1%. Blockfi is one of the leading crypto loan startups in the US and has many profitable crypto savings services available.
Bitcoin interest vs S&P 500 & Treasury bonds over past 5 yrs at BlockFi’s 5.1% interest rate.
It’s easy to think in terms of fiat where interest earned is often negligible…This isn’t the case for BTC, where interest alone becomes a large sum of money. #Bitcoin @TheRealBlockFi pic.twitter.com/F3B2oMht7u
— James Todaro (@JamesTodaroMD) February 12, 2020
According to Todaro’s analysis, Bitcoin will outperform both the profits of the S&P 500 and the profits of the United States Treasury, both popular investment vehicles used to overcome inflation.
If you invested $ 10,000 in Blockfi’s Bitcoin savings account, you would make $ 122,380 just from the interest in five years compared to $ 6,166 on S&P 500 and only $725 on T-bills.
There’s an excellent reason for Bitcoin-backed banks to exist, even to issue their digital currency. Bitcoin itself cannot scale so that every single financial transaction in the world is broadcast to everyone and put on Blockchain. We need to have a second level of the lighter and more efficient payment system.
Bitcoin-backed banks will solve these problems. They can work like banks did before nationalizing currencies. Different banks may have different policies, some more aggressive, some more conservative. Some will be stockpiling reserves, while others may have 100% Bitcoin support. Interest rates may vary. Cash from some banks can be discounted compared to money from others.
Startups such as Blockfi, Celsius Network, Cryptolend, and Paw Oklahoma may be the first severe and regulatory compliance efforts to achieve the vision of a monetary future. Bitcoin and profitable cryptocurrencies could be the next big cryptocurrency trend.
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