Bitcoin, despite its volatility, has shown bullish trends over the last year and even today. But the real story is the interest of investors to different altcoins. Let’s take a closer look at Dogecoin, for example. Dogecoin is a cryptocurrency made as a parody.
Dogecoin started in 2013, making use of a Japanese Shiba Inu dog that has been popular in movies (Hachiko) and social media. The creators of dogecoin made this digital currency as a means to send tips for contents online.
But recent months is somewhat surprising even for its founder, Jackson Palmer. Jackson Palmer, dogecoin’s founder who left in 2015, mentioned that the token had a sharp jump in price despite not having any type of software update for more than two years.
Dogecoin now has a market value of more than $1 billion. Dogecoin last month made a sharp rise by more than 400% and even reached a $0.01 price.
The total value of all cryptocurrencies today is at $750 billion. Bitcoin still dominates the industry with around 40% of the entire market share.
According to Dave Chapman, managing director at Octagon Strategy, a Hong Kong-based commodities and digital assets trading house, “the most significant contributing cause for altcoins to rise so parabolically is owing to the perception of “cheap” coins”.
He also added that “the two most well-known cryptocurrencies are considered expensive for most new entrants. Despite being able to purchase a fraction of each, there is a real psychological barrier around owning something in its entirety”.
He further explained that 2,000 ripple coins can cost around $6,000. And this could explain why Ripple had a steady increase in value recently. In the last month, Ripple has increased by 1240% and has become the second largest cryptocurrency. Around the same time last year, Ripple was just trading for under $0.7. Its market capitalization today is at $130 billion while Ethereum is at $96 billion. And just two weeks ago, Ripple’s market capitalization was just at $36 billion.
As for its co-founder Chris Larsen, this makes him worth $55 billion tying with Mark Zuckerberg as the fifth richest man in the world today. According to reports, he owns 5.19 billion XRP and also has a 17% stake in the company.
What made altcoins such as Ripple so popular in such a short period of time aside from speculation? One, you have Bitcoin’s problems when it comes to the amount of time needed to clear transactions. Secondly, you have Ripple’s ability to settle cross-border transactions instantly making it useful for banks and financial institutions. In fact, there are 100 companies adopting the tech so far including West Pac and UBS.
Though it is true that movement in the price of some altcoins can be attributed to speculators and entry-level investors, it is true that there are altcoins that can pose serious competition against Bitcoin in the near future. For instance, Ripple also uses “permissioned” ledgers that use legal entities in order to validate transactions within the network in contrast to Bitcoin’s “unpermissioned” ledger dependent on anonymous miners.
Tip Swanson, a cryptocurrency researcher mentioned that “No bank’s going to want to put billions of dollars of value if it can be destroyed by anonymous validators”.
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