Now that cryptocurrencies no longer have a regulatory target on their backs, they've got every reason to soar. President Biden's crypto-friendly executive order encourages blockchain development and innovation in the US, including the potential for a digital dollar. The crypto nod is validation for the 40 million Americans who have already had some exposure to cryptocurrencies.
The regulatory tailwinds initially catapulted the bitcoin price by a double-digit percentage to above the $40,000 level, but it didn't last. As is often the case, crypto continues to take investors on a roller coaster ride.
Bitcoin's dominance in the broader market hovers at 42.5%, so it wasn't long before other cryptocurrencies followed its lead. Crypto investors are in a Catch 22, with reason to be optimistic but also scratching their heads about whether the crypto winter in which prices get stuck in a rut is truly over. Nevertheless, the overarching sentiment in crypto has turned decidedly upbeat, and it's not all about bitcoin.
While investors can buy fractions of a bitcoin, the truth is there are thousands of cryptocurrencies to choose from that are coming from a much lower base than their larger peer. These cryptos are known as altcoins, and they tend to follow bitcoin's lead. Like anything else, there are winners and losers. Apple Computer Co-Founder Steve Wozniak recently addressed this very thing in the Wild Ride podcast.
The personal computer inventor has experimented with bitcoin and predicts that the price will eventually rise to $100,000 based on the “interest in crypto.” Wozniak warns that blockchain technology can be used “to rip people off,” particularly those projects with a celebrity endorsement that are just out to dupe investors looking to find the next bitcoin.
We thought now would be an excellent time to explore how some leading altcoins have responded to the regulatory nod.
Ethereum (ETH) is the second-biggest cryptocurrency based on market cap, and fans believe it can one day dethrone bitcoin as the head honcho. While the Ethereum price has had an impressive run over the past year, bitcoin still influences its direction. When the crypto executive order was published, the Ethereum price rallied alongside bitcoin, rising 7% to $2,761. When bitcoin started falling, the ETH price fell back to the $2,500 level in sympathy.
Regulators have already signed off on Ethereum, declaring they would treat neither it nor bitcoin like stocks, putting these two cryptocurrencies in a league of their own.
In addition, Ethereum is the leading blockchain for decentralized finance (DeFi) and non-fungible tokens (NFTs). It is not the only blockchain in town. Competing networks have grabbed market share, but Ethereum has a certain cachet.
BNB: Build ‘N Build
BNB coin is the native cryptocurrency of the leading cryptocurrency exchange Binance. BNB is the fourth-biggest crypto by market cap, as demand for the altcoin has grown alongside its number of use cases. BNB can be used across the vast Binance ecosystem and outside of it, including booking vacations on Travala.com or making purchases with the Binance Card.
BNB rallied 5% in response to the executive order to $400 but has since retreated. BNB is just as volatile as the other cryptocurrencies. Binance CEO Changpeng Zhao (CZ) believes the secret sauce is in building, which is why he declared that the BNB in the cryptocurrency's name now stands for “Build ‘N Build.”
#BNB stands for:
Build the community, aNd let the community Build.
Build'N Build. https://t.co/1QuK5rLxM6
— CZ 🔶 Binance (@cz_binance) February 9, 2021
Solana: Faster and Cheaper
Solana is one of Ethereum's chief rivals. As the No. 9 cryptocurrency based on market cap, Solana has come a long way in a short period, having made its debut in 2018. Solana claims to be the “fastest blockchain in the world,” processing up to 65,000 transactions per second (TPS), leaving bitcoin and Ethereum in the dust.
Similar to Ethereum, Solana is a popular blockchain for DeFi and NFTs. Also similar to its larger peers, the Solana price initially rallied on the heels of the executive order, rising from $82 to nearly $90, but currently, it is losing its grip on $80.
The cryptocurrency industry is also famous for its many meme coins, which have become synonymous with internet memes and tend to trade based on social media sentiment. Dogecoin was the maiden meme coin, and it was created as a joke to mimic bitcoin back in 2013.
Much to the surprise of crypto market leaders, Dogecoin and several of the meme coins created in its wake have soared in popularity and price.
Dogecoin, whose mascot Doge is a Shiba Inu, a Japanese breed of dog, takes the No. 13 spot in the crypto rankings. Dogecoin tends to jockey for position with rival meme coin Shiba Inu, created on its coattails. The Dogecoin price climbed from $0.11 to $0.12 per coin during the short-lived crypto rally but has since retreated. Doge is famous for his two-word phrases using modifiers like much and many: Much Doge, Such Wow, etc.
Crypto can be the tale of two markets, whether in the best of times or worst of times, as the latest regulatory events have reminded investors.
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