A very cool thing is happening as of late. While bitcoin makes another attempt at $20,000 – a figure it hasn’t seen in nearly three years – the currency’s positive vibes are rubbing off on other coins, such as Ethereum, Litecoin, Chainlink and Ripple’s XRP, all of which are up significantly up at press time.
When BTC Does Well, Assets Like Ethereum Do Well
Many people tend to speculate on how well assets correlate with each other. The truth is that in the world of crypto, all smaller cryptocurrencies, i.e. Ethereum, Litecoin, etc., tend to follow bitcoin. If the asset goes up, others follow suit, and if it goes down, altcoins soon find themselves sinking into perdition. It’s just the way things work, so if you’ve invested in altcoins, your best bet is to hope that bitcoin does well because most of the time, those coins won’t rise on their own.
Well, traders are in luck because as it so happens, bitcoin is doing very well at the time of writing. Despite a recent $300 drop from the price, the world’s number one cryptocurrency by market cap is still trading for well over $15,000, and analysts don’t think this bull run is going to end anytime soon. In fact, some are rather confident that the currency could experience its all-time high of $20K all over again.
Alex Kuptsikevich – a senior financial analyst with FX Pro – explained in a recent interview:
It was important for bitcoin to overcome the resistance area near $12,000. Once it was passed, the coin did not have any significant hurdles to jump to repeat the rally towards $20,000. All obstacles were crushed, and now any news background is perceived as positive for the leading cryptocurrency.
One of the biggest things contributing to the high numbers seen in crypto as of late is the present status of fiat currencies like the US dollar. As it stands, USD is having a bit of trouble with inflation, and has been dipping lower ever since the coronavirus first started bashing against our global, financial markets.
While some analysts are arguing that the best thing to do right now is leave the dollar alone and not print any more units to give it time to recover, this isn’t the path the US government is taking. In fact, the country is still printing USD at an extremely fast rate, going so far as to produce $1,200 in stimulus money for all Americans making less than $75,000 per year in late March.
Many figures in the financial industry felt this was a mistake, but the fact is that problems associated with the dollar appear to be pushing bitcoin into stronger territory.
Is the Dollar Failing?
John Kramer – trader at market-maker GSR – has stated:
We may not know what a post-election stimulus may look like, but investors continue to believe that the U.S. Federal Reserve will keep printing money at a pace that favors bitcoin’s finite supply.