Unless you have been living under a rock, it would be pretty hard to miss the meteoric rise of Bitcoin over the course of 2021. Few could have predicted it but many have done their best, such as tweets from entrepreneur Elon Musk, to push the price of Bitcoin even further.
At the time of writing, Bitcoin has soared 70% this year, following social media pushes, a monolithic $1.5 billion purchase by Tesla, and the emergence of a wall street adoption. But there are over 6,000 cryptocurrencies on the market. What about the other cryptos?
Riding the Coattails – Rising Altcoin Prices
While everyone has been talking about Bitcoin, several prominent altcoins have seen even greater gains than that of the world’s number one cryptocurrency. Ethereum, Binance coin, and even the meme-based, Dogecoin have recorded triple-digit gains since the start of 2021.
Bitcoin’s dominance over the cryptocurrency market has actually fallen significantly this year – Bitcoin’s value compared to the remaining cryptocurrency market has fallen a massive 60 – 70% in 2021. Some pundits think joke crypto, Dogecoin, may even break the $1 mark this year. That’ll be an additional increase of over 500%.
Ethereum, decentralised finance (DeFi) pioneers and the second-largest cryptocurrency, reached a total value of about £220 Billion this month. That’s a gain of about 150% since January and more than 500% over the previous year. Ethereum blockchain tech rivals, Polkadot and Cardano, have seen gains of 255% and 420%, respectively, since the start of the year.
Cryptocurrency exchange token, Binance coin, has moved over 350% since January and seems to be continuing to rise. It certainly appears like traders don’t want to miss out on the current crypto trend that has dominated the year thus far.
DeFi has led to an increase in the use of decentralised apps that are revolutionising business transactions such as smart contract programs, power ledgers and blockchain technologies allowing organisations to operate entirely remotely. Interest in DeFi has certainly increased and has been further fuelling the surge in some cryptocurrencies.
A Long Year Ahead
The greater cryptocurrency market, which is made up of literally thousands of digital tokens, is worth over $1.5 trillion. Bitcoin, despite massive gains, is losing its market share as smaller altcoins see tremendous growth also. Perhaps the increase in crypto interest is fuelled by a renewed confidence and understanding of cryptocurrency and blockchain technology.
This potential bull run could also push a bull run in decentralised innovation through a rejuvenated interest in decentralised technologies. The rise of DeFi altcoins could see increased adoption of blockchain technology in business supply chains and possibly a greater demand for decentralised infrastructure. It is a long year ahead and only time will tell if cryptocurrencies will maintain its current spectacular growth.