The cryptocurrency market has started 2020 with a huge bang, expanding by an impressive 23% within the first two weeks of the year. The overall market capitalization of the cryptocurrency market – a measure of the size of the market – has grown from $192 billion at the start of the year, to well over $240 billion by the middle of January.
Leading the pack is Bitcoin (BTC), which constitutes more than 65% of the overall market size. Going from just under $7,200 at the end of 2019 to a high of $8,800, Bitcoin recorded double-digit gains within two weeks. January 14 saw a spike of more than 11% in Bitcoin’s price, fuelling speculation that the two-year-long cryptocurrency recession could finally be over.
Among the many factors that contributed to Bitcoin’s price increase was the geopolitical upheaval emanating from increasing tensions between the USA and Iran, which led to a flight of safety capital by investors, to safe-haven assets such as gold. Already established as a manifestation of digital gold, it seems hardly coincidental that the prices of both gold and Bitcoin went up.
Another catalyst for the increase was the official launch of the CME Bitcoin options on January 13. The CME group represents the biggest derivatives marketplace in the financial sector. The trading volume of the CME Bitcoin options surpassed that of Bakkt exchange — its direct competitor — within a single day, underlining the status of CME as well as the increasing demands for a wider range of Bitcoin products for traditional investors.
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Ethereum (ETH), the second-largest cryptocurrency, saw a breakout from a consolidation range of $145 to a high of $170, amounting to a relatively modest 18% increase. This was substantiated by strong trading volume that guided ETH’s price spike through a key resistance line that has been hindering its price growth.
Ethereum’s fundamental prospects look positive, particularly given the latest statistics by DeFi Pulse. These indicate that $667M worth of digital asset value — consisting of more than $450M worth of ETH — is locked in decentralized finance (DeFi) applications, which is an increase of 2.5% over last year at the same time. DeFi applications are mostly built on the Ethereum blockchain. An increase of ETH locked in decentralized applications would result in lower circulating supply, and result in notable scarcity.
Another fundamental metric for ETH is the growing quantity of users that it has represented through the number of unique Ethereum addresses. There are now more than 84 million unique ETH addresses, an upsurge from 50 million in 2019. Additionally, last month Ethereum also managed to successfully implement its latest hard fork — known as Istanbul.
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EOS performed relatively well in the recent bull market, clocking a rally of over 22% in the last couple of days. It rose from a low of $3.1 to a high of nearly $4, breaking through major resistance levels to briefly touch $4 for the first time since September 2019.
Much like Ethereum, EOS is also big on DeFi. Nearly 7% of EOS coins are locked in various DeFi applications, more than ETH’s 3%, indicating a strong use case.
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One of the best performers in the market was the privacy coin, DASH, currently the 12th largest cryptocurrency. DASH jumped from $86 to a high of $127, notching a stupendous 47% gain over two days.
This significant increase may be substantiated by the fact that Dash is the preferred cryptocurrency of the citizens of Venezuela. Its increased popularity in Venezuela is not surprising given the hyperinflation that the country faces, compounded by ineffective economic policies, corruption, and sanctions. Given that a privacy-focused cryptocurrency can effectively mask users’ activity, it was natural that Dash became a top candidate. Since January 4, 2020, Dash has seen an exponential rise in value, at one point going from $45 to a high of $120 over a matter of hours. That is an astounding 150% increase within a week. Furthermore, recent reports have announced that Burger King is considering accepting Dash in its outlets.
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The cryptocurrency market is experiencing a steep rally across the board, with many convinced that this may be the end of a two-year bear market. Various developments in cryptocurrency adoption and technology further substantiate the use cases of blockchain. The increase in trading volume and the breaking of prior price resistance could signal a resurgence in the markets.
The post Cryptocurrency Prices Rally Towards Double-Digit Gains in 2020 appeared first on Global Coin Report.
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