Almost anyone not currently invested in bitcoin will say that it has reached the metaphorical “moon” at the end of 2017. If we look at its current price from a purely statistical standpoint, the cryptocurrency has indeed grown two whole orders of value since last December. But it seems as if every time a similar argument is made, the digital currency comes roaring back into the arena, almost emphatically trying to prove that it still has some gas left in its tank.
Bull Rally Skepticism
At the time of writing this article on December 12, 2017, bitcoin seems to be rising even higher from its current position at $17,300. Further still, it has achieved a significant amount of that progress in the past month or so alone.
This sort of jump in price is commonly termed a “bull rally” in the financial industry, but even for a bullish run, a sudden growth of this magnitude should set off several alarm bells.
Volatility concerns aside, it might be prudent for the cryptocurrency community to take a few steps back from the current bitcoin mania and ponder over the future of digital currencies.
Bitcoin, since its inception in 2009, has always reigned supreme over all other cryptocurrencies that came after it. In fact, it has almost become standard to value an “altcoin” relative to the current price of bitcoin.
For instance, the current value of ether can be understood as both, $603 and 0.0349 BTC. Most cryptocurrency traders naturally prefer the latter. This shift in perspective may, quite understandably, seem alien to someone new to the market but is indicative of bitcoin’s choke hold over the market.
Maybe in the interim, while bitcoin figures out some of its problems, including long transaction times and high fees, the entire market should shift its attention to another cryptocurrency which doesn’t endure the same negative connotation that bitcoin entails today.
After all, there’s no real shortage of competitors in the digital asset ecosystem. The combined cryptocurrency market capitalization of over $400 billion will readily attest to that fact.
Litecoin’s price pushed over $300 handle, an impressive 3,000 percent increase from last year. Similarly, Ethereum’s price hit an all-time high of $600 in December 2017, even though it only hovered around $10 at the start of February. Ripple (XRP) has the backing of several governments and financial institutions worldwide. With rumors of banks making large XRP purchases running in the wild, it may not be long before Ripple’s digital currency also takes off.
It is important to acknowledge that the most lucrative strategy for bitcoin investors has always been long-term holding though. And while there is a chance that this will continue to work for the foreseeable future, the possibility of bitcoin irrevocably crashing is also just as likely.
Investing in alternative cryptocurrencies at this point is a safe alternative for all parties involved, especially for new investors and bitcoin itself. To begin with, it will at least allow sufficient time for the crypto sector to decide its future.