Bitcoin’s grip on crypto eases after climb in smaller tokens like XRP
SPECULATIVE crypto demand is widening beyond Bitcoin’s revival.
Gauges tracking the bottom half and 30 mid-tier tokens in MarketVector’s index of the largest 100 digital assets are up 16 per cent and 14 per cent respectively so far in November – exceeding the wider measure’s 4 per cent gain and a 1 per cent rise in Bitcoin.
As a result, Bitcoin’s share of the US$1.38 trillion crypto market is down to about 49 per cent from a peak of 51.5 per cent in October, CoinGecko data shows. Digital-asset investors often view such a drop as a sign of growing risk appetite.
“This rally is definitely broader and more sustained than any price action we have seen since January,” said Richard Galvin, co-founder at Digital Asset Capital Management. “In an environment that’s still relatively thin in regards to liquidity, we’re seeing some material moves to the upside.”
Bitcoin’s 28 per cent surge last month was the best since January on expectations that the first US spot exchange-traded funds investing directly in the token will soon win approval. A general sense of optimism has spilt beyond the largest digital asset, aided by bets that the Federal Reserve is done with interest-rate hikes.
The crypto rally is also spreading to corners such as decentralised finance, a catchall term for blockchain projects that enable peer-to-peer transactions. Interest rates to borrow stablecoins on major DeFi lender Aave topped 10 per cent, a sign that investors are willing to pay up to fund trading positions.
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XRP ripples
Among smaller tokens, the XRP coin linked to Ripple Labs has been one of the stronger performers in November so far, adding 14 per cent. The token is benefiting from Ripple’s partial legal victory over the Securities & Exchange Commission (SEC) on whether XRP is a security that falls under the agency’s regulatory purview.
A Nov 9 deadline for a briefing schedule on remedies for pending issues in the case sparked speculation about a possible settlement of the SEC lawsuit.
“Though no immediate catalyst for this price surge is apparent, it’s likely that traders are responding to positive developments for Ripple,” ByteTree staff including chief investment officer Charlie Morris wrote in a note.
Bitcoin rebound
Bitcoin has advanced 111 per cent this year following a crypto rout in 2022. The climb has weathered the damage to the sector’s reputation from the conviction of Sam Bankman-Fried for a multibillion-dollar fraud at the FTX exchange, one of a number of digital asset platforms that went bust.
Bitcoin edged below US$35,000 as at 9.53 am in Singapore on Tuesday, while XRP pared some of its recent advance. Bitcoin remains well below its 2021 record of almost US$69,000.
A drift upward in Bitcoin in the past few days has been orderly, which points to “steady new buying” and “a more widespread shift in investor sentiment”, wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter. BLOOMBERG
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