Bitcoin’s (BTC) extraordinary 113% rise since July has brought it to new all-time highs, and within firing distance of the R1 million mark.
A few years ago, it seemed absurd to suggest Bitcoin would one day trade at R1 million, but now the talk is of the next target – R2 million and even higher.
Bitcoin is now worth nearly $1.2 trillion, making it the eighth most valuable asset in the world, placing it just ahead of ninth-placed Tesla ($1.07 trillion) and just behind Silver ($1.36 trillion).
Apple remains the world’s largest company ($2.45 trillion market cap), and gold remains the top precious metal ($11.39 trillion market cap), which means Bitcoin would have to more than double to dethrone Amazon and 10x to catch gold.
Ethereum (ETH) now has a nearly $500 million market cap which puts it 17th in the market cap rankings, just ahead of Alibaba ($482 billion) and just behind JPMorgan Chase ($505 billion). That in itself is an extraordinary story, given that ETH has been around just six years, and JPMorgan Chase traces its origins back more than 200 years to the Bank of Manhattan Company.
“The rate at which cryptos are disrupting the financial space is staggering,” says Brett Hope Robertson, investment analyst at crypto investment company Revix. “We are witnessing history in the making. The wealth that has been generated around cryptos has been unlike anything we have seen in recent times.”
Ironically, Apple stock was first publicly traded in 1980 at $22 a share, and in the early years, experienced the same kind of volatility normally associated with Bitcoin and other cryptos.
Where Bitcoin leads, altcoins follow
Bitcoin normally leads the charge in bull cycle runs and has done so again since September this year, but other altcoins (cryptocurrencies other than Bitcoin) have more recently started firing.
Since September, Bitcoin has amassed a +32% return, leaving most of the altcoins in its wake. During the same time, Ethereum (+21%), Chainlink (+18%), Binance coin (+4%), Uniswap (-6%), and Cardano (-22%) have all failed to outperform the old guard.
Much of the recent price rise in Bitcoin comes from the US Securities Exchange Commission approval of a futures-based Bitcoin exchange-traded fund (ETF), with a least nine more expected to be given approval before the end of this year.
In a previous article, Hope Robertson explained the traditional flow of funds in the crypto cycle: Bitcoin typically leads the bull run, but when it starts to slow down, investors switch to ETH and other large-cap altcoins, resulting in the so-called altcoin wave. “This is primarily driven by the fact that many have made profits on Bitcoin and now look to deploy these profits elsewhere.”
So, where do they put these funds?
“Well, they move further along the risk curve to large cap altcoins, such as ETH. This leads us into a period called ‘alt season’ where altcoins start to outpace Bitcoin for a period, which can last several months before they too start to slow down, and we see a move back into Bitcoin.”
Where do we stand in the current crypto cycle with regard to the flow of funds?
Brett Hope Robertson (BHR): Bitcoin is still seen as the gateway for new entrants to the crypto space, and as the adoption rate rises, so too does the Bitcoin price. Some analysts believe we are still in the early stages of a long-term bull trend for Bitcoin, but like any bull market, there will be pullbacks along the way. We have seen this play out many times before, and when Bitcoin runs out of steam, the baton inevitably gets passed to altcoins. Interestingly enough, over the last five days, we are starting to see this transfer of money from Bitcoin to altcoins occur as all of the above cryptocurrencies have since outperformed Bitcoin.
How can this information be used to assist investors?
BHR: Understanding this flow of funds into Bitcoin and other altcoins can be used to dollar-cost average more effectively. By knowing when money flows are making some cryptocurrencies cheap and making others more expensive helps you decide which cryptocurrencies to dollar-cost average into. Attempting to time the tops and bottoms of the crypto market – as with any market – is something only very seasoned traders do with any degree of success.
Are altcoins showing greater strength than Bitcoin?
BHR: Yes, as I stated above – over the last five days, several altcoins such as Chainlink (+11%), Solana (+8%), Uniswap (+5%), Binance coin (+2%) and Ethereum (+2%) have all outperformed Bitcoin (-0.6%).
But it is difficult to guess which cryptos are going to be the outperformers. With this knowledge of money flows, we know which subsector – namely large-cap altcoins – will start to outperform Bitcoin.
This is why Revix is offering zero buying fees on Solana, Cardano, Uniswap, Polkadot and Binance coin from November 5 to November 11.
Remember that with Revix, you can always refer a friend and be rewarded for it. If you refer one or multiple persons using your referral code, you will receive Revix rewards to the value of R300 per referral.
Revix brings simplicity, trust and great customer service to investing. Their easy-to-use online platform enables anyone to securely own the world’s top investments in just a few clicks.
Revix guides new clients through the sign-up process to their first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time.
For more information, please visit www.revix.com
This article is intended for informational purposes only. The views expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
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