Bitcoin is so close to making a new record and it could be because it’s taking market share from its smaller cousins.
The largest cryptocurrency crossed $4 500 on Monday and is now hovering right below the $5 000 line. Behind the rally could be reports saying the Chinese government will ease recent regulations and that Goldman Sachs is exploring how it could help clients trade cryptocurrencies. Also, there’s yet another split — a.k.a “hard fork” (or even two) — looming, but that might be bullish as bitcoin rallied after the split into Bitcoin Cash earlier this year.
But it could also be that bitcoin is benefiting as investors are becoming wary of tokens sold in initial coin offerings — maybe the Wu-Tang Coin, or Paris Hilton and Floyd Mayweather publicising their ICO investments on social media was a bit much, and somebody losing $70 000 in one of those sales today adds to many other cautionary stories.
“There has been a rotation of money out of the lower-quality names and into bitcoin,” Ronnie Moas of Standpoint Research said in a message.
Bitcoin’s market capitalisation as a percentage of all cryptocurrencies’ market cap of $155 billion has climbed to 52%, from a low of 38% in June, according to CoinMarketCap.
© 2017 Bloomberg