Cryptocurrency update: Polkadot jumps while Bitcoin stalls
A jump in Polkadot’s market cap catapults one of the newest cryptos on the market to a new position of prominence. Meanwhile, after its amazing rally, Bitcoin might be hitting resistance under $40,000.
Polkadot shares leap 100% over last 7 days
At the time of writing the price of Polkadot’s DOT token has accelerated. Now it is the world’s fourth-largest cryptocurrency by market cap, outstripping rival currencies XRP and Litecoin, with total cap now valued at $15bn.
During the period 11-17 January, DOT hit as high as $18.90 from starting the week at $7.80. It is currently consolidating around $17.50.
Polkadot was founded by Gavin Wood, one of the brains behind the Ethereum platform and its cryptocurrency ether. Ether is the second most popular crypto in the world, behind Bitcoin, and also the second most valuable per-coin.
Polkadot itself is a blockchain platform aiming to become the standard platform for all blockchain-related programmes and transactions going forward. DOT is the currency used to process transactions on the Polkadot protocol. In many ways, it has lots of similarity with Ethereum, but Polkadot is fixed firmly on expansion.
According to Gavin Wood, Polkadot is already the second most used token in the decentralised finance infrastructure.
Altcoins, i.e. those cryptos that aren’t Bitcoin, have been gaining traction in the wake of Bitcoin’s recent massive gains. It’s a general rule of thumb that if Bitcoin is trading high, then other cryptos will too. But as we’ll discuss, this might not always be the case.
Bitcoin uncertainty could signal crash
Bitcoin has been roaring in recent weeks, hitting above $40,000 for the first time ever – but its also taking a bit of a beating too. It fell $10,000 to the $30,000-mark last week. Subsequent recovery climbed back to the $35-36,000 level. Bitcoin futures are trading at above $36,500 at the time of writing.
Does this mean another crash is on the way? It’s difficult to pinpoint. Whales continued their accumulation during last week’s drop, with the number of whales, i.e. crypto wallet clusters owned by a single network participant holding at least 1,000 Bitcoin, reached 2,140 last Monday. That’s an all-time high, and an indication of confidence in an ongoing Bitcoin bull market.
According to JPMorgan analysts, the speed at which a new high happens, if it does happen, is all down to institutional inflows. Several organisations are backing Bitcoin and other cryptos and flashing the cash on big digital asset purchases.
Greyscale is experiencing extremely high interest in its crypto investment offerings – so demand might be enough to keep bullish sentiment high amongst investors.
Greyscale reports largest daily crypto asset raise in history
Greyscale, the largest cryptocurrency asset manager in the world, announced on January 15th it had attracted $700m toward its investment products – the single largest one-day investment rise in crypto history.
As of Q4 2020, Greyscale had accrued $3.3bn in cryptocurrency investment products. Its weekly average, says CEO Michael Sonnesheim, prior to the intense demand caused by the recent Bitcoin rally, was about $250m.
Its total assets have now jumped above $27bn. Greyscale continues to accumulate cyrptos. In 2021 so far, bearing in mind the year is still only three weeks old, 10,000 Bitcoin, alongside 9,000 Litecoin and 1,000 Bitcoin Cash.
To show the speed at which crypto investors like Greyscale are accumulating wealth, and the rate at which cryptocurrencies have climbed in the past year, we can look at its asset value growth from 2020. Greyscale started that year with $2bn in cryptocurrency assets under management. It ended 2020 with AUM worth $20bn.