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Altcoins met Coronavirus – Some Assets are Beating Bitcoin

Altcoins met Coronavirus

June 23, 2020 | 

1788 Views | 

JOHN K MWANIKI | 

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It’s been some months since the beginning of the spread of the prevalent Coronavirus. With almost all the world economic sectors coming to a standstill, the money markets have a corresponding result. 

Like any other sector, the crypto has been affected by the Coronavirus. Investors are concentrating on Bitcoin more than any other coin. It is only natural given its market share and value. In the meantime, altcoins have also been gaining traction in the same period. 

Altcoins are proving to be the hidden gem awaiting discovery. While Bitcoin had a challenging period at the start of the pandemic, altcoins have had a breeze rising steadily. 

The rise has been so huge, some assets’ growth rate beating Bitcoin. For example, Zcash increased by 40% and Monero by 30% in that period.

Reasons why the assets beat Bitcoin 

a)    Altcoin independence from Bitcoin 

One of the most prevalent pre-corona notions among the crypto traders is that cryptos are safe from the effects of the traditional economy. It was, therefore, a little mishap to see Bitcoin go down with a falling economy. 

The influence of Bitcoin in the crypto market is so big such that a price change in BTC mostly affects the other coins. While it has been impacting the altcoins too, for some period, altcoins fell off. Bitcoin rose so high while altcoins stayed low. 

A decrease by Bitcoin over the Coronavirus would not affect the altcoins which were by then on a growth path. It continued on that path beating Bitcoin in the process. In the meantime, Bitcoin had to first hit the bottoms before stabling. 

b)    The Need for Privacy. 

The other reason for a booming altcoin even when the economy is going down is the urgent need for privacy. The misuse of data by different entities has shown that users need more privacy than ever before. For that, they are looking for altcoins more than any other crypto. 

For example, Ethereum has grown over the past months due to its privacy provisions. Besides, it had announced an Ethereum 2.0 with even more privacy and faster transactions. 

With Bitcoin looking to become part of the mainstream economy, the other coins are looking for ways to become useful. It is only useful coins that can survive the competition for longer. 

c)    Continuing Trend 

While these changes might not have been visible due to Coronavirus, altcoins have been on the rise for some time. Some of the coins have been performing exceptionally well since the beginning of the year. 

Almost all the major altcoins like Stellar, HedgeTrade and Binance have had considerable growth during the period. 

The main reason for sustained growth is the adoption of the currencies. Most developers are using the platforms to make apps without interference. 

Moving Forward

With a growing Altcoin with performance beating those of Bitcoin most of the investors are looking into the future. Even though altcoins seems to have come out unscathed over the Coronavirus, it is quite too early to give it a clean bill of health.

The altcoins will still feel the effects of the virus, most probably in the long term. The first way the virus prevalence will affect the sector is the loss of funding. With most coins depending on hedge funds, the lockdown has cut off the sources. 

The virus has also seen a number of planned meetings cancelled. While such meetings might still happen online, there is a lot lost on creating connections, networking and brainstorming ideas.

Ultimately, the altcoins beating Bitcoin is a temporary market shift. Bitcoin with the huge market share and the ever-expanding acceptance will always bounce back, as the market leader it is.
 

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