Why Cryptocurrency Altcoins Jump into Trading This Weekend

Cryptocurrency markets continued their hot streak late Friday into Saturday, this time led by altcoins focused on speed and utility for adoption. bitcoin and Ethereum Although it has received a lot of attention recently, many altcoins have become more valuable.

Saturday noon, Algorand (what 11.87%) It is up 10.3% in the last 24 hours. fantasy (FTM 9.94%) It rose 11.5%, avalanche (Avex 7.95%) It rose 13.4%, polka dot (dot 7.42%) It rose 6.8%. As usual, there was a lot of volatility, but the movement appears to be holding up as volume slows over the weekend.

Cryptocurrency rebound continues

Altcoins are leading the cryptocurrency market recovery, with various tokens surging over the past few months. There are more optimistic outlooks for the market related to falling interest rates, the rise of cryptocurrency-related growth stocks, and the steady march toward regulatory clarity.

On the development side, Deloitte announced that it is working on the KILT protocol on the Polkadot blockchain to build a “Know Your Customer” and “Know Your Freight” system for the shipping industry. This allows customers to identify and verify the products they have delivered.

Developments like this are increasingly happening on layer 2 blockchains (built on top of layer 1, like Ethereum) or blockchains built specifically for speed and efficiency. That’s what we need all four of these tokens for.

A broad tailwind for cryptocurrencies is an improving regulatory environment. In the United States, the Securities and Exchange Commission (SEC) continues to lose court cases and Congress appears unable to pass legislation to ban or legalize cryptocurrencies. Countries like Singapore, Venezuela, and the United Kingdom have new or pending laws that would allow more cryptocurrencies to be used as payment methods. This will also help develop blockchain applications in these locations.

Risk is now being rewarded in cryptocurrency

Cryptocurrencies are a very high-risk asset class, and for now, that risk is paying off. The flow of money into the industry has pushed its valuation higher since many investors left the industry altogether in 2022.

Although I am optimistic about the future of blockchain, I think the rise of these tokens will ultimately have bad results for investors. If the blockchain has no utility or is not used in the token itself, its value is only in the transactional asset. And we saw that these tokens could eventually fall during the cryptocurrency winter.

Investors should look at where the most activity is taking place and what type of activity is taking place. For example, the shipping development mentioned above doesn’t actually use Polkadot tokens, so using the blockchain doesn’t add much value to the tokens. The same goes for stablecoins, which can be used to pay for transaction costs but do not necessarily contribute to the value of the underlying token.

It’s great to own altcoins and see them rise in value, but remember the risks associated with the industry and how the market can turn south.