Why Altcoins Like BNB and Internet Computers Soared This Week

It’s risky to believe that any rally will continue indefinitely, but investors certainly got that impression about cryptocurrencies this week. With so many double-digit percentage increases, it was as if anyone could point to a name blindfolded and get their hands on a rapidly appreciating asset.

Plenty of altcoins would have done that. For example, according to data compiled by S&P Global Market Intelligence: BNB (BNB 0.56%) Although it recorded a weekly profit of 10%, girl name (HBAR -3.63%) It outpaced this with an 11% rise. So as not to fall behind, VeChain (veterinarian 2.32%) Almost 20% larger internet computer (ICP -9.14%) Defies gravity at nearly a 30% clip.

There are no obstacles to this meeting

The rallies continue to thunder as there is nothing to stop them. Much of this is related to macroeconomic factors, primarily the prospects for declining inflation and lower interest rates.

Inflation appears to be cooling globally. On Wednesday, the Office for National Statistics said in its latest data that Britain’s inflation gauge, consumer price inflation, rose 3.9% on an annualized basis in November. This may sound fat to US inflation hawks, but it is actually a significant decline compared to the previous month’s 4.6% increase.

Meanwhile, Fed officials are now publicly discussing ‘how much’ and ‘when’ the regulator will cut interest rates. This discussion would have been almost unthinkable six months ago, when inflation was much more stubborn than it is today.

All of this plays beautifully into the hands of risk-taking investors. Yes, many altcoins have practical uses. For example, Internet computers can unite data centers to connect, disseminate, and share information without a central system. However, few have proven to be the foundation for blockchain systems that can generate strong and consistent returns.

An easier way to invest in cryptocurrency

The growing appetite for risk is reflected in the outperformance of many volatile stocks. Some cryptocurrencies, such as the more recent ones, have advanced to a much higher level than their “safer” and more stable peers. On the whole, the market as a whole is more willing to speculate on more volatile assets these days.

Another element worth mentioning has not yet been fleshed out. This is regulatory approval for a spot cryptocurrency exchange-traded fund (ETF). This allows investors to invest their money directly into the coins and tokens of their choice in one go, rather than going through the multiple steps of purchasing cryptocurrency directly.

Spot cryptocurrency ETFs equate to ultra-low inflation figures in that they are still in the “hope and wish” phase. However, many altcoin investors believe that both will soon become a reality.