The Party Don’t Start Till-Alts Walk In
If all you know and track in the crypto space is bitcoin then I feel for your soul. Being in only bitcoin is like being only in gold, sure it moves with inflation and bets against the current financial system but that’s where it stops. There’s not much innovation that’s possible using only bitcoin. Hence, altcoins. Alternative networks like Ethereum, Pokadot, EOS and Tezos are turning computational networks that allow developers to innovate in the space, providing numerous real-world applications.
On this day (November 23rd), bitcoin took a break from leading the pack and it was altcoins’ time to shine, and shine they did. Bitcoin’s range stayed within $18k-$18.7k, which is quite wide but altcoins completely left behind their moving averages without a care in the world. Most altcoins are in the double digit percentage gains.
The biggest winners has to be micropayment and global payment networks like XRP (+31%) and Stellar (+48%). Many crypto investors criticize these types of networks due to their centralized nature and its dependence on a company’s governance. For example, XRP was created by the company Ripple, which aims to help banks transact through borders. Now, the application is sound but limited. It’s limited by development and incentives. Besides, assets like XRP and XLM (Stellar) are not meant to increase in price since their purpose wasn’t to store value.
Another reason for XRP’s uptick is the exploration for “cheaper” cryptos to new comers in the space. That $0.35 price tag must have been very attractive to the people that think all crypto work the same. On-chain data tells us that the addresses interacting with XRP spiked in late November and then intensified when it rose 27% in one day on November 22nd.
As mentioned before, XRP is run by Ripple and they have the ability to buyback their tokens from the free market whenever they like. No SEC. no regulatory body, no nothing. That’s not the point, the point is that during the 3rd quarter of 2020, Ripple bought $45.5 million worth of XRP in a repurchasing program. Whether it’s stocks, commodities, or crypto, a buyback can cause the buyer demand for an asset to increase. Although $45.5 mil might not be enough to significantly impact the value of XRP, it could have buoyed the market sentiment around it.