Record Highs for 20 Digital Currencies; Market Cap Near $600 Billion
According to market data from OnChainFX, each of the top 20 digital currencies reached peak highs in the past week. The top 20 is decided by market capitalization, with Bitcoin (BTC) in prime position, followed by Ethereum (ETH).
The highs began with Bitcoin reaching over $19,000 USD on December 15th, 2017, though the value quickly fell back to just over $15,000 by the end of this week.
The value of bitcoin, combined with substantial prices rises in other digital currencies including Ethereum (ETH) and Litecoin (LTC) have resulted in the collective value of the digital currency market place hitting $600 billion for the first time.
Both Ethereum and Litecoin have seen 4,000 per cent price rises across 2017.
Bitcoin Cash (BCH) rose to $4,000 following its final acceptance for listing by Coinbase, who had initially steered away from the currency created by the hard fork of Bitcoin in August 2017.
Rise and fall
Despite the record highs of this week, the value of Bitcoin and other digital currencies has subsequently fallen. It’s clear that although altcoins have their own specific influences, Bitcoin influences all of them. The total market capitalization as of December 21st, 2017 is back to $596 billion.
The trading of bitcoin futures on Wall Street by CMOE Group and now CME Group this week is also influencing price confidence. Some initially hesitant investors interpret the move to mean increased acceptance, incentivizing them to purchase.
Many other investors, though, bet on wild increases in digital currencies’ values for speculative profits. They may see the move to Wall Street as a stabilizing indicator, reducing the chances of significant fast gains.
Bitcoin’s fall in price could be an issue of confidence in the technology behind it. For instance, recent reports indicate that exchanges struggle to process the transaction volume. The blockchain network behind bitcoin, which records each transaction, is notoriously un-scalable. The vast ledger and slow processes are one of the key points that competitor currency Ethereum hopes to tackle.
What’s next for digital currencies
Bitcoin processing and the mining which validates each transaction also consumes a massive amount of power.
The price volatility of Bitcoin has also worked against its relationship with retailers over the last few weeks as online games giant Steam stopped accepting the coin as payment.
Retailers like Steam struggle to manage the changes in value of digital currencies which can significantly devalue their products or cash accounts.
With bitcoin price wildly fluctuating, the potential losses for Steam, and the high transaction fees, were obviously too much.
Steam also passes on the fluctuations to purchasers of their goods, who will need to make additional payments to cover bitcoin prices falls. These customers then paid extra transaction fees. Steam plans to review the decision when and if Bitcoin price stabilizes.
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