FOMO is alive and well in cryptocurrency, with less-known tokens outperforming again after recent rallies held by Ether and Bitcoin industry leaders.
Cardano, now the third-largest cryptocurrency, has seen its value double this month. Binance Coin is also on the rise. Avalanche, a token that tripled in August, has also increased. Prices for digital photos with laser eyes on rocks and cartoons of cute animals are exploding, sometimes even quadrupling, in the meantime.
Analysts and investors aren’t sure what is driving the frenzy. Some believe that speculators are shifting away from the mainstays and into newer, more exciting options, as they do often after large runs. Others see a world that is flooded with cash and at ultra-low rates which eventually pushes investors towards ever-wonkier assets. A few tokens have strong narratives backing them, such as technological advancements at the Cardano or Solana networks.
Yoni Assia is the founder and chief executive at eToro. He said that you can see the excitement in crypto in the industry’s numbers, regardless of whether they are looking at the total volumes and growth of companies.
Assia refers to it as a “generational purchasing moment” and cites an interplay of events including low-interest rates around the world, massive fiscal stimulus efforts, which delivered checks to many people during this pandemic.
A portion of the money was used to purchase cryptocurrencies and other related assets such as stocks of digital miners. According to The Harris Poll for Yahoo Finance, 15% of Americans who received their first two stimulus checks made investments with part or all of that money. About half of these individuals invested in cryptocurrency, according to a survey of over 1,000 adults in the United States.
Inflation has also materialized as economies reopen. This plays into warnings by crypto-faithful about pending hyperinflation. Assia stated that all of this is “leading many people to look at different types of investments”.
A survey conducted by eToro revealed that nearly 25% of the 6,000 respondents own crypto. This number rises to almost 50% for the younger group. The average investor is expected to increase their crypto allocation over the next few months, and that there is a significant interest in altcoins and alternatives to Bitcoin and Ether.
Downloads of crypto trading apps are on the rise Coinbase Global Inc. was ranked 11th in Apple’s iPhone app downloads according to App Annie (a mobile data and analytics provider). It was 23rd in its category for August. The ranks have been climbed by digital exchanges Voyager, Kraken and Crypto.com.