Discover more from DEFI TIMES Newsletter
SUNDAY THOUGHTS - Why Altcoins will pump very soon!
Ding-Dong „Dear ladies and gentlemen welcome on board of this Altcoin380! I am your captain Vitalik Buterin and next to me is my Co-Pilot Dr. Gavin Wood! We will now demonstrate the safety features on this spacecraft, and your attention is essential as these may differ from any spacecraft that you have flown on before: First of all, please fasten your seat belt as we are taking off in twenty minutes. Also, please put your hardwallet under your seat. In case of massive price dumps, stay calm, as oxygen will be provided. Mask will appear automatically. Stay in your seat and pull your mask towards you. Place the mask over your mouth and nose and breath normally. Please do make sure your own mask is fitted before helping hysteric newcomers. Our flight will probably take around thirteen months as we will land on the moon by the end of 2021. In case of good sight, you will be able to see the old Bitcoin All-Time-High just after the take-off. We kindly ask you to tell our lovely flight attendants what you wish to eat for dinner as we offer Pizza and Avocado Toast. Also, we offer black coffee without milk and sugar. We also offer water to drink, so ensure to
stay hydrated as this flight is a very special one!
Now ensure that your seat is upright and in the take-off position, with armrests down. Also, do make sure that your table is folded away.
We wish you a pleasant flight!”
Okay, jokes aside! However, there are many reasons why we are getting bullish again. Although Bitcoin was pumping like crazy, we still have to wait for the big altcoin pump. Today, I want to show you why I think that altcoins will follow very soon. In this sense. Welcome to another episode of SUNDAY THOUGHTS!
Level up your DeFi knowledge and subscribe to our newsletter!
Obviously, the space is much more diverse than last summer! There are many new projects and protocols which have evolved dramatically. One of the most prominent critics against DeFi was that there were not many protocols beside of Ethereum protocols. Polkadot, KAVA and DFI were huge exceptions. Therefore, many people argued that the space is not diverse enough and that the success of DeFi is coupled with the success of Ethereum. Maybe this was one of the reasons why the small DeFi bubble bursted in September 2020. Anyway, these times seem to be over, as some new projects and protocols have evolved enormously since September. Especially the Polkadot ecosystem is more prosperous than ever before. Parachains and cross-chain-bridges such as MantraDAO, Darwinia, RioChain, and Polkastarter are very promising. Because they were built on Polkadot (or Darwinia on Substrate), they do not have to deal with the everyday problems of Ethereum protocols, such as high transaction fees.
In general, Polkadot’s popularity has risen remarkably, as Polkadot is now one of the biggest and most essential blockchains in the space. One of their main goals is to improve interoperability in the DeFi sector. Today’s blockchains often deal with missing interoperability, which is a big problem when it is about transferring cryptocurrencies across different blockchains. In general, the interaction of different blockchains is essential for the whole space, as it otherwise holds up development.
Besides Polkadot, xDai became more relevant, a blockchain known for its fast transactions with low fees. Honeyswap, a fork of Uniswap, was built on xDai, a great alternative to Uniswap.
In general, many protocols try to solve the problems of last summer. So, there are many new projects and protocols with excellent interoperability and scalability. Now imagine what could happen if Ethereum improves dramatically in the next year by slowly upgrading to ETH 2.0 and connecting itself with the rest of the space.
The wait is finally over! We have the certainty that ETH 2.0 will go live by December 1st, 2020. A historic event for the entire sector.
ETH 2.0 will make Ethereum not only more scalable in the long run but also more interoperable.
This is not only good for Ethereum but for all protocols built on Ethereum, which represent the largest part of the DeFi sector. Some have discussed that Ethereum could become bigger than Bitcoin - a legitimate discussion in my point of view.
Ethereum is a fundamental part of the entire crypto industry. Now, the blockchain has taken a decisive step into the future. But what does this mean for me as an Ethereum-Investor? Of course, the following thesis must always be treated with a certain amount of caution. Ethereum has followed Bitcoin’s price increase a little bit, however Bitcoin is closer to its all-time high than Ethereum. Nevertheless, also Ethereum is on a good way reaching all-time high by December. Let us suppose that Ethereum reaches this milestone by the end of December, which is quite realistic. In that case, also thousands of Ethereum protocols would probably follow. This is the reason why we at DEFI TIMES believe, that there will be an even bigger DeFi bubble than in August.
It is quite clear that Bitcoin has initiated the start of rising prices. Bitcoin is the oldest cryptocurrency in the world, and by most seen as digital gold. To outsiders, Bitcoin’s development may seem volatile in general, which is correct somewhere. Still, this volatility is in no way comparable to the volatility of DeFi protocols or various altcoins. However, prices are increasing because institutional investors start to see what many people have always seen in Bitcoin: The perfect Store of Value! MicroStrategy f.e. has invested a portion of its assets in Bitcoin. Furthermore, PayPal offers Bitcoin for purchase on its platform. In short: Bitcoin is establishing itself in society.
Altcoin prices were free-falling since September; however, Bitcoin started to lead the entire sector out of the valley of dumping prices. That is the reason why we at DEFI TIMES are incredibly bullish. In August, the situation was completely different! Altcoins and Ethereum caused prices to rise while Bitcoin has more or less moved along. But at the end of the summer, the bubble burst.
This could have to do with Bitcoin. Because, as already mentioned, even broader sections of society are investing money in Bitcoin! In case of rising prices, and thereupon the hype of the large and well-known media returns, more institutions and private people dare to go into the “Altcoin Forrest” If the Bitcoin prices do not rise, the altcoin’s growth is somewhere limited - the bubble could burst again.
However, how will Bitcoin perform until the end of the year? None of us has a crystal ball, but we at DEFI TIMES are very bullish due to one crucial fact. After the last US election in 2016, the Bitcoin price increased by about 47%! In general, 2016 was similar to 2020 in terms of Bitcoin price development. At the beginning of 2016, prices were relatively low. Then they rose rapidly; however, prices fell just before the US-election, only to increase again explosively until the end of 2016. This model could be transferred almost 1:1 to 2020. Nevertheless, in the case of Bitcoin, prices increase again by 47%, the old all-time high would be easily achieved by the end of the year.
This could be a catalyzer which brings altcoin prices to skyrocket.
However, this time even more intense!
Well, 2020 was very turbulent so far, and I do not think that the last weeks will be different! Moreover, I am optimistic, which is why I believe that altcoins will follow Bitcoin’s price increase. Nevertheless, this is also a problem as dumping Bitcoin prices could impact altcoin prices enormously. So, risk management is more important than ever before!
Let us see what prices do in the next months. However, you also have to note that central banks are printing money like crazy at the moment. In addition to that, the global situation is, due to the Corona pandemic, still fragile, which could end up in dramatic events in the next month. So always take care!
All information presented above is meant for informational purposes only and should not be treated as financial, legal, or tax advice. This article's content solely reflects the opinion of the writer, who is not a financial advisor.
Do your own research before you purchase cryptocurrencies. Any cryptocurrency can go down in value. Holding cryptocurrencies is risky.