Within merely 24 hours, the crypto market has added $12 billion to its valuation, surging to $212 billion.
As the best performing cryptocurrency on the day, XRP, the native cryptocurrency of Ripple, has risen by more than 40 percent overnight. Cardano (ADA) and Stellar (XLM) both recorded solid 13 percent gains against the U.S. dollar as well.
The performances of XRP and ETH, the currency of Ethereum, are often mirrored by small market cap cryptocurrencies and tokens. The abrupt increase in volume and price of both XRP and ETH led major tokens including Decentraland (MANA) and Basic Attention Token (BAT) to increase substantially.
Factors of a Short-Term Rally
This week, at Yahoo Finance’s second annual All Markets Summit, Michael Novogratz, former macro hedge fund manager and founder of crypto asset management firm Galaxy Digital Capital Management, stated the crypto market has hit a “seller fatigue” and has achieved a “classic bottom.”
In late 2017, Novogratz explained that Bitcoin along with the rest of the market experienced a “classic speculative global mania,” which had to be met with a significant correction to support the next rally of the market, as Bitcoin has historically done throughout the past nine years. Novogratz said:
“Bitcoin has held $6,000. Yes, it is off its highs, but it has established itself as a store of value.”
Various technical indicators, including the Williams Percent Range, have demonstrated extreme, oversold conditions for major cryptocurrencies including Bitcoin, Ethereum and Ripple, the three largest cryptocurrencies in the global market, which likely led both Ethereum and Ripple to experience intensified movements on the upside.
Bitcoin, which only fell by about 9 percent since June, recorded a slight 2 percent increase in its price. Meanwhile, Ripple and Ethereum, which saw a 50 percent decline from June to August, experienced a 20 to 40 percent increase in value in the past 48 hours.
Previous rallies of Bitcoin including the 2017 all-time high were achieved without the involvement of large-scale hedge funds and institutional investors. Novogratz stated that there is a lot of institutional money that is waiting on the sidelines to be invested in cryptocurrencies, which is expected to increase the value of cryptocurrencies significantly.
Last month, The New York Times reported that the number of mega rounds in Silicon Valley and the technology sector, which refer to $100 million rounds, has increased so substantially that venture capital firms are considering the alteration of the definition of mega rounds to $200 million funding rounds.
The publication reported that there is so much money being held by venture capital firms and institutions like Softbank that any technology startup with a solid business model and revenue stream can raise hundreds of millions of dollars.
Startups in the tech sector are securing mega rounds not because they need capital but because they can.
Additionally, The New York Times reported:
“The hot funding market is pushing high-growth start-ups to change their plans. Flywire was not going to pursue more investment money until next year. It still had $15 million in the bank from a previous funding round. But the company saw ‘investment heat’ in the payments industry and Mr. Massaro thought more money would help Flywire grow even faster.”
Ultimately, Flywire secured another $75 million in funding.
Similar Trend in Crypto
With billions and billions of dollars controlled by venture capital firms and institutions, Novogratz stated that once the market is ready to handle the demand, money will shift from the tech sector into the crypto market.
As FOMO among institutions occurs, Novogratz emphasized that there will be no limit to the market cap of cryptocurrencies.
At the time of press, XRP is ranked #3 by market cap and the XRP price is up 38.58% over the past 24 hours. XRP has a market capitalization of $17.92 billion with a 24-hour trading volume of $1.59 billion. Learn more ›
XRP7 Dec at 4:10 pm UTC
At the time of press, the global cryptocurrency market is valued at at $212.31 billion with a 24-hour volume of $15.09 billion. Bitcoin dominance is currently at 53.28%. Learn more ›