Bitcoin Unleashed; Cryptos Untethered

cryptocurrency oct11 lt

Market supremo Bitcoin (BTC) continues its dream run in search of new 90-day highs and in earnest pursuit of the all-time high of $64,863.10, touched almost six months ago.

The rally in the lead cryptocurrency has also propelled the entire crypto world into a higher orbit. The total market capitalization of all crypto assets including coins, stablecoins and tokens has increased to $2.32 trillion, from $2.11 trillion a week ago, implying a surge, not in the least ephemeral.

Meanwhile, concerns have reemerged on the extent of reserves backing that Tether, the largest stablecoin has and if any of it is in commercial paper exposures to embattled China Evergrande or Chinese property businesses. Tether however dismissed the concerns as a false narrative.

Bitcoin (BTC) is currently trading at $56,501.10 up 2.40 percent in 24 hours and 18.76 percent in 7 days. The annual return on the leading crypto currency is close to 400 percent.

Closest contender Ethereum (ETH) has however shed 0.11 percent in the past 24 hours. It is currently trading at $3,565.15, recording a gain of 7.34 percent in the past week. Despite the current position, ETH has delivered an annual return of around 850 percent.

In contrast, Gold has shed 8.7 percent, Brent Crude has added 103 percent, Dollar Index has strengthened 1.2 percent and Dow Jones Industrial Average has rallied 21 percent in a year's time.

The tussle for supremacy among the various cryptocurrencies continues. Based on market capitalization as per coinmarketcap.com, the top-15 coins at press-time are Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Binance Coin (BNB), XRP (XRP), Solana (SOL), Polkadot (DOT), Dogecoin (DOGE), Terra (LUNA), Avalanche (AVAX), Litecoin (LTC), Bitcoin Cash (BCH), Algorand (ALGO), Polygon (MATIC) and Stellar (XLM).

What the new rankings portend is that Cardano (ADA) has reclaimed third position, pushing Binance Coin (BNB) a notch below. Polygon (MATIC) has improved ranking to 14, from 15 earlier. Stellar (XLM) which recently announced a partnership with MoneyGram returned to the top-15, consigning Internet Computer (ICP) out of the top league.

Down the hierarchy, 68th ranked Secret (SCRT) gaining more than 93 percent, 88th ranked Symbol (XYM) advancing 83 percent and 97th ranked Radicle (RAD) gaining 80 percent continue in our radars for the extraordinary price momentum in the past week.

The world of cyrptocurrencies comprises not just coins but also tokens and stablecoins. Entering the crypto world would be endless confusion without knowing what coins, tokens and stable coins inherently are.

Coins are digital assets that exist on their own blockchain. Coins are generally used in the same way as a real-life coin is - as money. Our analysis in the foregoing paragraphs was exclusively devoted to coins.

Unlike coins, tokens do not have their blockchain. They exist on other blockchains. The majority of tokens are located on Ethereum. While crypto coins are essentially digital versions of money, tokens can stand for assets or deeds. Tokens can be stablecoins, DeFi projects or related to decentralized exchanges.

Stablecoins are those cryptocurrencies whose value is pegged to another stable asset. Stablecoins can be backed by multiple sources like fiat currency example U.S Dollar, precious metals, example Gold and even other cryptocurrencies. In the case of fiat-backed stablecoins, the fiat currency is used to buy the stablecoin.

Proponents of stablecoin vouch for its use in global money transfers and as a stable intermediary destination when prices of other cryptocurrencies experience volatility.

According to the recent report on Regulation, Supervision and Oversight of "Global Stablecoin" Arrangements by Financial Stability Board, "At present, stablecoins are being used primarily as bridge between traditional fiat currencies and other crypto-assets, which in turn are primarily held and traded for speculative purposes."

The top stablecoin tokens by market capitalization currently are Tether (USDT) with a market cap of $68.4 billion, USD Coin (USDC) with $33.2 billion, Binance USD (BUSD) with $13.2 billion, Dai (DAI) with $6.5 billion, and TerraUSD (USDT) with $2.7 billion.

The prices of all the above dollar-backed stable coins are at $1. Stablecoins are considered a form of digital cash rather than a speculative investment or in other words a cryptocurrency sans volatility.

The market capitalization of Tether (USDT) is next only to the 4th ranked coin Binance Coin (BNB). It has recently been dominating headlines over concerns as to whether it holds sufficient liquid assets to back up for the value of the currency it issued.

Top tokens (excluding the stablecoins mentioned above) based on market capitalization are Uniswap (UNI), Chainlink (LINK), Wrapped Bitcoin (WBTC), SHIBA INU (SHIB) and Axie Infinity (AXS).

Crypto world is not just volatile, it is diverse and complex too. Without knowing the difference between a coin or a token or a stablecoin, foraying into the world of cryptocurrencies is fraught with risk. Each is unique insofar as operations, utility and volatility is concerned.

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