Cryptocurrency investing is suddenly fun again.
After two years in the doldrums, cryptocurrency prices spiked across the board today (Tuesday).
Many cryptocurrencies were up by double digits, and a few posted huge gains. Bitcoin SV, one of several coins that forked from Bitcoin, was at one point up more than 100%. Another forked coin, Bitcoin Cash, was up 22%.
Other big gainers among CoinMarketCap.com's top 20 included EOS (up 21%), Dash (up 23%), Litecoin (up 16%), and Ethereum (up 14%).
The collective value of all cryptocurrencies (excluding Bitcoin) rose by $11 billion in just 24 hours, from about $69.5 billion to $80.5 billion.
The strong price increases were celebrated on crypto Twitter as the return of "altseason." The first altseason occurred in 2017, when initial coin offerings were all the rage. Back then, newly introduced coins commonly rocketed by thousands of percentage points in a matter of days or even hours. Billions of dollars were invested in such cryptocurrencies then.
But those huge price gains did not hold. Many cryptocurrencies eventually fell 80%, 90%, or more. Some crypto investors who bought them gave up and sold them. But others held on, hopeful altseason would eventually come back.
Of course, one day of strong gains does not an altseason make. Crypto prices could fall again. But today's spike suggests cryptocurrencies aren't as dead in the water as many skeptics had believed.
Which leads us to the question: Why now?
How Cryptocurrency Investing Just Got a New Lease on Life
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Perhaps the simplest explanation for the big crypto rally is that nearly every coin was oversold.
Remember, many of these coins had fallen more than 90%, and unlike Bitcoin, most had recovered little of those losses.
The technical analysts pointed to charts that show many cryptocurrencies have rallied enough to break their long downtrends. This suggests the rally could keep going.
The other factor is the current Bitcoin rally. As the No. 1 cryptocurrency by far, Bitcoin has a powerful sway over the prices of other cryptocurrencies.
Today Bitcoin made a particularly strong move, rising about 8% in 24 hours. That followed two weeks of solid gains, forming the foundation of a New Year's rally. Since Jan. 1, Bitcoin is up about 21%.
Bitcoin has been rising for several reasons. For one thing, we're just five months from the halving of the block reward in May. That will cut the supply of newly mined bitcoins from 12.5 now to 6.25.
Meanwhile, Bitcoin demand is increasing - especially from institutional investors. Not only have hedge funds started buying, but so have pension funds and even university endowment funds. The CEO of Coinbase said last week that hundreds of small, institutional investors had signed up for his company's custodial services - and he expects that trend to accelerate in 2020.
That suggests Bitcoin will continue to rally in 2020 and pull most of the top cryptocurrencies with it.
In fact, the revival in interest of cryptocurrencies opens up some compelling investment opportunities...
These Tiny "Coins" Could Add Up to Exponential Returns
The fact is thousands of cryptocurrencies have been created over the past few years. Most will end up worthless.
But not all - there's a special group called "specific-use coins."
They exist completely outside of Bitcoin... and this sector provided monster returns in 2019.
Gains like...
- 14,227% in eight months - enough to turn $500 into $71,000...
- 15,572% in two months - that would've turned $500 into $77,000...
- And even 23,032% in four months - that could've turned $500 into $115,000.
People have seen massive gains from specific-use coins like these in remarkably short periods of time.
Now you can, too - thanks to our Bitcoin 2020 Masterclass.
All the details are right here...
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About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.