It appears that the crypto correction is over for now, but I’m glad it happened. We did need to slow down a bit after bitcoin shot practically straight up from $20k to $40k, and altcoins soared. Those kinds of moves are unsustainable in the short term. So it’s actually quite good that the market cooled off and collected itself.
The fundamental factors driving bitcoin higher aren’t going away anytime soon — low interest rates, increased money printing and a glut of debt. I think bitcoin’s price reaching $100k is certainly possible this year. And I believe bitcoin is what’s driving altcoins higher, so they should continue to run as well.
However, this “all boats rising” phenomenon could change if we get a big stock market correction soon. If that happens, I continue to think bitcoin will dramatically outperform altcoins. It could even rise in such an environment.
But I don’t think altcoins will react the same way to a major stock correction. Alts are much more speculative at this point. And because of that, I think they’ll likely sell-off hard in a panicked market. I don’t expect this to happen anytime soon. But it’s always good to consider the mostly likely possibilities.
Of course, if you have a high risk tolerance, altcoins certainly remain attractive. Momentum is strong and rising. XHV, NANO and DCR are all continuing to do well. Those are my favorite altcoin plays at the moment.
Ethereum has been a rocketship over recent months (which Vin called brilliantly). But I do think the price is getting ahead of the actual network progress. The market cap of ETH is now at $185 billion — which is quite impressive. But it also implies very high expectations.
Overall, the crypto market is humming along. We’ve had great news about Visa launching an API to allow bank customers to easily purchase BTC. And I expect we’ll continue to see new institutional investors move into BTC, with some big names likely to be announced soon.