It’s been very encouraging to watch the crypto rally this week.
Bitcoin has led the way over the past week, rising 20% from the beginning of the week to Friday. Most altcoins are up anywhere from 5% to 15% over the same time period.
I continue to be most bullish on bitcoin based on the current environment.
I’m still watching inflation closely. Newly released numbers show U.S. inflation rose 6.1% in the second quarter compared to the same period last year. That’s the highest level since the 1980s. Check out my Early Investing article for more analysis on why inflation and low rates could drive gold and bitcoin higher.
It wouldn’t surprise me to see certain altcoins outperform bitcoin over the short term. I’m watching ethereum quite closely these days, as it’s scheduled to implement EIP-1559 on August 4 — an update that will reduce supply inflation and lower miner revenue. The upgrade has been called a “deflationary” change, but I think that’s a bit of an exaggeration. It will be fascinating to see how this affects prices. There’s a chance ethereum could go on a crazy run.
Of course, if the EIP-1559 rollout doesn’t go smoothly or is interpreted badly, ethereum could struggle. However, the Ethereum network is experiencing an incredible amount of adoption overall, so I’m cautiously optimistic and holding, as usual.
That said, I believe that bitcoin will outperform the overall altcoin market substantially over the next year and more. Especially if the market begins to realize that inflation is not as transitory as experts claim.
Have a great weekend, everyone!