Bitcoin is Poised to Recover Despite Lagging Behind Other Digital Currencies

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Bitcoin is Poised to Recover Despite Lagging Behind Other Digital Currencies

While Ripple and Ethereum have enjoyed a mini rally in the cryptocurrency markets during September, Bitcoin seems to have found levels of resistance and support around $6,800, but this does not preclude an eventual return to the $10,000 mark in 2018. Heading into the final week of the month, billionaire investor Mike Novogratz, the highly respected former manager of the Fortress fund, believes that Bitcoin is finding the stability it needs to reach $10,000 in a gradual fashion.

Markets Favor Various Cryptocurrencies

Alternative crypto coins such as Stellar recently posted gains as high as 20 percent, but this type of price activity is not conducive to attracting institutional investors, which is what Novogratz would like to see happen with Bitcoin. Volatility is an impediment to bringing pension funds and other major investors; thankfully, Bitcoin has been shedding some of its volatile roots.

As for competing cryptocurrencies such as Ethereum and Ripple, they no longer rely solely on Bitcoin rallies to post individual gains. Ripple is in a very interesting position because of its centralized blockchain nature; while this characteristic has drawn criticism from cryptocurrency purists, having a dedicated business development team has certainly helped to elevate XRP among investors. Heading into October, the transaction volume of Ripple had increased to a level on par with ETH, thus making it second only to Bitcoin in terms of market capitalization.

It should be noted that although the exchange rates of ETH and XRP have appreciated by nearly 40 percent in recent weeks, the trading behavior has been pretty much in line with the losses experienced by these two currencies from July to mid-September. Bitcoin, on the other hand, only retreated by 9 percent during the same period, and this explains why its recovery feels less spectacular.

Mainstream Uses of Digital Currency

Both Ripple and Bitcoin have been making headlines related to mainstream applications of their respective tokens. In countries where national currencies have been devaluating at an accelerated pace, Bitcoin has been emerging as a viable alternative; some of these nations include Venezuela and Zimbabwe, but increased use of BTC is taking place even in stable democracies such as Argentina and Turkey, where the peso and the lira have been losing value in light of deteriorating economic conditions.

As for Ripple, a centralized currency that does not allow mining for tokens, the parent company has been partnering with financial institutions such as American Express, PNC Bank and Banco Santander for the purpose of providing a money transfer platform that could one day become a viable alternative to the SWIFT network. All these developments indicate strong fundamental trends for BTC and XRP, and investors should keep them in mind when formulating market positions over the next few weeks.

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