Interest in Cryptocurrencies Rising

By Gabriel Ojimadu, Alpari

Interest in cryptocurrencies is continuously on the rise across the world. The prices of some of these currencies are rising at breakneck speeds. Over the weekend, the bitcoin hit a new all-time high and is trading at 3235 USD today. The market’s shine is attracting not only buyers (not all that shines is gold), but is also creating the need for more ICOs. Everyone is trying to take advantage of this and so there’s been a lot of hype around ICOs recently, which actually creates competition among cryptocurrencies. In the picture below is a monthly bar chart of new ICO funding.

For the month of June, the amount of funds attracted by ICOs came to 464.04bn USD and 540.04 USD in July. On the chart, we can see that the last two bars are both new records. One can conclude from this that interest in cryptocurrencies is rising. From our point of view, it seems that if the number of ICOs starts growing too quickly, we’ll witness the market overheat sooner or later and many ICOs will be unsuccessful. This will be in danger of happening when we see the number of new investments start to drop.

I’d like to add that ICOs are as of yet virtually unregulated, so investing in new cryptocurrencies is highly risky for investors compared to simply buying cryptocurrencies that have already established themselves on the market. In our opinion, it’s better to favour those cryptocurrencies that feature in the top 10 in terms of market cap. Conservative investors are advised not to invest in any currencies with a market cap below 1.5bn USD. As of today, there are only 6 cryptocurrencies that meet this criterion according to coinmarketcap.com; they are Bitcoin (53.16bn USD), Ethereum (24.57bn USD), Ripple (6.9bn USD), Bitcoin Cash (4.12bn USD), Litecoin (2.37bn USD) and NEM (2.32bn USD).