The Cryptocurrency Trading Landscape

Will Ethereum, Litecoin, and Ripple Follow Bitcoin’s Lead?

Led by acceptance of bitcoin into the financial mainstream, 2017 has been the year of cryptocurrency. They now appear poised to become a coveted asset class all of their own. As consumers have gotten accustomed to the idea of digital money, enthusiasm for cryptocurrencies has skepticism about them. Traders have also taken notice, actively engaging in cryptocurrency trading on CFD, spot, and futures markets.

Bitcoin is certainly the pioneer in this new form of commerce, but it’s not the only cryptocurrency option. A group of secondary instruments known as “altcoins” have recently exploded in popularity. The front runners of this group are Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).

Ethereum

Ethereum aspires to challenge the existing client-server relationship that the internet is based upon. Through the use of blockchain technology, ETH seeks to decentralize control of online data storage from privately owned servers and clouds. Currently, its main application is similar to bitcoin, existing as an online mode of transfer.

The 2017 performance metrics for ETH are impressive:

• Market price has spiked more than 8000%
• Market capitalization has increased to be valued in excess of $65 billion

In terms of market capitalization, ETH is second to only bitcoin. However, with a circulating supply of more than 96 million ETH, it’s a much larger product. Investors do not seem to be concerned with dilution, driving price north of $700 per ETH. If bitcoin is the gold standard of cryptocurrencies, then ETH is the silver.

Litecoin

Developed by former Google employee Charlie Lee, Litecoin is considered by many to be the next step in bitcoin. The evolution of existing technology, LTC has made several advancements over bitcoin, including improving transaction speed and minimizing cost.

Its technology has fragmented the cryptocurrency mining sector, locking out bitcoin mining conglomerates from LTC’s blockchain. This feature has leveled the playing field and stabilized the introduction of new LTC into existing supply.

Like ETH, LTC has experienced eye-popping growth for 2017 . Rallying from a market price of only a few dollars in January, LTC has exhibited robust appreciation:

• Over a 9000% increase in value
• Market capitalization has grown to more than $16 billion
• Ranks as a top five cryptocurrency in terms of daily traded volumes

LTC has been a favorite target among investors because of its affordability. For 2017, price has fluctuated between $4 and $350, a more economical option than the thousands required to purchase a single bitcoin.

Learn more about Bitcoin futures options here.

Ripple

In contrast to bitcoin and ETH, Ripple was designed to service the needs of financial institutions. Created in 2012, Ripple exists both as an exclusively digital payment network and a viable cryptocurrency. Its goal is to challenge the modern banking infrastructure and replace the Society for Worldwide Interbank Financial Telecommunications (SWIFT) infrastructure.

Ripple connects more than one hundred financial institutions around the globe offering fast, affordable transactions. Transactions are reportedly completed in four seconds, much faster than ETH, bitcoin or conventional SWIFT systems.

In line with bitcoin, ETH, and LTC, XRP’s 2017 performance has been strong:

• XRP’s market capitalization has grown to more than $18 billion
• XRP’s price rallied from 1 cent (January) to more than 49 cents (end-of year)
• XRP ranks as the fourth largest cryptocurrency by market capitalization

The major difference between Ripple and most other cryptocurrencies is the size of its float. With more than 38 billion XRP in circulation, supply is massive. In traditional investing terms, XRP is the leading penny stock in the cryptocurrency marketplace.

The Future

The launch of standardized bitcoin futures products by the CME Group and Chicago Futures Exchange (CFE) was a final nod to bitcoin’s legitimacy. But are bitcoin futures only the tip of the iceberg? Are more cryptocurrency trading options on the horizon? Ultimately, only time will tell.

Nonetheless, if bitcoin futures prove successful, Ethereum (ETH), Litecoin (LTC), and Ripple (XRP) may eventually become offerings themselves. In fact, they share many attributes with traditional futures products:

• Substantial asset value
• Inherent pricing volatility
• Public interest

No matter what a trader believes the future will bring for bitcoin, ETH, LTC, and XRP, new opportunities may be just around the corner. For more information on cryptocurrency trading and how to become active in bitcoin futures, contact the market professionals at Daniels Trading.

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