The recent scenario reminisces about how Bitcoin has scaled up over the past month. On the contrary, Ethereum recovered just below 15% in the same period whereas Ripple gained up to 16%. However, the growth of Bitcoin Cash obstructed despite having the better features compared to Bitcoin in terms of scalability and speed – two major parameters.
Investors’ superfluity towards Crypto based ETF
There are a number of fundamentals that significantly play the higher performance of Bitcoin as compared any cryptocurrency. Now that SEC-regulated cryptocurrency called ETFs are expected to enter the market soon, more and more fund managers are in rat-race to introduce their own cryptocurrency based ETF to raise capital from the institutional and accredited investors. However, the Security and Exchange Commission (SEC) is yet to approve the crypto-based ETF. The major benefits of crypto-based ETFs are that they are liquid financial instruments. They could be easily traded without paying transaction fees.
While doing portfolio planning, it is recommended parking capital with crypto based ETFs as it is one of the safest ways for unregulated crypto funds that the institutional investors have in their portfolio. So the accredited investors are awaiting to welcome the arrival of crypto based ETFs soon. This will definitely prove to be the new asset class that gives a boon to other crypto currency like Altcoins.
Corporates’ inclination towards using crypto currency – Bitcoin
Now that the blockchain industry has been omnipresent amongst the investors and corporates community world-wide, the major credit card company – Mastercard won a patent to manage the ‘fractional reserves of block chain currency’. The concept is as simple as it allows Mastercard users to execute transactions using as currency.
The major benefit to use cryptocurrency through the credit card is that it speeds up the payment process. For example, the Bitcoin led transaction takes around ten minutes to process. Let’s us not forget that the configuration done by Mastercard would allow the transactions done as quickly or directly as possible. It is expected to incorporate the Bitcoin based transactions almost in all transactions going forward. The major benefit for the Master card to use Bitcoin except other digital coins available in the market is that the Bitcoin allows peer-to-peer transactions that makes transactions decentralized. We may also expect the other credit card majors will start using the same model to the extent that the Mastercard’s model is successful down the line.
The geo-political factors between the two geographies
The US and China trade frictions are well-known that have led the fluctuation in prices of crypto currencies worldwide. The people have observed this movement by looking at the change in Bitcoin’s price and the devaluation of the Chinese Yuan. Let’s not forget that the devaluation of the Yuan mainly caused by the US trade threat that has had Chinese investors to exchange their Yuan versus Bitcoin and not versus traditional currencies due to the limitations prevailing in the foreign exchange operations in China.
Needless to say that if the present geopolitical condition persists between the two countries – USA and China for a longer period of time, the Bitcoin prices are expected to hike thereby allowing Chinese investors to be a part of foreign holdings in an off-regulated cryptocurrency even though the trading in the cryptocurrency like Bitcoin is not allowed in China.
The aforesaid factors clarify as to why the Bitcoin outperforms compared to the rest of the crypto currencies in the market. On the whole, Bitcoin leads the market despite the fact that altcoins offer more innovative and appealing features from the technology point of view.