The strong performance of major cryptocurrencies over the weekend, which sent the total valuation of the cryptomarket to $375 bln, is an encouraging sign, analysts say.
Bitcoin’s market capitalization rose 2.86 percent to $8,477.21 during last Friday's trading session and continued to rise over the weekend, according to data from CoinMarketCap.
Ripple, Bitcoin Cash and EOS led the rally. Ripple gained as much as 17 percent to $0.85, Bitcoin Cash jumped 11.48 percent to $1,066.28, while EOS added 12.47 percent to $10.48.
US Post Tax Rebound
According to currency traders, the steady increase was a result of the end of the US tax season. Bitcoin price rose about 8 percent since last Tuesday’s deadline to file taxes, adding up to a 25 percent gain over the previous two weeks.
John Spallanzani, a portfolio manager at Miller Value Partners, told Bloomberg news:
"Tax selling is over; larger hedge funds have entered the market with deep pockets and strong hands, all positive signs.”
The cryptocurrencies are fueling a financial revolution said Daniel Masters, chairman of CoinShare, an $800 mln digital crypto assets firm in an interview with Bloomberg news yesterday.
“At the core of the cryptocurrency revolution is the use of distributed ledger technology to democratize peer-to-peer transactions, similar to what the internet did to the news.”
Leakage Not An Issue
Some analysts have expressed concern that the increased investment in cryptocurrencies may impact the stability of fiat currencies like the USD or GBP and cause leakage, or the exit of money from one market to another.
“There is no leakage problem, at least not yet. I don’t think there’s any concern from the community at the moment that there’s leakage. But I think they’re beginning to realize that there is potential for it in the future.”
Masters said that the perspective surrounding digital assets dramatically shifted at the end of 2017, when the cryptomarket reached more than $1 tln in combined assets.
“The issue is less about a fight to the death between legacy systems like the USD or GBP and cryptocurrencies but rather about what portion of the financial ecosystem cryptocurrencies will accrue. I think even if it’s only 5 percent at the end of the day, that market will then still be much bigger than it is today.”