December 19, 2024
Bitcoin hits all-time high, taking altcoins along for the ride
Bitcoin (BTC) cracked $100 000 over the past week and set an all-time high when it traded at $108 000 this week.
But some extraordinary profits are being made in altcoins (all cryptocurrencies other than BTC).
The chart below shows the Altcoin Season Index produced by Blockchain Centre. It measures the rate of growth in altcoins relative to BTC.
When 75% of the top 50 altcoins outperform BTC over the previous 90 days, it is “altcoin season”.
The chart shows the index cracked the 75% level earlier this month. A reading above 60% has historically signalled a major rally for altcoins.
Altcoin Season Index
Source: Blockchain Centre
There’s no question that bitcoin’s mammoth two-year rally is the real engine behind the recent surge in altcoin prices. That, and Donald Trump’s election in the US. He has appointed crypto-friendly Paul Atkins as Securities and Exchange (SEC) chair to replace the outgoing Gary Gensler, seen by many as something of a crypto grinch.
Read: FSCA greets crypto boom with batch of new licences
The second largest crypto by market cap is ether (ETH), the native currency of the Ethereum blockchain, which this week rallied to R70 000 in local currency terms. It has now formed a quadruple top, which is technically rare and seen by many as a sign of a major move up.
Ether price in ZAR
Source: Google
Solana, once labelled the “Ethereum killer”, is likewise on a sprint, pausing last week at $240, a level last seen in 2021.
Solana has ambitions of becoming a major player in the future of finance and is built for speed and scale. It currently handles 4 369 transactions a second at a cost of $0.0025 per transaction – almost free. Visa (the card network) is reportedly capable of handling 2 000 transactions a second but in actuality handles around 1 700.
Below is a chart of Solana, which formed a double top at the previous high of $240 before retreating to $217.
Solana USD
Source: CoinMarketCap
Solana is currently the fifth largest crypto by market cap (about $9 billion), just behind Ripple/XRP ($14.2 billion market cap).
XRP (Ripple)
Source: CoinMarketCap
XRP (the cryptocurrency issued by Ripple) exploded to life in recent weeks, and is up nearly 400% over the past month after its legal victory over the SEC, which categorised it as a security and accused Ripple of operating without the required licence. That court case is now behind it, though the company was forced to pay $125 million in fines for selling XRP to institutional investors.
Read: What’s in store as we close out 2024 and enter a new and uncertain 2025?
XRP gained further impetus in recent weeks with news that several applications have been filed with the SEC for the launch of XRP exchange-traded funds (ETFs), similar to those launched earlier this year for ETH and BTC.
This opens the door to massive institutional flows as XRP is designed for cross-border payments at much lower costs – and greater speeds – than traditional forms of payment.
Tron
Source: CoinMarketCap
Tron is another altcoin benefiting from a change of guard at the SEC and the incoming Trump presidency.
Like Ripple, Tron found itself in the SEC’s legal crosshairs for fraud and securities violations. There is talk that these charges could now be dropped.
Read: Bitcoin bolstered by pro-crypto contender to lead US agency CFTC
Tron is the 10th largest crypto in terms of market cap. It is a decentralised, open-source platform that allows users to create and share digital content, and for developers to create decentralised applications (dApps). Tron aims to remove the need for middlemen between content creators and their audiences, allowing creators to earn higher revenues for their work.
Stablecoins
US dollar-linked stablecoins Tether and USDC are both ranked in the top 10 cryptocurrencies by market cap, accounting for $170 billion combined.
These crypto equivalents of the USD are used by traders to switch out of other more volatile cryptocurrencies into something more stable, but are also being used around the world to hedge against depreciating currencies and for remittances.
USD stablecoin settlements have reached $300 billion a day, according to US investment firm VanEck – a 180% increase since the start of 2024.
Trends to watch in 2025
One of the trends to watch in 2025 is the emergence of AI agents, which are specialised AI bots aimed at maximising yield or improving Twitter engagement.
“The current focus of agent building has been DeFi (decentralised finance), but we believe that AI agents will transcend financial activities,” says VanEck.
“Agents can be employed to act as social media influencers, computer players in gaming, and interactive companions/helpers in consumer applications.
“These AI agents have already become important X/Twitter influencers, such as Bixby and Terminal of Truths, who reached 92k and 197k followers, respectively. As such, we believe the enormous potential for agents will result in the birth of over 1 million new agents in 2025.”
Read: Crypto volatility picks up as Trump-fuelled rally starts to fray
Another trend to watch is the growth in tokenised real-world assets such as real estate, equity or debt instruments. One company expected to be at the forefront of this is Coinbase, which may tokenise its stock and deploy it to its BASE blockchain.
There is huge potential to tokenise otherwise illiquid assets and allow fractional ownership with almost instant settlement.
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