Crypto
How Bitcoin Price Rally Boosts the Entire Crypto Industry
The recent Bitcoin rally has given a positive impulse to the whole crypto industry. The decentralized finance (DeFi) sector currently leads the pack at 33%, followed by smart contract platforms at 30%, intermediated finance at 28% and the metaverse at 27%. “All are benefiting from a strong month for smart contract networks and tokens tied to their applications,” CoinMetrics notes.
Bitcoin (BTC), the leading digital currency on the market, has experienced a ‘rally’ or sustained growth so far in November, something the rest of the cryptocurrency industry has taken advantage of.
That rally lifted the total cryptoasset market capitalization to more than $1.4 billion, with BTC and ether (ETH) surpassing the $37,000 and $2,000 per unit barrier, respectively.
“Positive sentiment around Bitcoin spot exchange-traded funds (ETFs) spread to other sectors of the market,” digital asset market data and analytics firm CoinMetrics notes in a recent report.
Those weren’t the only digital assets to benefit; cryptocurrencies such as Solana (SOL) and other altcoins; as well as some mutual funds, miners, and validators also enjoyed the uptick.
In the case of SOL, it has experienced a 516% year-to-date increase, also driven by its own catalysts. One of those is a software upgrade, called Firedancer, which will aim to increase speed, reliability, and validator diversity and is scheduled to launch in 2024.
Asset management firm VanEck believes SOL has the potential to be worth four figures over the next 7 years. It was priced at $10 in January 2023 and is currently at $62, as can be seen in the TradingView chart.
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A spot Ethereum ETF also benefits the market
In the company’s view, the market was not only boosted by Bitcoin spot funds. That stimulus was boosted by news of BlackRock’s unveiling of a spot ether (ETH) ETF last week, a fact reported by CryptoNews.
On November 16, that ETH-based fund from BlackRock, the largest investment firm on the planet, was registered with the U.S. Securities and Exchange Commission (SEC).
Derivatives market also grows thanks to Bitcoin rally
Open interest in Bitcoin futures traded on the Chicago Mercantile Exchange (CME) has also soared in recent weeks. CryptoNews reported that BTC futures trading volume on CME rose 73%, representing $44.1 billion, while ETH futures rose 60%, equivalent to $10.2 billion, the highest since last April.
It has thus significantly outpaced the open interest in Binance, the exchange with the largest global cryptocurrency trading, as seen in the chart As mentioned above, this market rally reached a broad spectrum of sectors within the digital asset ecosystem.
The growth in the various areas so far in November
The decentralized finance (DeFi) sector currently leads the pack at 33%, followed by smart contract platforms at 30%, intermediated finance at 28%, and the metaverse at 27%. “All are benefiting from a strong month for smart contract networks and tokens tied to their applications,” CoinMetrics notes.
The firm concludes by asserting that both Bitcoin and spot ether ETFs have not only bolstered market sentiment, but have also “spurred network activity and adoption while promising to broaden access to the asset class among a wide range of participants through a previously unexplored [ETF] investment vehicle.”
The report notes that the immediate impact” of ETF spot approvals has yet “to be seen,” but the current positive market response and increased institutional participation “underscore a broader acceptance and maturation of digital assets.
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(Featured image by André François McKenzie via Unsplash)
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First published in CRIPTONOTICIAS. A third-party contributor translated and adapted the articles from the originals. In case of discrepancy, the originals will prevail.
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