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Cryptocurrency Markets Grow by $1.6 Billion

Bitcoin has been on a recent price run, but the broader cryptocurrency market has grown too.

The past seven days have been a wild ride for Bitcoin holders. The price increased by over 20% in less than 72 hours before settling back down. There was initial speculation that people were swapping Ethereum for Bitcoin as part of an ongoing tug-of-war of market confidence in the two currencies, but these past seven days was a rising tide for cryptocurrencies overall.

The entire market cap for cryptocurrencies rose by $1.6 billion, but Bitcoin only explained $1.3 billion. Ethereum also rose without drawing resources from other cryptocurrencies, implying more fiat investment in the technology. The DAO entered markets on May 28th valued at $150m.[1] Litecoin also hit a six-month high, contributing just a little to the overall market increase.

Cryptocurrency Markets May

Techcrunch hypothesized that Bitcoin’s price movements originated in China and reflects fears of deflation. Bitcoin remains one avenue for capital flight from the country. This could explain some of Litecoin’s price increase as well: LTC/CYN markets on Jubi accounted for a large portion of trading volume increases from May 27 to May 29.

Overall, this suggests cryptocurrency markets are getting deeper and more diverse. The last time the total cryptocurrency marketcap crested $10 billion was early 2014, when a flood of bitcoin alternatives soaked up speculator’s money and Bitcoin was trading at over $620. Bitcoin still dominates the overall cryptocurrency market, but there are other contributors to overall investor enthusiasm.

[1] Note: The DAO valuation seems to reflect the $150m in ether that the DAO controls, resulting in a double-count of ether. Presumably, the price will gradually reflect not the value of the underlying ether but the value of having influence over the ether.