On Thursday, Altcoins Outperformed the Market Significantly
In an unusual occurrence within the cryptocurrency market, several coins and tokens witnessed price growth on Thursday, while the primary cryptocurrency struggled to maintain its value.
Among the assets experiencing significant price increases were Chainlink (LINK 17.24%), exhibiting a near 21% surge starting from 4 p.m. ET. Although not as rapid as Chainlink, other popular coins such as Aptos (APT 5.68%) and Sui (SUI 5.34%) also saw over 6% growth. Cardano (ADA 3.17%) followed close behind with a gain of approximately 4%.
Bitcoin's Mixed Day
The unusual aspect of this development is that altcoins generally move together with Bitcoin (BTC -0.82%), but on this particular day, the leading cryptocurrency experienced both gains and losses. Bitcoin temporarily dipped below the $100,000 mark in the morning before recovering as the day progressed. Despite Bitcoin's volatility, many altcoins continued to perform well. This trend suggests that numerous investors believe that other coins and tokens offer greater potential for growth.
Meanwhile, Republican president-elect Donald Trump expressed support for the crypto industry during an appearance on CNBC early Thursday. Trump stated that "We're gonna do something great with crypto," hinting at the future administration's intentions in the field. Although not a clear-cut policy statement, Trump's words gave a boost to investor confidence in the industry.
Easing Monetary Policies
Furthermore, the trend towards central bank rate cuts received a significant boost across the Atlantic. The European Central Bank (ECB) reduced its key interest rate by 0.25% to 3%, marking the fourth cut this year. Following similar moves by the U.S. Federal Reserve (Fed), cheaper interest rates can make safer assets less attractive, thereby increasing investor interest in riskier assets such as cryptocurrencies.
A Crypto-friendly Appointment
Finally, the political landscape offered an additional boost to the crypto industry with the announcement of an influential appointment. Republican congressman French Hill of Arkansas is reportedly tipped to head the House Financial Services Committee, an appointment that is certain to present favorable prospects for cryptocurrency developers and investors. Hill has shown support for the crypto industry, including co-sponsoring the Financial Innovation and Technology for the 21st Century Act (FIT21), which was seen as pro-crypto legislation.
In light of the ECB's interest rate cut and Trump's supportive comments towards cryptocurrencies, investors might see an opportunity to diversify their portfolios by investing in various cryptocurrencies, such as cost-effective alternatives to safer assets. Furthermore, the expected pro-crypto stance of the House Financial Services Committee under Republican congressman French Hill could potentially attract more financial institutions to invest in the finance sector, thereby further boosting the crypto market.
