The major cryptocurrency on the market, including bitcoin, Ethereum, and Cardano, increased in value. The only exception was the Ripple, which showed poor performance in recent weeks.
In the last 24 hours the price of bitcoin grew by 8 per cent, of Ether rose 10 percent, and Cardano – 15 percent. Although for the last three hours the cost of three of these cryptocurrencies slightly decreased, they still showed a good daily gains.
The popularity of bitcoin
After the significant correction that occurred in early January, when the cost of most of the cryptocurrency fell by more than 50 percent from their peak, the popularity of bitcoin rose as investors began to use cryptocurrencies with a lower level of volatility.
At that time, the index of dominance of bitcoin rose to 38 percent after a record low, which was 32 percent. Over the past week, the index of dominance of bitcoin has fallen from 38% to 34%, and the daily volume of transactions in bitcoins has decreased more than twice – from 490 000 to 242 000 transactions.
The decrease in daily transaction volume in bitcoin led to the purification of memory pools and drastically reduced commissions. A widely used bitcoin wallets, such as Blockchain, recommended a fee of $ 50 Satoshi for one byte or 0.5 USD per transaction average size. Lower fees increase the availability of bitcoin for novices and casual users, especially those who use bitcoin for small payments.
It is obvious that the recent reduction in transaction fees with bitcoin was caused by a fall daily trading volume not the solution for scaling, as major bitcoin companies have not yet established a Segregated Witness (SegWit) and not implemented technology of grouping transactions.
Thus, in the case of re-increasing the value of bitcoin and the growth of daily trading volumes Commission will also increase. High transaction fees using bitcoin do not allow novice and casual users to seamlessly carry out transactions and perform calculations.
The high Commission is likely to affect the bitcoin price in the short term in case of market recovery. To ensure that the cost of bitcoin has returned to its maximum values, a need for innovative solutions for scaling and implementation SegWit bitcoin companies.
The demand for Cardano, better known as ADA in Japan and South Korea, is growing rapidly in the Asian market. Many investors perceive Cardano as a competitor to Ethereum because the currency is also based on the Protocol of smart contracts. The fundamental difference between Ethereum and Cardano is to use a consensus algorithm “proof of share ownership” (proof-of-stake) in Cardano.
Because Cardano frequently traded on the stock exchange UpBit South Korean and Japanese cryptocurrency markets, the recovery in these two markets will, most likely, to the increase in the value of Cardano. The South Korean market is still waiting for the resumption of registration of new accounts of the cryptocurrency exchanges of the country, which is scheduled for January 30. It is expected that as new users to the market value of such cryptocurrencies as Cardano, Qtum and EOS, with a strong following in Asia, will grow.
In the short term, the main cryptocurrencies will probably recover faster than the alternative cryptocurrencies in the market. Brian Kelly, founder of BKCM, said in the program “Fast Money” on CNBC that investments of institutional and retail traders are growing rapidly, and it is unlikely that large investors pereorientirovanija on altcoins with small market value and less liquidity.