The price of a single bitcoin clocked a new record yesterday at 18:26 UTC, when it touched $17,623.45. But it didn’t make many headlines. Instead, it was a rally in altcoin prices that took center stage. According to reports, altcoins added as much as $20 billion to the overall market capitalization of cryptocurrencies.
At 14:19 UTC, the cryptocurrency market was worth $507.8 billion, a new record. It crossed the $400 billion mark last Wednesday. The price of a single bitcoin was $17,257, unchanged in the last 24 hours.
Altcoin Rally: Spoiled for Choice
Traders had multiple choices in the altcoins rally. There was Litecoin, a cryptocurrency whose value has more than doubled since Monday. (See also: Litecoin's Phenomenal Year.)
Litecoin recorded gains of 90% yesterday after creator Charlie Lee appeared on CNBC to promote the cryptocurrency’s superior transaction speeds as compared to bitcoin. Lee later tweeted out a cautionary statement for traders looking to make quick profits from the transaction. (See also: Litecoin Creator Calls For Caution As Price Soars.)
Ethereum, the world’s second biggest cryptocurrency by valuation, also registered impressive double-digit gains. As of this writing, Ripple is on the upswing. And Dash, a cryptocurrency that is competing with Litecoin to create a payment network, is also up by more than 11%.
As with everything else related to cryptocurrency, the fundamental drivers behind the rally are unclear, since there have been no major announcements from any of the cryptocurrencies.
That said, Asian investors have played a big role in the altcoins rally. Ethereum and Litecoin posted their highest trading activity on Bithumb, a South Korean exchange. The government there may introduce a capital gains tax for investors who profit from cryptocurrencies.
Warnings and a $40,000 Price Target For Bitcoin
Before they jump into the cryptocurrency markets, investors and traders should take note of billionaire Mike Novogratz’s warning. He has invested roughly 10% of his overall fortune in cryptocurrencies and plans to launch a fund exclusively devoted to the asset class.
“We are in the middle of a speculative mania,” Novogratz told CNBC. “Phase one of the crypto revolution is just selling the story. None of these protocols will be ready for prime time for at least two to three years.” He said the Litecoin rally didn’t have legs and also set a $40,000 price target for bitcoin in “three, two months.”