Cryptocurrency News Weekly Roundup

The cryptocurrency market had an exciting week, with XRP, Ethereum (ETH) and Polkadot (DOT) all making headlines over the past few days

A rollercoaster of a week for XRP

XRP has had a rollercoaster of a week as its price soared, plunged and soared again. The week started with XRP performing excellently after a Telegram group of traders coordinated to pump the cryptocurrency’s price higher. WallStreetBets subreddit group added XRP to the list of cryptocurrencies’ pumps.

The pumping saw XRP surge by more than 115% to offset the losses caused by the SEC lawsuit on Ripple. However, XRP didn’t sustain the rally for long as it lost more than 40% of its value. The traders failed to pump XRP above the $1 mark, and it soon crashed to the $0.3 mark. XRP has started recovering, and it is currently up by nearly 60% over the past week. Despite the recent performance, there are still doubts about the cryptocurrency’s short-term price performance. XRP remains delisted on several exchanges including Coinbase and Kraken. Hence, a large chunk of retail investors no longer have access to it. As long as the SEC case with Ripple continues, XRP’s price performance would be affected.

Ethereum sets a new high price

Ether has been one of the top performers so far in 2021. The second-largest cryptocurrency set and smashed its all-time highs (ATH) multiple times this year. This week, Ether (ETH) set a new all-time high after surpassing $1,570 to trade above $1,600.

The surge comes as Decentralised Finance (DeFi) projects experience massive usage and need ETH to execute smart contracts on the network. The surge in Ethereum prices has also caused a spike in the gas fees paid on the network. The fees associated with using protocols requiring complicated transactions now stand above $1,000. Due to the high gas fees, DeFi users are now advised to consider the expenses involved in executing smart contracts before they invest.

The high gas fees also had another adverse effect on the market as some cryptocurrency exchanges halted Ether and ERC-20 withdrawals. Japanese cryptocurrency exchange Liquid told its customers that ETH and ERC-20 coins’ withdrawals would resume once the gas fees return to normal levels.

In the short-term, ETH is expected to continue its rally. The second-largest cryptocurrency could be looking to hit the $2,000 mark over the next few weeks. The continued adoption of DeFi and the ongoing Ethereum network developments could soon push the price to the $2,000 mark.

The rally by ETH, XRP and a few other cryptocurrencies have also positively impacted the general cryptocurrency market. The total crypto market cap crossed $1.13 trillion earlier this week, setting a new ATH for the general market.

While most analysts have been focused on Bitcoin’s rally, the performance of ETH, Polkadot (DOT), Dogecoin (DOGE) and XRP in recent days contributed to the general market surpassing the $1.1 trillion market cap. With more institutional and retail funds coming into the market, the total crypto market cap could continue to set new all-time highs over the coming weeks and months.

Polkadot joins the club: DOT price also sees new high

Another cryptocurrency that rallied this week was Polkadot. The fifth-largest cryptocurrency by market cap joined ETH in setting a new all-time high above $21. The cryptocurrency rallied after 21Shares revealed that it would be listing Polkadot ETP on the Swiss SIX exchange. The Polkadot ETP would be joining the likes of Bitcoin and Ethereum on the stock exchange, making it available to institutional investors. The product will be 100% collateralised against the DOT price, with 21 Shares providing a guarantee to ensure on-exchange liquidity.

Thanks to this latest development, analysts are now predicting DOT’s price to surge to $24—$30 over the coming weeks. Its trading volume has spiked, and its total market cap rose to $18 billion over the past few days.

Decentralised exchanges are gaining ground

The cryptocurrency market had a memorable start to 2021 as Bitcoin, Ethereum and a few other cryptocurrencies all attained new all-time highs.

Centralised exchanges have always been the focus, but decentralised exchanges are slowly gaining attention. In January, decentralised exchanges recorded new all-time highs in terms of trading volumes. The total trading volume on decentralised exchanges topped $50 billion last month, making it the first time they are hitting such a figure in a month.

The surge in trading volume came as more traders and investors prefer the privacy and security offered by decentralised exchanges. Jack Purdy, the decentralised finance analyst at Messari, thinks that decentralised exchanges will continue to become popular as they gain liquidity and the user experience improves to match centralised exchanges. Uniswap and SushiSwap are the major players in the decentralised exchange space, and they look set to dominate.

Grayscale is getting a competitor

Grayscale has been used by institutional investors to enter the cryptocurrency market. However, it is about to get a competitor in the form of Bitwise. The cryptocurrency asset management firm has filed for approval to publicly list its Bitcoin Fund. The Bitcoin Fund was previously available to selected private investors, but Bitwise intends to make it available to a larger audience via over-the-counter (OTC) markets.

The Bitwise Bitcoin Fund will provide competition to Grayscale, but most importantly, it will also provide an extra avenue for institutional investors to gain exposure into the cryptocurrency market. More financial institutions can invest in Bitcoin, which would help the market grow bigger and gain more adoption.