Market Wrap: Bitcoin Rises Again as Altcoins Outperform

Once again Altcoins was outperform by bitcoins as it rises again to $62K, and investors are pumping more money into crypto funds.

Bitcoin is getting back up again from a weekend dip as traders foreseen the third U.S. futures-focused bitcoin exchange-traded fund (ETF) listing. The VanEck Bitcoin Futures ETF is assumed to launch on Tuesday and will trade under the ticker symbol XBTF. Analysts continue to expect further upside in bitcoin’s price given strong investor supports on ETF approvals.

Additional news

Last week, the inflows of crypto investment funds were $1.47 billion as the record shows as investors positioned themselves ahead of the first U.S. bitcoin-linked ETF launch, by ProShares. Alternative cryptocurrency-focused funds also saw inflows. Which coincided with a near 30% rise in Solana’s SOL token over the past week.

Analysts are also observing the recent rotation to alternative coins (altcoins), which are starting to outperform bitcoin. “The crypto market is turning from being dominated by short-term traders who want to ride the speculative trends to longer-term investors who value the technical capabilities of the different blockchain’s, challenging bitcoin’s market dominance,” Anders Nysteen, a quantitative analyst at Saxo Bank, written in a research report.

Latest prices

  • Bitcoin (BTC): $62,813.67, +3.3%
  • Ether (ETH): $4,191.45, +3.53%
  • S&P 500: $4,566.48, +0.47%
  • Gold: $1,806.85, +0.69%
  • 10-year Treasury yield closed at 1.64%

Record $1.5 billion crypto fund inflows

Investors blew up a record $1.47 billion in new money into digital asset investment products last week, powered by a rally in cryptocurrencies and the launch of the ProShares bitcoin futures exchange-traded fund, according to a CoinShares report Monday.

Bitcoin-focused funds dominated last week’s inflows, at 99%. During the prior week, inflows into bitcoin-focused funds were at $70 million.

Bitcoin dominance declines

The bitcoin dominance ratio. Or the measure of bitcoin’s market capitalization relative to the total crypto market, decreases last week to 45%. The decline in the dominance ratio was due to the current outperformance of several altcoins such as ETH and SOL.

Some traders are starting to rotate into altcoins, which suggests a greater appetite for risk. “Overall, we are structurally long BTC, ETH and most layer 1s such as ALGO and SOL,” crypto trading firm QCP Capital wrote in a Telegram chat.

But is the rotation to altcoins sustainable?

The bitcoin dominance ratio, which increased from a recent low of 40% in mid-September. A similar situation occurred in 2018 before the start of a crypto bear market. At that time, the bitcoin dominance ratio rose. As investors lessen their exposure to altcoins and look for relative safety in bitcoin.

Currently, the bitcoin dominance ratio is declining from a high of 48% in July. Which was when crypto prices stabilized from a correction earlier this year. Similar to February-March 2018, traders are returning to buy the dip in altcoins that have lagged behind a sharp recovery in bitcoin over the past month. For now, some analysts expect altcoins to take the lead, because cryptocurrencies typically produce positive returns during the fourth quarter.

Altcoin roundup

  • Shiba Inu hits record high: Shiba Inu (SHIB) tapped lifetime highs on Sunday, trading at $0.0000455 at 11:20 UTC, topping the previous record reached on May 10. Prices for the meme token have risen by nearly 50% in the past 24 hours, with a month-to-date gain of almost 500%. SHIB’s latest rise comes amid rumors that Robinhood may soon list the cryptocurrency on its platform.
  • Solana also hit a new record high: Prices for Solana’s SOL tokens hit a record high on early Monday as a majority of tokens representing layer 1 blockchains followed bitcoin. The token, which is backed by FTX crypto exchange founder Sam Bankman-Fried, traded at $218.9 on Monday. According to decentralized finance data provider Defi Llama, the total value locked in Solana reached an all-time high of approximately $13.91 billion.
  • Ether hit all-time high last week while seeing continued outflows: Ether (ETH), the native cryptocurrency of the Ethereum blockchain, hit a record high on Oct. 21 at $4,361. However, despite the price increase, funds focused on the world’s second-largest cryptocurrency by market capitalization saw outflows for a third consecutive week, totaling $1.4 million last week. Other altcoins, including SOL, Cardano’s ADA currency and Binance coin (BNB), all saw inflows.

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