Ethereum killers, Altcoins and market dynamics
In the incredibly fast-paced world of blockchains and cryptocurrencies, Ethereum has long reigned supreme, but a new wave of challengers, often referred to as “Ethereum killers”, is shaking up the ecosystem. These protocols aim to challenge Ethereum and its limitations, and shake up the crypto market as a whole.
In this article, we will explore these contenders and also delve into how altcoins traditionally behave during bull markets or so-called crypto bull runs. In addition, we will touch on two key factors shaping the landscape: the upcoming Bitcoin halving and the ongoing push in the US for spot Exchange-Traded Funds (ETFs) on Bitcoin.
Ethereum and the rise of Ethereum killers
Ethereum’s dominance has been unprecedented when it comes to smart contract platforms, but problems with scalability and high fees have fueled the development of alternatives. Some, out of many, notable Ethereum killers include Binance Smart Chain (BSC), Cardano (ADA), Polkadot (DOT), and Solana (SOL).
Binance Smart Chain (BSC): Developed by the cryptocurrency exchange Binance, BSC has gained wide acceptance due to its high capacity and low transaction fees. BSC’s compatibility with Ethereum’s virtual machine (EVM) makes it easy for developers to migrate their projects from Ethereum to BSC, thus solving scalability issues.
Cardano (ADA): Launched by Ethereum co-founder Charles Hoskinson, Cardano aims to provide a more secure and scalable blockchain platform. Its unique consensus mechanism, Ouroboros, uses a proof-of-stake (PoS) algorithm to achieve consensus.
Polkadot (DOT): Founded by Dr. Gavin Wood, co-founder of Ethereum, Polkadot focuses on blockchain interoperability. Its relay chain allows different blockchains to connect and share information, solving the problem that many existing blockchain networks are divided into silos.
Solana (SOL): Solana is known for its high capacity and low transaction costs and has received much attention for its fast confirmation times. It uses a unique consensus mechanism called Proof-of-History (PoH) to improve scalability, making it a potential Ethereum competitor.
The emergence of these Ethereum killers demonstrates the increasing competition in smart contract platforms. The development of these alternatives has the potential to address the challenges faced by Ethereum, while offering different innovations and solutions for the growing ecosystem of decentralized applications. Ethereum will likely continue to be a dominant force, but its future may be shaped by a dynamic and competitive market for smart contract platforms.
Altcoins in bull runs: a historical perspective
Cryptocurrency markets are known for their volatility, and it is perhaps particularly interesting to watch what happens during bull runs when prices often rise widely. Altcoins, i.e. cryptocurrencies other than Bitcoin, often receive increased attention and significant price increases during these market upswings. The upcoming Bitcoin halving and the attempts by several major players to issue spot Bitcoin ETFs in the US add further fuel to the price increases we have seen in recent weeks.
Halving of Bitcoin: What has happened historically?
Bitcoin halvings occur about every four years and halve the rate at which new bitcoins are created. The scarcity, or shortage, caused by the halving has historically been associated with bullish market sentiments and upward price movements. As the upcoming Bitcoin halving approaches, investors are closely watching potential effects on the broader cryptocurrency market, including altcoins.
Spot ETFs on Bitcoin: paving the way for mainstream adoption
The ongoing attempts in the US to launch spot ETFs on Bitcoin mark an important step towards mainstream adoption of cryptocurrencies. ETFs provide investors with a convenient way to gain exposure to the crypto market without the complexity of direct ownership. If approved, these ETFs could attract institutional and retail investors, provide additional liquidity and potentially influence the behavior of both Bitcoin and altcoins.
Altcoins in bull runs – What drives altcoins development during a bull market?
Bitcoin dominance: When Bitcoin’s market dominance is high, it is often the case that altcoins have less significant price increases. But as Bitcoin’s dominance declines, it indicates that capital is flowing into altcoins, which could lead to increased prices.
Speculative investment: Altcoins are often seen as speculative investments with the potential for higher returns than more established cryptocurrencies like Bitcoin. This perception can lead to increased investment during bull markets.
Innovation and adoption: Altcoins that come up with innovative solutions or become widely distributed during bull runs can experience significant price increases. For example, projects related to scalability, interoperability and sustainability may receive increased attention.
Market sentiment: The general sentiment of the cryptocurrency market plays a crucial role in the development of altcoins. Positive news, partnerships and developments could drive bullish sentiment and lead to increased investment in altcoins.
The crypto market continues to evolve, offering both challenges and opportunities as Ethereum killers push the boundaries and respond to the growing demand for scalable and efficient blockchain solutions. In addition, the upcoming Bitcoin halving and the attempts to get spot ETFs approved in the US are currently driving a lot of volume to the cryptocurrency market. What the future holds remains to be seen, but the situation for Bitcoin and altcoins looks very exciting.
784% premium on Grayscale Solana Trust
GSOL shares, or Grayscale Solana Trust, were trading at a record high of USD 202 on November 10, up from USD 87 at the beginning of the month. With the SOL at $59 on November 11 and the trust holding 0.38 SOL per share, this was an insane premium of 784 percent.
The triple-digit premium signals increased the appetite of institutional investors to gain exposure to Solana. The rally comes as Solana’s domestic token increased by 480 percent year-to-date and more than 35 percent in the past week.
Since then, the price of the Grayscale Solana Trust has fallen sharply, demonstrating the importance of knowing what is included in the fund being traded. One of the most popular Solana products on this page is Valour SOLANA (SOL), an exchange-traded product that makes investing in SOL simple, safe and cost-effective. Solana is a decentralized blockchain and the fastest blockchain in the world, with more than 400 projects spanning DeFi, NFT, Web3 and more.
The product is a structured investment in the form of a tracker certificate under Swedish law. It is traded on the Nordic Growth Market (NGM) which is the primary marketplace.
The advantages of Valour’s Solana product are many, but the initial one is that it is traded on a Swedish marketplace and priced in Swedish kronor. This means that shares in this ETP can be traded through most Swedish banks and internet brokers, such as DEGIRO, Nordnet, Aktieinvest and Avanza.