When I wrote my last article about Bitcoin it was sitting at US$13,807 and the price right now is US$13,502. A drop of around 2.5% isn’t much to write home about, but it is on top of more losses from the high of US$19,500 a few weeks ago.
The price has actually risen from New Year’s Day, when the price was almost US$13,000. However, it’s the slow-and-steady decline back towards $10,000 that could see many retail investors rush for the exits. Why hold a speculation tool if it’s losing money?
The Bitcoin decline could be due to cryptocurrency investors moving onto potentially better things. Bitcoin cash, Ethereum, Litecoin and some others offer potentially better futures than Bitcoin.
However, there’s one cryptocurrency that’s blowing away all the others in terms of growth. Ripple is one currency I mentioned in my previous article. On Friday Ripple rose by around 50%. Since 1 December 2017 the Ripple price has risen by 669%. Since 1 January 2017 the price has risen by over 30,000%.
Share market investors will be aware of the term ‘market capitalisation’, which is the number of shares multiplied by the share price. A cryptocurrency market capitalisation works in the same way, it’s the currency price multiplied by the number of coins.
The cryptocurrency market cap is seen as important because it gives the currency more legitimacy the bigger it gets. Bitcoin is the clear market cap leader, whilst Ethereum has always been the second biggest.
However, Ripple has grown to be the second biggest with a market cap of around $100 billion.
Ripple’s technology may be a bit better than Bitcoin, but the excitement surrounding Ripple could be because digital currency exchange Coinbase may soon list Ripple (XRP) as an option.
The rise (and fall) of cryptocurrencies is truly fascinating and I’m sure in the future there will be many economic classes in schools, colleges and universities that analyse this period. Whether the story ends with a dramatic crash of ‘worthless’ currencies or begins a new era of globally-accepted currencies remains to be seen.
Either way, cryptocurrency trading isn’t for me. A good tech stock like Altium Limited(ASX: ALU) is my preferred way of getting exciting growth.
Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.