Ethereum, the second-largest by market value, has roughly tripled in the last two months
Bitcoin alternatives are closing the gap with the market leader after names like stellar and cardano became red hot as 2017 was closing.
The biggest cryptocurrency's share of market value has fallen to a record 36 per cent from 56 per cent a month ago, according to CoinMarketCap prices for coins and tokens. Stellar, designed for cross-border payments, has more than doubled in the first trading days of this year, achieving a record market cap of more than $13 billion.
That kind of move raises questions as to whether speculators will drive up second-tier digital coins at the expense of bitcoin, even though they have different purposes. The paper value of all cryptocurrencies combined has more than doubled to almost $700 billion in the past month.
"The altcoins today, in large part, are not trying to be bitcoin competitors," said Lex Sokolin, global director of fintech strategy at Autonomous Research LLP in London. "They are doing something else entirely -- ethereum as a smart-contracts platform, iota as a machine-economy token, ripple for interbank payments, and so on." How each is used "should become increasingly relevant as the novelty of crypto wears off."
Crypto correlation
Relative performance is now a multibillion-dollar question as professional investors search for ways to value digital assets that seem to defy traditional techniques, such as profit and dividend potential for equities, or industrial-demand outlooks for commodities. Correlation, for example, is one of many technical-analysis tools used across asset classes in forecasting, and altcoins historically have moved mostly in step with bitcoin...Read more
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