Altcoins
Why Altcoins Like Toncoin and Pepe Stumbled This Week
Crypto consumers around the world got excited about the launch of Ethereum spot ETFs! In fact, that wasn’t the case.
Many crypto watchers expected this week to be as hot as the summer season for cryptocurrencies and tokens. After all, the man who could be our next vice president is a well-known crypto advocate (and former venture capitalist), and a new financial instrument tied to a prominent cryptocurrency has debuted.
But somehow the stars didn’t align, and for the most part, the altcoin market crashed. Both utility and meme cryptocurrencies fell during the period, according to data compiled by S&P Global Markets Insights. Yourcoin (TONNE 0.78%), for example, fell by almost 8% over the week, while Peas (POINT 1.62%) and Shiba Inu (SHIB 3.42%) did not do much better, with losses around 7%. Grandpa (PEPE 2.99%) fell by 6%.
Are Hopes for a Cryptocurrency Ally Fading?
That high-profile crypto fan is, needless to say, Republican vice presidential nominee JD Vance. News of his rise to the bottom half of that party’s ticket has crypto fans excited; if Vance and running mate Donald Trump win, the cryptocurrency industry could have a pretty powerful advocate firmly ensconced in the White House for several crucial years.
The excitement faded with Joe Biden’s announcement that he would not seek reelection. Vice President Kamala Harris confidently stepped up to the plate, and at least initially seemed to have a strong sense of purpose and savvy for the vice presidential job. At the same time, doubts seemed to be growing about Vance’s suitability as a No. 2 candidate. This naturally made crypto enthusiasts less enthusiastic about the upcoming election.
This should have been at least somewhat mitigated by the kick-off of Ethereum place exchange traded funds (ETFs). After all, when Bitcoin ETFs were launched earlier this year and sparked a surge in interest in the leading cryptocurrency. This made perfect sense, as a crypto spot ETF is an elegant way for an investor to put money into such assets without having to own them directly.
Of course, few people expected such a craze for Ethereum ETFs. These instruments are no longer a novelty, and Ethereum does not have quite the fame and fascination of its big brother. Still, like Bitcoin ETFs, the Ethereum variant offers the market a quick and easy entry into the currency. And Ethereum is a more versatile instrument than Bitcoin and has more potential, in my opinion, so it is quite surprising that the new ETFs have not been more successful.
Perhaps it’s “crypto ETF fatigue,” or perhaps many investors are only interested in these instruments if they have “Bitcoin” in their title.
Signs of life at the end of the week
That being said, heading into Friday afternoon, there seemed to be something of a rebound in Cryptoland. Bitcoin recovered from the bottom and many altcoins also gained (like Ethereum, which by early evening was up 3%). This may be the start of a new bull run now that the market is recovering from the Harris Effect and the damp squib of the Ethereum ETF launch.
Next week is sure to be an interesting one in the cryptocurrency market; watch this space for more.
Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool recommends TON. The Motley Fool has a disclosure policy.