The outlook for the crypto market is hardly encouraging, given Russia’s ongoing invasion of Ukraine and the adversarial stance of the U.S. Federal Reserve towards cryptocurrencies and NFTs.
The past week has seen the price of Bitcoin rise by nearly 6%. The world’s most valuable digital asset is currently trading at just north of $41k, with a market cap of nearly $800 billion. This increase was also reflected in the prices of alternative cryptocurrencies (altcoins)
such as Ethereum (ETH), Binance Coin (BNB), Ripple (XRP), Cardano (ADA), Solana (SOL), Avalanche (AVAX), Polkadot (DOT), and Dogecoin (DOGE) in the last seven days.
A look at ten of the best performing altcoins by market capitalization, using data from CoinMarketCap
, shows that the altcoin market has regained its trillion-dollar status, rising from nearly $970 billion to stand at almost $1.05 trillion at the time of writing.
One altcoin that stands out is AVAX, which recorded a 31% increase in its price in the last seven days. The second largest cryptocurrency by market cap, ETH, also performed well in the same time period, posting a 14.8% increase in its price from previous levels.
ADA also put in a pretty decent shift, recording a 14% growth in value, having previously sold at a low of $0.78.
SOL gained 11% in the 7-day period, while XRP followed closely with a 10% bump in its price. BNB Coin, DOT, and DOGE each made gains of 8.5%, 7.9%, and 6.1% respectively.
The altcoin rally has largely outperformed bitcoin in a rising market, signifying a growing appetite for risk among crypto traders despite uncertain trading conditions. However, while the numbers might look impressive, some altcoins are actually rallying from multi-month lows, while others are still well below their all-time peaks.
Executive Order Hampering Sustained Crypto Market Growth
The crypto market is currently at an impasse as players continue to mull over the potential effects of American President Joe Biden’s recent executive order
on digital assets.
While many analysts had predicted a regulatory tsunami to wash over the crypto market, President Biden’s executive order struck a more reasonable tone and sought to harness the potential benefits of digital currencies.
However, an unwanted byproduct of the executive order is the huge number of government agencies and departments that will shortly begin to meddle in the affairs of the crypto sector. These entities include: the U.S. Securities and Exchange Commission (SEC), the Federal Reserve, the Defense Department, the Treasury Department, and the Labor Department, to name a few.
All this means that the crypto space could eventually get bogged down by miles of bureaucratic red tape, a situation that could be detrimental to the rapid growth of the sector.
Escalation of Russia’s Invasion of Ukraine Might Stop Altcoin Rally
Gains made in the recent altcoin rally could, however, be lost if the conflict
in Ukraine continues unabated. The war has shone an unintended spotlight on cryptocurrencies, with the Ukrainian government soliciting donations in cryptocurrency to fund the defense of the country, and the Russians using crypto to circumvent sanctions
imposed on it by Western nations.
However, analysts believe that an escalation of the war could see an increase in the volatility of the crypto market, which could in turn put a damper on the recent altcoin rally.