Bitcoin (BTC) has had an excellent 2020, but how are other cryptocurrencies doing? Let’s look at how some of the top cryptocurrencies by market capitalization have done it.
Bitcoin
First, Bitcoin has seen a huge rise since January 1, as the price rose from $ 7,195 to $ 28,422.
Within twelve months, the price of Bitcoin rose by 290%, better than all major stock indices and most stocks, apart from a select few, including Tesla (TSLA).
The main catalysts behind Bitcoin’s increase were the increase in institutional demand, favorable financial conditions due to liquidity injections in the central bank and the fall of the US dollar.
The combination of the three macro factors boosted the momentum of Bitcoin in October. Finally, as large institution-oriented platforms, including CME and Grayscale, saw a huge increase in volume and inflows, Bitcoin’s rally accelerated.
Ethereum
Ether (ETH)’s price performed strongly during 2020, despite the recent stagnant phase against Bitcoin.
The Ether price started at $ 128 in major stock exchanges in 2020 and peaked at ETH $ 748 on December 30th.
The general manager of Ether’s demonstration during November was the release of Eth2. After reaching a threshold of more than 400,000 ETH in deposits, Eth2 started.
Eth2 is an important network upgrade for Ethereum, as it scales the blockchain exponentially over time. Without Eth2, Ethereum can process less than 20 transactions per second. With Eth2, this figure increases to potentially thousands of transactions per second.
Old school altcoins
In annual performance, most of the old-school altcoins (those of 2017 and earlier), including XRP, Cadano (ADA) and Stellar (XLM), lagged behind Bitcoin pr.
From the original altcoins, XRP initially performed particularly well in November, as Bitcoin reached its highest point.
XRP started the year at $ 0.1923 and rose to $ 0.91010, showing a fourfold increase in about 11 months. However, as BTC rose more than $ 20,000, altcoins took a hit, lowering XRP to $ 0.52. Following the SEC case against Ripple, XRP fell further to $ 0.17.
Smart contract protocols
Polkadot, Chainlink, EOS and Tezos have also been flocking since the beginning of the year. The four smart-contract related cryptocurrencies each had significant catalysts for short-term marches when BTC rose to $ 20,000.
Chainlink, for example, has benefited from the explosive growth of decentralized financing space (DeFi). Chainlink is a blockchain network with oracle focus and the purpose of an oracle is to feed data to DeFi protocols.
As the total value in DeFi reached $ 16 billion, Chainlink rose, as did many other DeFi-linked tokens.
Despite various catalysts, Polkadot, EOS, Tezos and Chainlink have lagged behind Bitcoin in year-to-day profits. The main reason behind the muted price action was Bitcoin’s meteoric rally to $ 20,000, which caused altcoins to retreat.
Specialized tokens, such as Wrapped Bitcoin, USDC and Tether, also had significant growth in terms of market capitalization. These tokens are used primarily on DeFi protocols and the rapid increase in user activity has made each token endemic to the DeFi ecosystem.
Tether has just surpassed a market capitalization of $ 20 billion!
This fantastic milestone is another confirmation that Tether retains its number one spot as the most liquid, stable and reliable currency! pic.twitter.com/sorWjzChIo
– Tether (@Tether_to) 18 December 2020
Tether in particular experienced a rapid increase in market capitalization in the fourth quarter of 2020. As Cointelegraph reports, Tether, the most widely used stable currency in the cryptocurrency market, exceeded $ 20 billion in valuation.