Altcoins Surge as Crypto Market Regains Steam
AVAX climbed 24% to hit a record of $79.58.
The crypto market is bouncing alongside equities Thursday, a day after the Federal Reserve announced monetary policy in the U.S. is about to become a lot tighter.
While bitcoin and ether are trading 1% higher over the past 24 hours, prominent alternative cryptocurrencies like ADA, SOL and LUNA are up between 6% and 25%.
AVAX, the native token of the Avalanche open-source platform, added 24% to hit a record of $79.58, according to data from Messari.
Altcoins are outperforming bitcoin on the way up after they took a relatively bigger hit during the sell-off earlier this week. The price action highlights bitcoin’s long-held status as a crypto market haven, given its higher market cap. The cryptocurrency’s price is a lot more stable than the prices of most altcoins.
“The added volatility of a lesser known coin makes it much more risky, and so they tend to fall a lot harder when things are moving down and rise much sharper on the way up,” said Mati Greenspan, CEO of Quantum Economics.
S&P 500 e-mini futures also traded in positive territory, adding as much as 0.5%.
Fed Chairman Jerome Powell also said that the central bank’s quantitative-easing (QE) program will likely conclude by mid-2022. Low interest rates and QE in the U.S. add to bitcoin’s appeal as an inflation hedge, according to Matthew Lam, a research analyst at Aspen Digital.
“We believe BTC continues to gain institutional appeal as a hedging asset and the end of QE next year is not likely to become a major driver of BTC price,” Lam said.