Altcoins Rise Along With Ethereum (ETH) Due to the Drop of Bitcoin (BTC)

Altcoins Rise Along With Ethereum (ETH) Due to the Drop of Bitcoin (BTC)

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Amidst the dramatic collapse of bitcoin, the prices of the functional altcoins are rising notably.

After BTC dropped by more than 10%, Ethereum is backed by the London hardfork. Meanwhile, the growth of functional altcoins is notable, especially those that analysts have praised several times. They are: Cardano (ADA), Polkadot (DOT), Uniswap (UNI), Chainlink (LINK), Solana (SOL), Terra (LUNA). The connection between Ethereum and altcoins is obvious.

Ethereum is the best platform for smart contracts as well as for launching Decentralized Finance (DeFi). Improving the functionality of Ethereum directly affects the quotes of coins that are launched on this platform. As a result of the hardfork, the fees are dramatically reduced and the deflationary model of ETH is launched. Now, even despite the payment of the reward for staking, the price of the second cryptocurrency will rise.

Popular analyst Nicholas Merten also notes that the London hardfork could push ETH to increase its market share. Currently, Ethereum’s dominance cannot overcome the 19% resistance level. The same situation was observed in the cryptocurrency market from March to May 2017. And in mid-June 2017, the market shares of bitcoin and Ethereum became almost equal. On June 17, 2017, Bitcoin Dominance was 37.84%, ETH occupied 31.17% of the market. According to Merten, a repeat of the bullish rally in ETH could occur. The expert states:

– I think Ethereum is a safe bet as we go into the bull market here. The continuation of altcoins, as we go into the secondary wave … We might very well have that secondary shoot-up like we had back here in the middle of 2017.

As for the secondary assets, these are altcoins connected with Ethereum first of all. For example, the price of Terra (LUNA) rose more than 160% while bitcoin dropped from $42K to $38K. Experts believe that the bitcoin crash was triggered by the statement of the SEC’s chairman Gary Gensler that cryptocurrencies should be regulated to protect crypto investors like they are protected in fiat markets. The official noted:

– The trading platforms they are on are not currently under a regulatory regime that protects them like they are trading on the NYSE.

This statement scared BTC investors, but not LUNA investors. The Terra (LUNA) protocol looks immune to regulatory changes as it supports stablecoins pegged to 17 fiat currencies and is compatible with Ethereum, Solana and others blockchains. It also provides the use of LUNA and the stablecoin TerraUSD (UST) for retail payments. Thus, news of increasing regulation of cryptocurrencies leads to a flow of funds from bitcoin to functional altcoins.