What a week it has been. While equity markets in the US and Europe remained steady, the cryptoasset sector saw some remarkable returns across a host of coins. The S&P 500 hovered at the 3,300 level for most of the week, while bitcoin soared towards $12,000 before pulling back slightly to the mid $11,000s, where it has since jumped to $11,979.

The gains have not been confined to just bitcoin either, with a range of altcoins also seeing very solid performance and rewarding the investors who had faith in them.

Bitcoin endears itself to the bulls, but be wary of those who believe in smooth sailing

Has there been a specific instigator for bitcoin’s (BITCOMP) recent price rise? For me, the reasons are threefold. Firstly, the authorization for financial institutions to provide custody services of cryptoassets for clients in the US has clearly shown a significant step towards wider adoption. Secondly, payment providers such as Paypal and Visa are actively looking at adding cryptoassets to their offerings. Thirdly, the strong performance of altcoins also has had a knock-on effect on bitcoin, as investors take profits from these smaller coins and add to their bitcoin positions.

I think we should also bear in mind that there are many investors who have been in bitcoin since the lofty heights of 2017. Many of these investors may have found that the volatility of bitcoin is not for them and are simply waiting to recoup their losses before exiting their positions.

As we saw in that bull run, the $20,000 resistance level is going to be key. I think the same is true for this run. Much has been said about the levels to which bitcoin can go. Indeed the creator of the widely-used Stock to Flow valuation model has said that the cryptoasset is ‘perfectly on track’ to hit $100,000. I think investors shouldn’t get carried away when looking at such figures. Perhaps bitcoin may hit $100,000, but I am fairly sure it won’t be a smooth ride if it does. For bitcoin to hit such a level would mean a market cap of over $2tn. To put that into perspective, the world’s largest company, Apple, has a market cap of $1.9tn. It’s feasible, but I don’t think it will rocket there like many predict.

No alteration in the path of altcoins as of yet

As the eToro Monthly Cryptoasset Report showed, investors poured into the star performing coins of Binance Coin, Zcash, and Tezos in July, recognizing the outstanding performance of many of these alts. Our data also shows flows continued into popular altcoins Cardano and Stellar. 

Chainlink has continued its exceptional run of form and is now up 673% year to date. Continued positive newsflow of the cryptoasset has contributed to this performance, with a host of partnerships announced and in the works, including readable Ethereum names with War Riders and a host of Korean banks looking to share price data to users. These are in addition to the partnership with German telecom giant Deutsche Telekom announced a few weeks ago.

CoinTelegraph last week reported that 100% of Chainlink addresses are currently in profit. A powerful stat for a coin that is making great strides in the DeFi space.

Stablecoins are here to stay

In addition to the altcoins, Tether has also been on the increase, surpassing $11bn market cap, according to Decrypt. Tether and other stablecoins offer a powerful midway point between fiat currencies and cryptoassets. As cryptoassets increase in popularity, so too will stablecoins, as investors use themto mitigate volatility by not entering the crypto space directly straight away. Stablecoins also offer a tax-friendly way of taking profits and can act as a vehicle to access DeFi projects. Stablecoins are here to stay.  

Ethereum Testnet Live

In positive news for the long-running Ethereum (ETH-X) upgrades, the Ethereum Foundation successfully launched the Medalla test. There were over 20,000 validators signed up, and 650,000 ETH staked (these are of course testnet tokens as opposed to real ETH).

It is becoming increasingly evident that staking is going to be a very useful tool in the crypto ecosystem, and with Ethereum joining other Proof of Stake mechanisms that already exist such as Cardano, investors may recognize the benefits staking brings to the decentralization and scalability potential of the cryptoasset.