Investments in cryptocurrencies like Bitcoin, Ethereum, and Ripple, have been growing exponentially since the beginning of the year. The total investments in the cryptocurrency market are expected to rally above $100 billion in the following weeks or even days.
Reasons behind the cryptocurrency rally
About one month ago, financial analysts and economists explained the sudden spike in investments in cryptocurrencies as a result of the uncertainty surrounding traditional currencies that diverted the attention of investors to alternatives as well as changes in the policies of Japan and other Asian countries that made trading of cryptocurrencies easier.
Even though the above may have been the factors that sparked the interest in cryptocurrencies, it seems that more and more investors are attracted to them because they consider them as reliable investments.
Interest in cryptocurrencies grows exponentially
Although many hedge funds are still reluctant to invest in cryptocurrencies, they seem to be attracting investments and a lot of interest from casual investors as well as from people who do not want to miss out on the opportunity.
Additionally, many start-up companies have identified the popularity of cryptocurrencies and raise funds through an initial coin offering (ICO) which is a really innovative way of getting started. A good example of this is Brave that launched a coin offering to fund a new web browser and was able to raise the equivalent of $35 million in units of cryptocurrency tokens in a matter of half a minute, according to CoinDesk.
Initial coin offerings are considered by many as alternatives to traditional initial share offerings.
Cryptocurrency market to cap above $100 billion soon
According to JP Buntinx, one of the world’s leading Bitcoin writers, the cryptocurrency market as a whole is expected to cap above the threshold of $100 billion in the following days or weeks.
The well-known analyst believes that after that, it is very difficult to predict what might happen next. The growth trend may continue, or a natural correction may occur. A correction should not be seen as a negative thing as corrections are often natural, and they occur in all markets.
Markets cannot only go up because that would create a bubble. Sometimes natural corrections help avoid bubbles and prepare the market for future gains which is what all cryptocurrency enthusiasts want.
