The market was back in a risk-taking mood this week, and that was good for cryptocurrencies across the board. It didn’t hurt that there was also some positive news about development on the blockchain.
According to data provided by S&P Global Market Intelligence, Avalanche (CRYPTO: AVAX) is up 66.6% since 4 p.m. ET last Friday and was up as much as 68.7% this week. Solana (CRYPTO: SOL) is up 6.9% and was at one time up 24%. Filecoin (CRYPTO: FIL) is up 8.8% and peaked at a 17.4% gain.
It’s impossible to deny that the market’s move back to riskier assets this week was driven by a positive inflation report on Tuesday. Inflation in the U.S. was flat month over month, and that caused the market to speculate the Federal Reserve would keep short-term rates flat over the next few months — and may even cut rates in 2024. The stock market spiked on the news, and cryptocurrencies followed.
Avalanche got some positive news when JPMorgan Chase announced it had tested tokenized portfolios using multiple blockchains, including Avalanche. Banks and brokerages are testing confirming financial transactions on the blockchain rather than using traditional systems. This could be less expensive and provide better interoperability between institutions around the world.
Solana’s momentum continues as investors begin to look past the stigma of the token and realize its fast speeds and low cost could provide the kind of utility needed for mass adoption.
Continuing the move for utility tokens is Filecoin, which is used to store data on the blockchain. Decentralized exchange Sushi was also launched on the Filecoin blockchain this week. If the blockchain is used for valuable uses like banking and trading, it is likely Filecoin will get more usage as well.
After years of crypto trading that wasn’t rooted in real utility or value creation long term, we are starting to see some intriguing use cases emerge. JPMorgan’s tests could be a precursor to more financial industry uses for cryptocurrency, and there are all kinds of concepts being tested on Solana.
This is a period of maturation for the industry, but it may not play out in the way investors hoped. Businesses are looking for what they can build on the blockchain and how they can save costs or add value, not necessarily about the ups and downs of token values. I’m bullish on the blockchain, but also not convinced each of the native tokens will be the biggest beneficiaries of rising blockchain usage.
It may be time to start taking some gains off the table after a month of speculative increases in cryptocurrencies. I think this is an industry with a bright future, but the token gains may not last if the economy or stock market goes south.
10 stocks we like better than Avalanche
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Avalanche wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 15, 2023
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Travis Hoium has positions in Solana. The Motley Fool has positions in and recommends Avalanche, JPMorgan Chase, and Solana. The Motley Fool has a disclosure policy.
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]