Following strong gains over the past few months, the cryptocurrency market has experienced volatility this week. Bitcoin (BTC) and top altcoins such as Solana (SOL), XRP, and Dogecoin (DOGE) have all recorded significant increases this year. Therefore, we explore some potential reasons behind the outstanding performance of cryptocurrencies shared by Matrixport.
Why did BTC see a strong rebound this year?
As investors turn their attention to the digital asset space, BTC and top altcoins have both seen strong growth. Notably, Donald Trump's electoral victory in November further fueled market sentiment supporting a cryptocurrency regulatory environment. As a result, the cryptocurrency industry has seen significant gains.
On the other hand, institutional adoption rates have also soared, driving up prices. Notably for Bitcoin, Matrixport noted that with increasing institutional interest, cryptocurrency has 'reached milestones' this year.
At the same time, the report highlighted Bitcoin's recent surge to a historic high of $108,000. The report pointed out that the approval of spot Bitcoin ETFs in January and Donald Trump's proposal to establish a national Bitcoin reserve are the main reasons for Bitcoin's surge. Additionally, institutional interest has also boosted market sentiment, as evidenced by the significant purchasing trends of companies like MicroStrategy and Metaplanet.
On the other hand, Bitcoin miners like Hut 8 and MARA have also joined the competition to hoard Bitcoin. Meanwhile, the report also states that Bitcoin is expected to reach $160,000 by 2025, indicating further growth potential for the asset.
XRP, SOL, and DOGE follow the trend.
The surge in BTC has also triggered a rebound in the broader cryptocurrency market. Top altcoins such as Ethereum, XRP, SOL, and DOGE have also gained immense appeal due to their strong performance this year. Notably, the report shows that Ripple's XRP surged after its 'landmark victory' against the SEC in August, with the judge ruling that XRP does not constitute a security, providing much-needed regulatory clarity for the asset.
On the other hand, Donald Trump's election victory and the launch of Ripple (RLUSD) further fueled market sentiment. Meanwhile, Solana surged due to its technological advancements. The report states, 'Solana's high throughput and low-cost blockchain make it a leader in decentralized applications and speculative assets. Additionally, top Solana meme tokens like Popcat and Dogwifhat have also gained significant attention, further boosting market sentiment.
When it comes to Dogecoin, reports state that due to the market's focus shifting to meme coins, this top meme coin is thriving alongside BTC and other currencies in 2024. With the rise of meme culture, the establishment of the Department of Government Efficiency (DOGE) by Elon Musk under the Trump administration further sparked interest in the token. Notably, Musk had previously supported the token on social media, and given that the abbreviation of his new department (DOGE) is similar to Dogecoin, the price of this meme coin surged.
Despite recent positive trends and rebounds, the cryptocurrency market crashed today. At the time of writing, the total global cryptocurrency market capitalization had fallen by about 10% to $3.21 trillion. BTC dropped nearly 8% to $93,841, indicating that the market is facing significant selling pressure.
On the other hand, the price of Ethereum fell by 12%, XRP fell by more than 9%, and the prices of Solana and Dogecoin fell by 11% and 20% respectively, indicating a gloomy market sentiment.
