NairaEx Blog Providing latest news and announcements related to the NairaEx website as well as the general cryptocurrency in Nigeria.

NAIRAEX MONTHLY ROUNDUP – January Review

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January was filled with much activity in the cryptocurrency markets as Bitcoin continued to lead the pack, moving full steam ahead with newer investors and more innovation. From Dogecoin to Ethereum, alternative cryptocurrencies were full of pleasant surprises as new price levels were achieved. 

Bitcoin Beats Market Expectations with All-Time High

The king cryptocurrency, Bitcoin, hit a new all-time high of $41,940 which is over 100x the previous high of $19,800 in 2017. More institutional investors have taken interest in the cryptocurrency which has managed to beat the returns of many traditional investments. A growing number of CEOs of top companies are expressing their belief in Bitcoin and putting their money where their mouth is. From MicroStrategy to Tesla’s Elon Musk, the Bitcoin fever is spreading quickly. A jaw-dropping $1,276,147,151 was bought by Grayscale Investments while MicroStrategy purchased over $10 million in Bitcoin. Even the world’s biggest asset manager, Blackrock, has given two of its funds the ability to invest in Bitcoin futures. The firm (which has $7.81 trillion under management) had prospectus documents filed with the US Securities and Exchange Commission (SEC) for two of its funds. 

With each new year, more people recognise the utility of Bitcoin as a store of value and hedge against inflation. The Bank of Singapore recently stated that the cryptocurrency could replace gold as a store of value. However, it highlighted challenges that would need to be solved. 

According to Mansoor Mohi-uddin, chief economist at the bank,

“Governments are very wary of any technology that could potentially displace national currencies. This would reduce the ability of policymakers to print money during economic crises.”

Ripple Rises above Challenges

Ripple has faced a significant amount of regulatory challenges which have adversely affected the price of XRP. A lawsuit by the United States Securities and Exchange Commission (SEC) caused many exchanges to stop trading XRP as allegations of an illegal securities offering by Ripple came to light. 

The digital token organisation responded to the allegations:

“The functionality and liquidity of XRP are wholly incompatible with securities regulation. To require XRP’s registration as a security is to impair its main utility,”

Thankfully, Ripple may have an advantage as a Ripple Board member, Michael Barr, was set to be nominated for the role of Comptroller of Currency with the Biden administration. The new administration in America’s government will inevitably affect policies that influence cryptocurrencies. Having a Ripple board member in such a significant position could allow for better understanding of the nature of cryptocurrencies and digital tokens which may help to put tokens such as XRP in a positive light among key decision makers in the U.S government. News of  the appointment led to an increase in price of XRP to $0.30. Prices increased even further later in the month after a rally for GameStop shares and alternative investments such as Dogecoin.

Over a period of 24 hours, XRP price rose by over 50% after Dogecoin lost over half of its recent gains following a pump in value.The price of the digital token rose to $0.50944, hitting its highest level since 22 December. The jump represented the biggest single-day gain of the token value since 2007. 

More Use Cases for Bitcoin

Bitcoin is gaining favour among the masses, not just as an investment option but also as a way of making life easier for business operations and day-to-day interactions. More companies around the world are using the apex cryptocurrency to pay their employees. Among such companies is  Sequoia Holdings LLC, which is allowing its workers to get paid in Bitcoin (BTC).

 Richard Stroupe, CEO of Sequoia Holdings says,

“We’re excited to offer the members of our team this new benefit…Many of our employees are enthusiastic supporters of cryptocurrency, and we’re happy to help them gain exposure to this trillion-dollar asset class.”

The unhackable nature of Bitcoin makes it a desirable option for many companies which have a wide range of cybersecurity concerns when it comes to how their employees interact with the firm. The transparent nature of transactions on the blockchain could make it easy for companies to audit their transactions and make reports for tax purposes. 

Dogecoin and Ethereum Lead Altcoins

New energy was injected into Dogecoin and Ethereum in January as the cryptocurrencies experiences new highs. Dogecoin, which was originally started as a joke rose to a record high of $0.082 with over 800%, giving the cryptocurrency a market value of $7 billion. 

Interest by retail investors, which was sparked by communities on Reddit, is said to be the cause of the spike in price. Communities on Reddit had initiated a movement to purchase GameStop shares as a joke, which led to more ironic purchases. Unfortunately, prices of Dogecoin would later tumble by 46% in 24 hours. 

The investing craze is seen as a proof of concept for Bitcoin, showing just how big demand could get when communities on the internet agree on an idea, irrespective of how outlandish it may seem.

Meanwhile, Ethereum continues to test all-time highs. The cryptocurrency climbed to $1,477, reviving hopes of a future $10,500 price. With billions in trade volume having been generated on the Ethereum blockchain, there’s no telling just how high prices could get as decentralised finance expands. 

The invention of the cryptocurrency has led to the creation of numerous new projects (over 8,000). As time has passed, these projects found new ways to create cross-chain functionalities that improve demand on their networks.

It’s only been one month and the cryptocurrency markets are showing a lot of promise. With innovation picking up, more blockchain projects are taking new risks which could further propel the markets forward. 

About the author

By calvin
NairaEx Blog Providing latest news and announcements related to the NairaEx website as well as the general cryptocurrency in Nigeria.