The crypto market continues to swing wildly, with Bitcoin and Ethereum rising or falling 5% nearly every day this week. That movement has pulled most altcoins with it and today is no different.
The value of Phantom (CRYPTO:FTM) rose as much as 10.8% in the last 24 hours, although it has fallen sharply this morning and is down 2.3% in the last 24 hours at 2:20 p.m. EDT. Polygon (CRYPTO:MATIC) is another cryptocurrency that’s had a great day, climbing 12.7%. Finally, NEAR Protocol (CRYPTO:NEAR) rose as much as 11.7% but is now up just 2.3% in the last day.
This week has seen money flowing back into the crypto industry and Thursday’s trading was no different. Across the board, cryptocurrencies are up without any significant news from the industry.
Earlier this week, NEAR Protocol announced an $800 million global ecosystem fund, which it hopes developers will use to build out an ecosystem for the cryptocurrency. Management said the focus of funding will be for decentralized finance teams who “are actively revolutionizing and reimagining the way we interact with money.” Funds will be spent over the next four years.
Phantom, Polygon, Near Protocol, and many other altcoins are jockeying to be the go-to cryptocurrency for disruptive real world applications. For now, rising valuations give them some validity but it’s developer and consumer use that will ultimately drive their value.
The speculative frenzy continues in cryptocurrencies and it doesn’t seem like there’s any rhyme or reason to any given crypto moving higher these days. Dog themes have been popular, but the trend overall has been a rising tide lifting all boats.
Investors in cryptocurrencies should be used to the volatility at this point. Crypto doesn’t seem to have a slow day but overall the trend is higher. Phantom, Polygon, and NEAR Protocol are all up around 30% over the last week.
Long term, investors should watch how developers are able to exploit these cryptocurrencies for applications in finance and smart contracts. NEAR Protocol is putting its money behind developing a sustainable business and others are doing the same.
Until we see significant use cases, I’m going to look at altcoins very skeptically. Not all of them will survive and they’re all fighting an uphill battle against larger cryptocurrencies. That may mean I miss out on a random winner, but it also means I’m protected against betting on the wrong cryptocurrency in an already volatile industry.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.