Although most investors are keeping a close eye on Bitcoin, some crypto assets have been seeing extremely strong performances as of late.
In the past day alone, more than a dozen altcoins in the top 100 cryptocurrencies are up more than 10%. This is a performance that strongly outpaces Bitcoin’s 1% gain and Ethereum’s 1.2% move higher over the same time span.
While the move higher is catching some investors off guard, there is an explainable reason why there’s such a discrepancy between this set of altcoins and Bitcoin.
Coinbase Is Looking to List Over 12 Crypto Assets
The outperformance of certain altcoins against Bitcoin is related to an announcement from Coinbase.
On June 10th, the digital asset exchange revealed that it is looking to add 18 new cryptocurrencies in the coming months: which are as follows in alphabetical order:
- Compound’s COMP
- KEEP Network
- Origin Protocol
- Ren Render Network
- SKALE Network
Some of these crypto assets are not yet live, yet those that are trading have appreciated strongly in the past 24 hours.
Seven of the names listed are up over 10% in the past 24 hours, benefiting from the surge in liquidity and buying interest that often comes when Coinbase lists a crypto asset not widely available in most jurisdictions.Logos of crypto assets that Coinbase intends to add in the coming months (Source: Coinbase).
Coinbase remarked in the announcement that support for these assets is in line with the company’s goal to offer access to “at least 90% of the aggregate market cap of all digital assets in circulation.”
To confirm that these assets should be supported, Coinbase will evaluate these prospective assets “against our Digital Asset Framework to assess factors like security, compliance, and the project’s alignment with our mission of creating an open financial system for the world.”
Bitcoin Stands to Benefit
Bitcoin could benefit from the rallying prices of these altcoins.
Bitcoinist reported on June 10th that Kelvin “Spartan Black” Koh, a partner at The Spartan Group and a former Goldman Sachs partner, said BTC could see an influx of investment as altcoin valuations become “frothy”:
“We have seen a major re-rating in many of the smaller altcoins (esp DeFi ones) in the past 4-5 weeks while BTC has been range bound. At some point, the valuation of these alts will start to look frothy and the capital will flow back to BTC.”
That’s to say, as altcoins become overvalued in the eyes of smart investors, profits will be cycled out for the relatively non-volatile Bitcoin.
Coinbase’s Decentralized Finance Focus
Price action aside, the listing spree that Coinbase intends to go on in the coming months has a clear focus and direction: decentralized finance, better known as DeFi.
Five of the 18 coins that Coinbase is looking can be classified as “DeFi coins,” with use cases that revolve around this nascent aspect of the cryptocurrency industry.
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