Bitcoin Diamond, Flow: Mid-Cap Cryptocurrencies In Top 1% Of The Asset Class
Andy Hecht | Jul 08, 2021 20:03
This article was written exclusively for Investing.com.
- Decline in the asset class in Q2
- Prices still higher over the first half of 2021
- As Bitcoin and Ethereum move in opposite directions, looking for diamonds in the rough
- Bitcoin Diamond (BCD) is the 118th ranked cryptocurrency
- Flow (FLOW) is 89th in the crypto hit parade
The second quarter of 2021 was an extremely volatile period for the cryptocurrency asset class. Prices moved significantly higher in 2020 and Q1 2021. The parabolic rally continued into Q2, but the price explosion became an implosion for many cryptos during May and June.
Elon Musk’s concerns about the carbon footprint of crypto mining may have caused some selling. China’s ban on mining and some trading activity turned the bull into a ferocious bear as Bitcoin, Ethereum, and other tokens halved in value from all-time highs reached during the second quarter.
The long-term price appreciation remains staggering. Opponents of the asset class look at the recent corrections as the beginning of the end. Supporters believe it presents a golden opportunity to buy.
Volatility can be a nightmare for investors, but it creates a paradise for traders looking to profit from wide price ranges in a frantic market. Meanwhile, the memories of fantastic returns from owning many of the cryptos currently available remain a powerful force for those looking for the next digital currency that will deliver life-altering profits.
Bitcoin Diamond (BCD) and Flow (FLOW) have higher market caps than nearly 99.9% of the asset class. However, both have market caps below the $500 million level, making them mid-cap cryptos.
h2 Decline in the asset class in Q2/h2According to CoinMarketCap , the cryptocurrency asset class’s market cap stood at the $767.482 billion level at the end of 2020. On Mar. 31, it rose to 1.978 trillion, a 157.72% rise.
During Q2, the market cap peaked at over $2.4 trillion until Bitcoin, Ethereum, and a host of other tokens reached unsustainable levels. The selling that caused token prices to plunge sent the market cap for the entire asset class to the $1.447 trillion level at the end of Q2, a 26.85% decline for the period.
However, over the first half of 2021, the market cap was 88.54% higher than at the end of 2020.
h2 Prices still higher over the first half of 2021/h2Bitcoin and Ethereum are the 800-pound gorillas in the cryptocurrency asset class. Over the first six months of 2021, Bitcoin posted a 20.09% gain. The price moved from $29,137.74 on Dec. 31, 2020, to $34,991.38 per token on June 30.
Meanwhile, Ethereum rose from $742.31 at the end of 2020 to $2,265.49 on June 30, a 205.19% gain over the six-month period. Both Bitcoin and Ethereum may have halved in value from their respective Q2 highs as they became falling knives, but the six-month performance remains impressive.
h2 As Bitcoin and Ethereum move in opposite directions, looking for diamonds in the rough/h2
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A trend in the leading cryptos developed over the past months. Ethereum delivered ten times the percentage gain as Bitcoin over the first half of 2021. In Q2, while Bitcoin posted a loss, Ethereum managed to move higher from the Q1 closing level.
Source: CQG
The monthly chart shows the volatile price action in Q2 that caused Bitcoin futures to post a 42.11% loss for the quarter.
Source: CQG
The monthly Ethereum futures chart shows the wide price variance in Q2. However, the second-leading token managed to gain 16.20% in the second quarter of 2021.
Bitcoin’s decline and Ethereum’s rise during Q2 came as market participants favored Ethereum’s protocol, leading to the outperformance. The other over 10,700 tokens experienced lots of price volatility in Q2.
Bitcoin Diamond the 118th ranked cryptocurrency
Bitcoin Diamond (BCD) is a fork of Bitcoin that seeks to add more transaction capacity to the network. There are ten times more BCD than Bitcoin tokens, meaning the total supply will eventually reach 210 million tokens. BCD’s website states Bitcoin Diamond is better than a credit card, cash, or fiat currency.
On July 8, BCD is ranked the 118th cryptocurrency by market cap. At $1.90 per token, BCD’s market cap stands at the $360.61 million level at time of writing.
Source:
The chart shows that BCD came to market with great fanfare in late 2017 when the price peaked at $94.22. But the token’s price collapsed.
While BCD made a higher low of $10.42 on May 7, 2021, it was just over the $2 level on July 6 and has slipped a bit lower since. BCD is a mid-cap cryptocurrency that has performed more like coal than a diamond since the November 2017 high.
h2 Flow is 89th in the crypto hit parade/h2Flow (FLOW) is a blockchain designed for extensive scaling without the use of sharding techniques. Sharding is a database partitioning technique used by blockchain companies to enhance scalability that enables increased transaction processing.
Sharding reduces the latency or slowness of a network since it splits a blockchain network into separate shards. FLOW assists apps like NFT marketplaces and crypto-infused video games. FLOW’s website outlines it is a blockchain built for “the next generation of apps, games, and the digital assets that power them.”
On July 8, FLOW was the 89th leading cryptocurrency. At $15.209 per token, FLOW’s market cap is currently at the $674.99 million level.
Source:
The chart illustrates that FLOW began trading in late January 2021 and traded in a range from around $6.40 to $38.59 per token. The price trended lower since early April, reached a low of $6.67 on June 22, and has been rebounding over the past weeks.
BCD and FLOW are mid-cap cryptocurrencies. When considering adding any cryptos to your portfolio, only invest capital that you can afford to lose as volatility is likely to continue.
Moreover, with over 10,770 cryptos floating around in cyberspace on July 6, many will wind up as dust collectors in computer wallets. Some tokens could deliver incredible rewards, but they will be the exception rather than the norm.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
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