Cryptocurrency Is Having Another Historic December

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

December started with some big news for cryptocurrency traders. Not only did bitcoin (BTC) surge past its previous all-time high of $19,783.21, ethereum (ETH), the second-largest digital asset by market cap, launched its Ethereum 2.0 protocol, which impacts hundreds of thousands of digital tokens that are traded on the Ethereum blockchain.

But while crypto traders and analysts are hoping for continued support above the psychological milestone of $20,000, the coin market has been less steady through December with bitcoin charting a range between around $19,900 and $17,700 and causing the broad crypto market to fluctuate in kind.

The resurgence of cryptocurrency to this new peak prominence has crypto traders and the trading world at large keeping a keen eye on what bitcoin does from here. Trading research platform VantagePoint has leveraged its own predictive A.I. software to integrate cryptocurrency market forecasting into its suite of analysis tools, which will be demonstrated in an upcoming free live demo.

Prior to the demo, we’ll take a look at some of the key aspects of the cryptocurrency market that stands to drive digital asset pricing through the rest of 2020 and into the new year.

Bitcoin Eyes $20,000

Perhaps the largest overriding influence on the state of the crypto market is the state of bitcoin, since the oldest cryptocurrency is also by far the most valuable of the tens of thousands of coins available to trade.

Bitcoin’s market cap represents 65% of the total $550B cryptocurrency market. What’s more, about a third of the current total crypto market was added by bitcoin over the past two months alone.

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And while these figures are coloring the market’s current range bound behavior, they may only be a prelude for even steeper growth, with retirement investment firm MassMutual allocating $100M of its funds into bitcoin. It’s a move that was highlighted by JPMorgan Chase & Co’s JPM Jamie Dimon, who said the move could portend $600B in additional capital to the coin if other institutions follow MassMutual’s lead and put even 1% of their holdings into bitcoin.

Of course, while bitcoin is the 800-pound gorilla in the room, there are myriad other coins making surprising move in its wake, and it bears looking to them for insight into the broad crypto market’s overall strength.

High Hopes For Ethereum 2.0

Although Bitcoin has gained the lion’s share of the crypto market’s current gains in just a few weeks, it hasn’t been alone as other assets have chartered a similarly steep path higher through the year..

Specifically, ethereum, the second largest coin by market capitalization, has more than doubled in price through the previous six months and has added more than 350% year-to-date. This move, which outpaced bitcoin, came in the run-up to its long-anticipated 2.0 proof-of stake protocol.

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The new proof-of-stake protocol differs from the previous system of minting new coins to miners who put in the computing work in mining new blocks and instead pays miners based on how much of an initial stake they put into their mining.

It’s a new system that isn’t unlike equity investing, and the hope is it will increase efficiency in conducting and verifying transactions more quickly. And with more than 200,000 tokens on the Ethereum blockchain, Ethereum 2.0 could have wide-reaching effects on reducing congestion and improving scalability through the entire crypto market.

Still, it is early days in the rollout of Ethereum 2.0. But in conjunction with the current influx of capital into bitcoin, it may serve to help sustain the digital asset market at or close to its current levels into the new year.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.