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Ethereum, Stellar, and NEM lead alt-coin rally after Binance reopens

While Bitcoin surged from $6000 to over $8000 during the past week, other major cryptocurrencies lagged behind the market leader. Binance had blocked withdrawals during this period after a hack announced just over one week ago saw 7000 BTC siphoned from Binance’s Bitcoin hot wallet. All trading on the platform was then suspended for ten hours from 03:00 to 13:00 UTC yesterday. Many had predicted an alt-coin rally would follow Binance’s full reopening, as traders moved Bitcoin gains into other cryptocurrencies. Those predictions have been resoundingly confirmed, with every non-stablecoin in the top 50 cryptocurrencies experiencing increases ranging from 8% to more than 50% against the US Dollar in the last 24 hours.

As we reported earlier, Binance Coin (BNB) has been among the big gainers, moving from $25.17 at the suspension of trading to a new all-time high of $27.58 12 hours after the platform reopened. But while Binance’s 9.5% one-day gain has been impressive confirmation that long-term belief in the platform hasn’t been damaged by the hack, other leading cryptocurrencies have experienced explosive growth and recovered much of the ground lost to Bitcoin other the past week.

Ethereum and Stellar are by far the best performers among the top ten cryptocurrencies. Ethereum was trading at around $205 in the hours before Binance’s security upgrade began. Since trading resumed, ETH surged to almost $270, gaining 22.8% within 24 hours and 32% since the hours before the Binance shutdown. Stellar’s growth has been even more impressive, rocketing from less than $0.10 on May 14 to a 2019 high of almost $0.16.

No major cryptocurrency has been left out of the rally, with Bitcoin Cash, Litecoin, EOS, Cardano, TRON, Monero, IOTA, Ethereum Classic, Cosmos, NEM, and NEO all seeing double-digit gains against the dollar in the past 24 hours. NEM’s growth has outstripped that of even Ethereum and Stellar, moving from $0.068 to $0.0108 for a 58.8% surge within 24 hours. And even Tezos and Bitcoin Cash SV, neither of which are currently listed on Binance, have seen a similar double-digit increase.

The only losers on the price charts are stablecoins, with Tether, USD Coin, TrueUSD, and Paxos Standard all currently trading at less than $1. Dips below $1 are usually seen as indicating that traders are moving funds out of stablecoins into other cryptocurrencies, a bullish indicator for market sentiment.

How significant is the recent alt-coin surge?

Bitcoin’s upward momentum over the past week has caused many to rejoice that the bull market is truly back in business, but there has also been a lot of uncertainty over where the price increase is coming from and whether it would prove sustainable. As well as Binance suspending withdrawals, the on-going investigation into an alleged $850 million blackhole in Bitfinex’s finances recently caused large differences in Bitcoin’s valuation across exchanges. Earlier this month, Bitfinex was the first exchange to see Bitcoin’s price hit $6000 in 2019, while the price was closer to $5,600 on exchanges such as Coinbase which allow for direct fiat purchases of cryptocurrency. Binance and other pure crypto-to-crypto exchanges were also seeing similarly inflated Bitcoin prices, though not to the extent experienced on Bitfinex.

The most compelling theory for this difference was traders offloading the Bitfinex-connected Tether stablecoin in response to the New York investigation. This price disparity has now almost disappeared, with there currently being just $50 difference in Bitcoin’s spot price on Coinbase, Binance, and Bitfinex. Binance currently has the highest Bitcoin spot price of these three exchanges, with other major exchanges such as Huobi seeing a price much more closely aligned with that of Coinbase.

While cryptocurrency’s volatile price movements are always difficult to decipher, alt-coin surges typically follow large increases in Bitcoin’s price. The most extreme example of this was seen when the 2017 bull run was at its peak. Bitcoin hit its all-time high of $20,000 in mid-December, while many other cryptocurrencies hit their all-time highs in mid-January 2018, at which point Bitcoin had fallen to around $14,000.

Apart from the Binance hack and Bitfinex/Tether situation, much of the past week’s cryptocurrency news has been positive. The annual Consensus conference concluded in New York just a few days ago, with this major gathering of crypto power players often sparking significant price increases across the crypto market.

Why are Ethereum, Stellar, and NEM the biggest gainers?

Ethereum and Stellar were among the cryptocurrencies to see bullish news emerge from Consensus. As we discussed in an article on the biggest headlines coming out the event, the Ethereum Enterprise Alliance introduced new client specifications that included advice for businesses looking to link off-chain transactions to Ethereum’s public blockchain. And blockchain-as-a-service entity SIMBA Chain, which provides Ethereum-based blockchain supply chain solutions to the US Navy and Air Force, announced it was developing new combined payment and supply chain dApps for banks and enterprise that would combine Stellar’s payment services with private Ethereum-powered blockchain networks.

Other news concerning Stellar in recent days is that London-based money remittance service Paysend is to introduce a stablecoin to the Stellar blockchain network. Paysend is a disruptive fintech service that has seen explosive growth over the past year, expanding its operations to 70 countries and growing its customer base from just 50,000 in early 2018 to more than 500,000 by February of this year. Paysend operates similarly to Transferwise, allowing customers to make cross-border payments at much lower rates than most major banks. Paysend’s choice of Stellar for the launch of a new stablecoin is a sign of growing confidence in its ability to be a major player in the cross-border payments space. It follows the announcement of March of a World Wire service to facilitate cross-border payments for banks, which is being developed in partnership with IBM.

Earlier this week, NEM announced the launch of version 2.0 of its platform. Appropriately titled ‘Catapult,’ the announce which has launched NEM’s price skyward adds many features which help differentiate it within the increasingly crowded smart contract space. These include allowing multi-party signatures to approve smart contract transactions and aggregated transactions, where multiple transactions are executed simultaneously.

Will the price movement be sustained?

Some retracement almost always follows the types of big price movements that have been seen in the past 24 hours. But momentum has been building in the market since the bear run seemingly bottomed out in December 2018, a point at which Bitcoin was trading as low as $3,252. Given the uncertainty that followed the Binance hack and the ongoing investigation into Bitfinex and Tether, the explosive recent price movement will give confidence to many that the bull run is now truly taking off.

About Christopher Williams

Christopher Williams is a British writer based in South Korea with a strong interest in emerging technologies, cryptocurrency, and the development of decentralized apps.

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