Peercoin Breaks Parity as Altcoin Rout Continues


It has been an awful week for altcoins. Peercoin broke parity and proceeded to lose a further 17 percent to hit $0.83. Bitcoin’s silver, Litecoin, hit a low of $4.85 today, a fall of $2.50 in 7 days. Namecoin lost over 20 percent from $1.54 to $1.27.


Peercoin Breaks Parity

After a short-lived holdout, Peercoin prices broke the important $1 figure on August 9th. In the next 3 days, the crypto lost an extra 17 percent to hit a multi-month low of $0.83. A week ago, I wrote that more losses may be on the way for PPC. Why is this happening and what’s behind the latest altcoins rout? Let’s look at the fundamentals.


Altcoin Fundamentals

There have been no major positive developments in Altcoinia for some time now. The latest ‘’good news’’ was the adoption of Litecoin by major Chinese bitcoin exchanges few months ago. Since then, no major retailers started accepting altcoins for payment, as merchant adoption has focused almost exclusively on bitcoin. In fact, even if merchants wanted to accept some of the more popular altcoins, there are no major bitcoin payment processors that are willing to take on that risk. The only payment processor that dabbles in altcoins is Moolah .

On the negative side, the May Ripple fiasco completely eroded confidence in altcoins. On May 22nd, Ripple’s project’s co-founder Jed Mccaleb announced that he will sell his entire stake. It was estimated that he owns around 9 Billion XRP, 9% of all XRP ever created, or nearly 100% of all XRP currently on the market. The shock announcement crippled Ripple’s value and its total market cap fell from 2 Billion to just over $30 Million ($42 Million now). For more on this, read my article ‘’Bitcoin Feeds on the Tears of Altcoins’’. The event showed just how easy is to crash the value of the smaller altcoins.

Upcoming US regulation may disproportionately hurt Altcoins

Another factor will be upcoming regulation in the States. On July 16th the New York State Department of Financial Services proposed strict new rules for virtual currencies. According to many cryptocurrency experts, the proposed regulation will stifle innovation in the US, if adopted as is. The hit on altcoins and altcoin related businesses will be disproportionately harder, due to their smaller size. As of August 12th 2014, bitcoin reigns supreme in the crypto space with a market cap of over $7.4 Billion. The next 10 cryptocurrencies have a combined market cap of less then $350 Million. While some bitcoin businesses may be able to comply with the new NY rules, for many altcoin companies the regulation may mean an end to operation in the US.

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: US Currency Continues to Grow Ahead of GDP Data Release Market Analysis: Gold and Commodity Currencies Resume Their Decline Market Analysis: EUR/USD Takes Hit While USD/CHF Surges Market Analysis: The Yen and European Currencies Headed to New Lows Market Analysis: US Federal Reserve Contemplates Future Interest Rate Hikes Amid Economic Resilience

Latest articles

Financial Market News

US Government Shutdown: Assessing Economic Impact and Recession Risks

The recurring spectre of a government shutdown has once again loomed over the United States, prompting concerns about its potential economic consequences. The shutdown may occur this weekend unless lawmakers agree on spending levels and whether to give more aid


S&P 500 Analysis: Price Reaches The Edge of Abyss

Investors in the US stock market have serious reasons to worry: → The likelihood of a shutdown of government agencies is becoming more and more real. It could happen as early as next week if a budget agreement is not reached


Bitcoin Cash Analysis: Promising Resistance Breakout

Yesterday, the head of the SEC regulator, Gary Gensler, answered questions for 4 hours before the Financial Services Committee of the US House of Representatives, which, among other things, related to cryptocurrencies. What has become known: → on the eve of

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.