That was a week ago when the price of one Bitcoin was a mere $650. Today it flirts with $1000 and its market cap blew through the $10 billion mark yesterday. But the surge of government-issued money flowing into digital currencies doesn’t stop with Bitcoin.
Almost all of the lesser known alternative cryptocurrencies (altcoins) experienced massive gains in the last few days, too. Look at the market caps the top cryptocurrencies below. Pay attention to the % Change and the graphs:
Most of these currencies like Litecoin, Anoncoin, Namecoin, Goldcoin, and 56 others on the multi-currency exchange Cryptsy.com, trade against Bitcoin. Therefore, when they grow 3-4 fold against Bitcoin while itself gains in dollar value, the returns have become astronomical for altcoin daytraders.
Once you have some Bitcoin, Cryptsy makes it super easy to trade for other altcoins. I even managed to turn 2 bitcoins into 7 bitcoins there in a very short period.
One altcoin I got lucky with was Anoncoin (ANC). I bought some because it seemed unique compared to some of its peers. In the span of a few days it went from .0005BTC to .003BTC, a 500% gain against a currency (Bitcoin) that gained around another 25% at the same time. Look at its 1-month chart:
The video below by the Bitcoin Channel on YouTube explains the rise as overflow from people who don’t want to sell their Bitcoin for fiat dollars. It seems they’d rather diversify them into the altcoins.
The Bitcoin gains of late feel different from April’s bubble. It feels more like Bitcoin is starting to reach critical mass, globally. And it seems its popularity spawned an entirely new asset class called cryptocurrencies to invest in.
It’s tough to say what the future holds for Bitcoin or these other altcoins. They may be purely speculative at the moment, However, strangely, I feel more secure holding them than I do with Federal Reserve Notes.
Check out Cryptsy to trade Bitcoins and altcoins.