AI-Driven Cryptocurrency Market Rally
On Monday, the cryptocurrency market experienced a notable rally, primarily driven by the surge in artificial intelligence (AI)-related cryptocurrencies. As altcoins continued to outperform Bitcoin (BTC), several native tokens associated with innovative blockchain technologies gained significant traction.
Among the standout performers were the native tokens of the layer-1 blockchain Near (NEAR) and the decentralized computing platform Render (RNDR), both of which advanced impressively by 18% to 20% over the past 24 hours. These tokens emerged as the fastest gainers within the broad-market benchmark, CoinDesk 20 Index, which recorded an overall gain of 1.5% during the same timeframe.
Additionally, the decentralized machine learning protocol Bittensor (TAO) saw a remarkable increase of 17%, while Livepeer (LPT) continued to build on its recent gains. Barry Silbert, the CEO of Digital Currency Group (DCG), referred to Livepeer as an “under the radar crypto AI play” in a post on X, which likely contributed to its upward momentum. Notably, Livepeer is also included in the Grayscale Decentralized AI Fund, a significant investment vehicle launched by DCG’s asset management arm.
Bitcoin and Ethereum Performance
In contrast, Bitcoin’s performance was relatively subdued, with a gain of less than 1%. The leading cryptocurrency struggled to reclaim the critical 200-day moving average, which currently hovers just below $64,000. However, Ethereum’s native currency, Ether (ETH), demonstrated stronger relative performance with a notable return of 3.5%, reflecting investor confidence in the Ethereum ecosystem.
Emerging Tokens and Ecosystem Developments
Another noteworthy performer in the market was the native token of the blockchain data availability project, Celestia (TIA), which surged by 12% following news that its ecosystem development organization, Celestia Foundation, successfully raised $100 million in investments, led by Bain Capital Crypto. This influx of capital is expected to drive further innovation and development within the Celestia ecosystem.
The positive price action for TIA may have also been bolstered by recent comments from Democratic nominee Kamala Harris, who indicated at a fundraising event that she would support innovative technologies such as AI and digital assets as a tech-friendly president. This endorsement could signal a more favorable regulatory environment for cryptocurrencies and blockchain technologies in the future.
Traditional Markets Influence
A glance at traditional markets revealed that gold prices reached new record highs, while stock markets showed modest gains. These developments can be attributed to the recent decision by the Federal Reserve to lower interest rates by 50 basis points on Wednesday. Chicago Fed President Austan Goolsbee remarked on Monday that this rate cut is likely the first of many to come over the next year. He emphasized the importance of moving towards a neutral interest rate, projected to be close to 3%.
Bitcoin’s Potential for New Record Prices
Looking ahead, there is growing optimism that Bitcoin could reach new all-time highs in the fourth quarter of the year. Markus Thielen, founder of 10x Research, expressed in an interview with CoinDesk Markets Daily that the recent rate cuts could have a bullish effect on Bitcoin’s price this time around. Unlike in 2019, when rate cuts led to a decline in Bitcoin’s price, current economic conditions suggest that inflation may be cooling towards 2%, creating a more favorable environment for BTC.
- Historical trends show that the months between October and March are typically the strongest for Bitcoin, contributing significantly to annual gains.
- The FTX estate is expected to redistribute approximately $16 billion in assets to creditors in the coming months, with a portion of those funds likely being reinvested into cryptocurrency assets.
- Last week, the SEC approved the listing of options for BlackRock’s spot Bitcoin ETF (IBIT), marking a positive development that could lead to the introduction of more financial instruments related to the ETF. This, in turn, is expected to enhance institutional liquidity in the leading cryptocurrency.
While uncertainties loom regarding the upcoming U.S. presidential election in November, Thielen believes that the political landscape will not significantly impact Bitcoin’s trajectory. He argues that rising government spending and deficits are likely to benefit Bitcoin in the long run, highlighting its potential as a hedge against inflation and economic instability.
