Although there were a few exceptions, for the most part cryptocurrencies were trading well into positive territory on Tuesday. Various types of coins and tokens happily joined the rally, with meme token Shiba Inu (CRYPTO: SHIB) bouncing almost 9% higher as of late-afternoon trading, Bitcoin (CRYPTO: BTC) fork Bitcoin Cash (CRYPTO: BCH) enjoying a nearly 8% lift, and video streaming platform token Theta Network (CRYPTO: THETA) rising 14%.
This Theta is an alpha token
Of the three, only Theta Network had any market-shaking proprietary news pushing its value skyward. On Wednesday, in a post on Medium.com, its developer Theta Labs announced that its Theta EdgeCloud should launch on or around May 1. As its name implies, this is a decentralized cloud services platform; given how essential cloud computing has become in recent times, investors are excited by its potential.
Happily for Theta Labs, its announcement came at an opportune time for any coin or token, particularly if its name is Bitcoin. Investors continue to eagerly pour money into the hot crypto asset of the moment — the spot Bitcoin exchange-traded fund (ETF).
According to statistics compiled by U.K.-based crypto company CoinShares International, what it terms “digital asset investment products” saw inflows of just under $600 million last week alone. This marked the fourth week in a row more investment was plowed into such instruments than withdrawn from them. Zooming out to the start of the year until last Friday, inflows have grown to over $5.7 billion.
Investors obviously can’t get enough of spot Bitcoin ETFs; it seems their popularity is snowballing. That stands to reason, as they provide what amounts to direct exposure to Bitcoin without the hassle of having to manage a tricky set of digital tools and security protocols. Instead, the ETF is the entity having to cope with such requirements; all a customer has to do is buy their chosen ETF through a brokerage.
Rate cuts coming, although likely not right away
As The Great Spot Bitcoin ETF Gold Rush continues to attract prospectors, the macroeconomic backdrop remains favorable. There’s a growing possibility that the U.S. Federal Reserve won’t cut its key interest rate as soon or as aggressively as hoped by some, but those slices are almost certain to come — taking a medium- to long-term view of inflation, for the most part it’s easing. When it does to a meaningful degree, the Fed will get out its scissors.
Lower rates are a boon for cryptocurrencies, as they encourage investors to take a chance with assets seen to be relatively risky. Although they continue to be integrated into the traditional finance world, coins and tokens are still considered to fall into this category.
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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends Theta Token. The Motley Fool has a disclosure policy.
Why Altcoins Like Shiba Inu and Bitcoin Cash Triumphed on Tuesday was originally published by The Motley Fool