After a rough few days, the cryptocurrency market is recovering on Tuesday. The stock market is up and growth stocks are popping, which often leads cryptocurrency valuations to rise as well. And altcoins were the leaders in the market.
Polygon (MATIC 0.91%) jumped as much as 16.4% in the last 24 hours and is up 15.4% over that time as of 3:20 p.m. ET. Near Protocol (NEAR 1.98%) jumped 18.8% and is currently up 18.5%. Elrond (EGLD 1.05%) jumped 8.9% and is now up 7.1%.
The crypto market overall was recovering on Tuesday but there was some specific news out about these cryptocurrencies. Elrond announced that it's buying Utrust, a cryptocurrency payments company. The idea of this acquisition would be to build a low-cost online payments network using cryptocurrency and the blockchain. This could work as a replacement for traditional payment networks, although there are likely many regulatory hurdles to get over before any widespread launch.
Polygon announced that it has launched its "Plonky2" technology and set new speed and scalability records for a Layer 2 Ethereum blockchain. The group claims it can now verify complex transactions like Ethereum smart contracts, which would absolutely be a breakthrough.
Near Protocol is a Layer 1 blockchain that aims to provide faster and lower cost transactions than Ethereum, just like Polygon. The cryptocurrency could simply be drafting on Polygon's gains and the overall move higher for cryptocurrencies.
I wouldn't read too much into today's move since the gains are so widespread. The market had sold off growth stocks and cryptocurrencies over the last few weeks and this is just a small recovery of some of those losses. For long-term holders, this is normal volatility we all need to get used to.
Long-term, I think today's news is actually very positive for the cryptocurrency economy. Disrupting traditional payment networks is a natural use for cryptocurrencies and Elrond is moving in that direction. It's not yet clear if it will be successful, but it's a positive strategic move.
I also think Polygon's improved speed and performance is bullish for the cryptocurrency. Ethereum's upgrade to proof-of-stake should make the Layer 1 blockchain faster, but this is a welcome improvement for a Layer 2 blockchain as well.
Overall, I would chalk today's move up to normal volatility for cryptocurrencies. They've been broadly following the market overall the last few weeks and that continues today. This is why we like to focus on the long term and utility being built and all of the cryptocurrencies I've mentioned are building that utility over time.
Editor's note: This article has been corrected. Near Protocol is a Layer 1 blockchain.