Altcoins were having a great day on Wednesday, recovering from a rough couple of months. The broader crypto market is up almost across the board and that's a tide lifting all boats.
Some of the biggest moves came from some fairly small market cap cryptocurrencies. Fantom (FTM -5.65%) was up as much as 18.7% in the last 24 hours and is up 14.7% at 3 p.m. ET. Harmony (ONE -4.04%) popped 12.7% and is currently up 11.4%, Kadena (KDA 0.87%) was up 10.7% and is now 5.9% higher, while Gala (GALA -4.31%) is up 9.9% after climbing as much as 9.9%.
There are a number of macro factors impacting the industry today. One is that Federal Reserve Chair Jerome Powell's testimony before Congress yesterday seemed to ease investors' concerns that the central bank will raise rates quickly in 2022, hurting the economy. Powell said the Fed wants to make sure inflation doesn't become entrenched, but also wants to keep the economy and employment growing.
Crypto markets are also recovering from a rough couple of months that have sent some values down 30% or more. In the case of altcoins, values have fallen even more than larger cryptocurrencies.
A trend of people moving out of the crypto market in the first week of 2022, which resulted in hundreds of millions of dollars of trades being liquidated, appears to be reversing. Values are climbing and the momentum is now in a positive direction for both the stock market and crypto values. In reality, momentum and market sentiment are what drive crypto prices short term, and that's what we're seeing today.
What all of these cryptocurrencies have in common is the desire to build real utility in the cryptocurrency market. Long term, that's what's going to drive their value, not day-to-day trading. The challenge for investors is that it will take years for these cryptocurrencies to build products that will disrupt traditional markets, and that leaves us with speculation today.
I think the best strategy in cryptocurrency is to avoid the daily noise in the market and focus on what's being built by developers. That requires more work, but ultimately that's where value will be unlocked.
I'm not worried about today's rise in the altcoin market and haven't lost sleep over the last few months of losses either. Cryptocurrency is a long-term disruption to traditional markets, and all of these coins are well-positioned for growth as a result.