What happened
A "risk-on" trading day is taking place again on Wall Street and that's helping cryptocurrency values to start the week. It helps that the market was up early in trading today and cryptocurrencies usually magnify those gains. But as the market has fallen back to breakeven the gains for crypto are holding.
As of 12:40 p.m. ET, over the last 24 hours Bitcoin (BTC 5.24%) had jumped as much as 5.2%, Ethereum (ETH 3.73%) was up 4.2%, and XRP (XRP 3.31%) had gained 17.4%. Their values were up 5%, 4.1%, and 16.1% in the last day as of this writing.
Image source: Getty Images.
So what
XRP continues to trade higher on speculation that a lawsuit from the U.S. Securities and Exchange Commission would favor Ripple, the token's developer. Last week, documents in the case were unsealed and there's hope a verdict will be reached soon. The conclusion of the case is enough to send XRP's value higher lately.
In another sign that cryptocurrencies are gaining mainstream adoption, credit unions Unify and Idaho Central will allow their customers to buy, sell, and hold cryptocurrency, including Bitcoin.
Also announced this morning was a $450 million investment by Sequoia Capital India, Andreessen Horowitz, and Tiger Global in Polygon, a Layer 2 blockchain that serves as a support layer to Ethereum. Venture Capital has been flowing into cryptocurrency blockchains and what's known as Web 3.0 development, which involves building apps on top of the blockchain. This is the kind of investment that will build further advances like lower costs and improved functionality into the blockchain and in this case, Ethereum would be one of the beneficiaries because it's the Layer 1 to Polygon's Layer 2 solutions.
Now what
The market has been extremely volatile the last few months and right now momentum is on the side of cryptocurrency. Values are rising as the market slowly recovers and growth stocks bounce back. But more importantly the investments in cryptocurrency today will lead to further utility in the future.
Developers are introducing new innovations like low-cost payments, non-fungible tokens, and decentralized finance solutions. Polygon, for example, sees itself as a decentralized cloud service, providing an alternative to some of the products that are typically built by big tech companies.
While momentum is on the side of cryptocurrencies today, that momentum could fade eventually just based on market volatility. But investors should keep an eye on what's being built in the Web 3.0/cryptocurrency industry because that's where value will ultimately be derived. And it seems that utility is growing and traditional banking institutions are also taking crypto seriously, which is bullish for the industry long-term.
