Today's Top 3 Crypto Gainers: Zilliqa, Anchor Protocol, and Loopring Soar on Fed News
- Zilliqa, Anchor Protocol, and Loopring all increased by more than 10%, though there's no major news driving their gains.
- The Federal Reserve's 0.50% rate hike had already been priced in, and was not as bad as people feared it might be.
The Fed's rate rise was not as bad as some feared, pushing prices upward.
The Federal Reserve announced a large rate hike yesterday. A hawkish Fed makes people more cautious about high-risk investments like crypto, and so far this year, economic tightening on the part of the Fed has driven crypto prices downward.
Somewhat surprisingly then, Bitcoin (BTC) increased 6% immediately following the news of a 0.50% rate hike. Other cryptos followed suit. This is the largest increase since 2000. But it didn't cause prices to plummet as apparently the news had already been priced in. Federal Reserve Chair Jerome Powell had telegraphed the move beforehand.
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In fact, prices had trended downward for much of the preceding week on fears of an even bigger rate hike. There's also concern that drastic action to curb inflation could trigger a recession. These fears are still very real, but Powell was able to give some reassurance. He was cautiously optimistic about the possibility of a soft landing -- a way to cut sky-high inflation without dire economic consequences.
Broadly speaking, most cryptocurrencies were in the green this morning. However, some stood out with gains of over 10% in the past 24 hours. Let's dive in and learn more about today's biggest gainers.
1. Zilliqa (ZIL) -- up 21%
Zilliqa is a smart contract crypto that's outperformed much of the market this year, mostly on news of its metaverse launch. ZIL gained around 400% in March, though the price dropped again in April. This week it's started to rally again, gaining 20% in the past 24 hours and over 40% since May 3.
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According to LunarCrush, which tracks activity on social media and other networks, there's been a surge of social media interest. Zilliqa currently tops the rankings in terms of combined social and market activity. There's no major news from the Zilliqa team beyond a monthly update reminding investors of its recent successes. Its metaverse, Metropolis, is starting to gain traction and Zilliqa has recently joined the Blockchain Game Alliance.
Zilliqa is available from some top U.S. crypto exchanges, including Binance.US and Crypto.com.
2. Anchor Protocol (ANC) -- up 17%
Anchor Protocol is a decentralized finance app that's built on the Terra (LUNA) network. It attracted a lot of attention with a promise of extremely high interest rates -- Anchor was paying almost 20% APY on certain stablecoin deposits. As of May 1, that rate will be 18%. Its new dynamic system means rates could change by up to 1.5% each month.
Concern over the new rates is one reason Anchor's ANC token has struggled this month. Even a 17% price gain today doesn't take it close to its March peak. However, according to DeFi Llama, Anchor is one of the few DeFi platforms to increase the amount of money locked on its platform this month, known as total value locked (TVL). With almost $17 billion, Anchor is the third-biggest platform in terms of TVL.
ANC is not available on many top U.S cryptocurrency exchanges.
3. Loopring (LRC) -- up 14%
Loopring is a layer 2 blockchain, which means it sits on top of another blockchain such as Ethereum (ETH) to improve its performance. It boasts that it allows scalable, low-cost trading and payment on Ethereum. After Ethereum's insane spike in gas fees over the weekend, the need for projects that can reduce transaction costs has never been clearer.
That said, there's no obvious reason why Loopring is outperforming other top cryptos today. It could be because it announced it's on a hiring spree. The crypto is looking for seven full-time employees to take it to the "next step."
Loopring is available on top U.S. exchanges such as Coinbase, Gemini, Binance.US, Kraken, and more.
As today's top gainers show, there isn't always an obvious reason for a price gain. Volatility is part and parcel of crypto investing and individual projects can gain or lose 10% or more for no apparent reason. Sometimes, it's a deal, partnership, or technical development that drives price action. But sometimes it's sparked by speculation or a rumor, and it can be hard to untangle exactly why a price is rising.
This unpredictability is one reason it's important to only invest money you can afford to lose, and to invest for the long term. That way, these types of daily price changes are less likely to impact you. Choosing projects with solid fundamentals that you believe will perform well over time can insulate you from any short-term price fluctuations, good or bad.
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Emma Newbery owns Bitcoin and Ethereum. The Motley Fool owns shares of and recommends Bitcoin.
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