Bitcoin Is Down, but Ethereum and Other Cryptocurrencies Are Rising

Markets Motley Fool

Bitcoin (BTC), by far the most widely held and closely followed digital currency, or cryptocurrency, is down by more than 7% over the past day. However, most other cryptocurrencies are continuing their move upward. Here's a rundown of the latest price action in the major cryptocurrencies, as well as other top news from the industry.

Continue Reading Below

Today's cryptocurrency prices

Here's how the five largest cryptocurrencies by market capitalization stack up, and how much each has changed over the past day:

Cryptocurrency Name (Code)

Price in U.S. Dollars

Day's Change

Bitcoin (BTC)

$17,548

(7.2%)

Ethereum (ETH)

$823.00

4.9%

Bitcoin Cash (BCH)

$2,510

17.2%

Ripple (XRP)

$0.76

0.2%

Litecoin (LTC)

$356.25

(0.9%)

Bitcoin is falling while other cryptocurrencies continue to surge

As you can see, bitcoin has been falling today by quite a bit, which is the opposite of what most other major cryptocurrencies are doing.

Continue Reading Below

Many alternative cryptocurrencies, or "alt-coins," have surged in popularity recently. There are a few potential reasons for this, such as these other coins' relatively low price. If you're new to cryptocurrencies and have, say, $1,000 to invest, it can seem more attractive to buy more than 1,200 Ripple than less than 6% of one bitcoin.

Furthermore, some of these alt-coins solve major problems that people are having with bitcoin. For example, bitcoin transaction costs have gotten much higher, and transactions are taking hours to complete due to high network traffic. Conversely, both Ripple and Litecoin cost just pennies per transaction and can complete transactions in a small fraction of the time.

In fact, most people are surprised to learn that bitcoin makes up less than half of the cryptocurrency market. The value of all bitcoins currently in circulation is about $304.7 billion, while the entire cryptocurrency market is worth $624.1 billion.

Don't confuse speculating with investing

As a final thought, keep in mind that the daily performance doesn't tell the full story on cryptocurrency volatility. In fact, a day when bitcoin moves by only 3% in either direction is a relatively quiet day.

With that in mind, let's take a look at the performance of the largest cryptocurrencies over some longer time periods, and see how investors should interpret this information.

Cryptocurrency

1-Week Change

1-Month Change

6-Month Change

1-Year Change

Bitcoin (BTC)

3.9%

122%

569%

2044%

Ethereum (ETH)

37.1%

130%

128%

10,767%

Bitcoin Cash (BCH)

55.6%

110%

N/A

N/A

Ripple (XRP)

135%

228%

159%

133%

Litecoin (LTC)

(2.7%)

406%

656%

9,736%

As you can see, bitcoin is actually on the lower end, as far as cryptocurrency volatility goes. Ethereum has increased more than 100-fold over the past year, while Ripple has more than doubled within the past week alone.

Here are the key takeaways. First, it's important to realize that some of these performance figures are simply not sustainable. For example, if Ethereum were to rise another 10,767% over the next year, the digital currency would have a $8.9 trillion market cap. In other words, don't buy any digital currencies and expect the same performance going forward.

Most importantly, any asset that can double, triple, or more in such short periods of time is a speculative asset, not an investment. Put another way, if it can double in a week, it could also get cut in half in a week just as easily. Given cryptocurrencies' current volatility, they are far closer to lottery tickets than to stocks and bonds on the risk spectrum.

Bitcoin is overhyped: 10 better buys for you now
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and investing directly in Bitcoin was noticeably absent from their recommendations! That's right -- they think these 10 stocks are better buys.

Learn more

{% render_component 'sa-returns-as-of' type='rg'%}

The Motley Fool has a disclosure policy.