Cryptocurrencies: A World of Volatility

The world of cryptocurrencies is a complex and ever-changing landscape. In this article, we’ll delve into the world of Bitcoin, Ether, and XRP, exploring their differences and similarities.

What is a Cryptocurrency?

A cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. (Wikipedia)

Bitcoin: The Pioneer

Bitcoin was the world’s first cryptocurrency and decentralized digital currency. The first Bitcoin transaction occurred in early 2009, and it has since grown worldwide. Bitcoin’s price fell back below $70,000 this past week and is currently up ~52% year to date.

Bitcoin’s price chart

Ether: The New Kid on the Block

Ether is another cryptocurrency run on the Ethereum blockchain platform and has the second-largest market share, despite being the newest of the three discussed in this article with its launch in July 2015. Ether’s price tumbled this week, falling more than 8% to just under $3,500. ETH is currently up ~49% year to date.

Ether’s price chart

XRP: The Underdog

XRP, which is owned by Ripple and launched in 2012, was one of the larger cryptocurrencies for some time until new coins joined the market. We’ve included it in this article for reference. XRP is currently down ~17% year to date.

XRP’s price chart

Comparing Cryptocurrencies

An index has been created to chart these three cryptocurrencies together, considering their significantly different pricing histories. Ether tops the chart, i.e., the price of an ether has changed the most out of all three cryptocurrencies.

Cryptocurrency comparison chart

Find out what advisors think about crypto from a VettaFi webcast hosted in April with Invesco.

On January 10th, the SEC approved spot bitcoin ETFs from a range of issuers such as Grayscale Bitcoin Trust ETF (GBTC), iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), ARK 21Shares Bitcoin ETF (ARKB), Bitwise Bitcoin ETF (BITB). Here are some of the quick takeaways from the spot bitcoin ETF launch.

Other ETFs associated with cryptocurrencies include: ProShares Bitcoin Strategy ETF (BITO), ProShares Short Bitcoin Strategy ETF (BITI), VanEck Ethereum Strategy ETF (EFUT), and Bitwise Ethereum Strategy ETF (AETH).