Monday was another good day for altcoins generally as the crypto market traded higher. Congress may have given the industry some more validity late last week, and investors are pouring more money into tokens.
Avalanche (CRYPTO:AVAX) was up by as much as 12% in trading early Monday and topped out at about $99. Some of those gains faded — the tokens were selling for $90.22 at 3:20 p.m. EST — but that’s still well higher than $73 level that Avalanche was trading at on Saturday. Fantom (CRYPTO:FTM) was another big gainer, rising 8.7% in the last 24 hours and 18% since early Saturday.
Shiba Inu (CRYPTO:SHIB) was the outlier, falling 3.9% in the last 24 hours and 18% in the past week. This token has been volatile since reaching its all-time high, and it may be searching for a use case in the crypto space.
The biggest fundamental news of the day was that the Infrastructure Investment and Jobs Act’s expansion of the tax reporting rules for cryptocurrencies may require more companies to become brokers. This could include miners, which the industry fought, but it’s another sign that Washington wants to regulate and tax the cryptocurrency industry, not destroy it.
Another provision of the Act relates to the verification of the identities of people making transactions of $10,000 or more in tokens. This may seem like a small line item, but it’s the kind of banking regulation that could help reduce fraud in the cryptocurrency world and give the tokens more validity for use by institutions over the long term.
Besides the macro news, there were some positive announcements surrounding altcoins. Grayscale, which has cryptocurrency trusts, said it is considering adding Avalanche to its collection of digital asset products. This doesn’t mean Avalanche will end up in a Grayscale trust, but if it does, that could mean an influx of funds into the token.
The Avalanche Foundation also recently announced the $200 million Blizzard fund, which aims to grow the Avalanche ecosystem in decentralized finance, enterprise applications, NFTs, and culture applications. Funds like this hope to increase the adoption and number of use cases for cryptocurrencies, which is ultimately how they generate value.
Volatility is normal in the cryptocurrency space, but the fact that Congress is passing bills that entrench the industry rather than upend it should be good news for investors. And that cryptocurrencies like Avalanche are trying to develop more use cases is a good thing long term.
We will continue to see cryptocurrencies — and altcoins, in particular — swing wildly in value in the coming months and years. But I think we’re past the point of no return in terms of this becoming a big industry with disruptive use cases. That should be good for cryptocurrencies that can find an audience willing to build utility into their products.
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