Bitcoin
Here’s Why Nxt (NXT) Is Running And What Comes Next
One of the biggest end of the week movers in the cryptocurrency space this week is Nxt (NXT). This one is a pretty interesting one and it’s one that is well worth spending a bit of time discussing before trying to figure out why it’s moving and what comes next.
So, here goes.
The idea behind NXT, or at least, that is, the justification for its existence, is rooted in the deficiencies of what we might deem the first generation of cryptocurrencies – bitcoin, Litecoin etc. While these coins have expanded to become well-established in their own right, they each have drawbacks and – as adoption and mainstream use of these coins increases – the severity of these drawbacks will increase in tandem.
NXT Chart
The creators of NXT recognized this and set out to create what is essentially a brand-new type of cryptocurrency and, by proxy, one that seeks to resolve the issues associated with first-generation coins.
These issues are fairly wide-reaching but they can be lumped into one of two categories primarily: the first, scalability, the second, efficiency.
When we say scalability, we are referring to the speed with which transactions can take place and the number of transactions that can take place on a network at any given time. With bitcoin, the requirement for what’s called Proof of Work (PoW) verification limits the speed with which certain transactions can take place and, at the same time, limits transaction volume. If bitcoin is to be used as a store of value, it’s not necessarily that important for it to have ultra-fast transaction speeds and very high volume. If it is going to be used as a value transfer agent, however, these things are necessary.
When we say efficiency, we are referring to the processes required to verify transactions. Right now, a huge amount of electricity is required to maintain and keep up the bitcoin network and, as transaction volume increases, so will the energy requirement.
This, of course, has the potential to cause long-term problems, and – at the same time – brings with it what amounts to a constant downside pressure on the price of bitcoin given that the vast majority of the energy being used to mine coins is paid for in fiat, meaning bitcoin has to be sold to cover its own costs.
So where does NXT come into this?
Well, NXT uses what’s called a Proof of Stake (PoS) algorithm to process transactions, as compared to bitcoin’s PoW. PoS doesn’t require mining, immediately solving the efficiency issue. PoS can also handle a dramatically increased amount of transactions per second, with this increased volume once again based on the fact that mining-based block verification isn’t necessary.
So with all that explained, why is NXT running right now?
The coin is up 25% over the last twenty-four hours and close to 1,300% over the last four weeks.
In our opinion, the real driver behind this run is the fact that – as bitcoin becomes more popular – it’s drawbacks are going to become more apparent. We saw this yesterday with the more than 200,000 transactions stacked up and delayed as participants rushed into take advantage of the gains we were seeing in the market overnight.
With this in mind, then, and assuming the current correction in the bitcoin market is exactly that – a short-term correction – the run we are seeing right now should continue into the close of 2017. Just as is the case with bitcoin, we may see near-term corrections as the shorter-term operators pull profits off the table but, longer-term, it looks as though this one has plenty of steam left.
We will be updating our subscribers as soon as we know more. For the latest on NXT, sign up below!
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of NXT
Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.
Fundamentals
Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.
Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.
Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.
Last week on Thursday, cryptocurrency experts took notice of…
Bitcoin price edged lower on Thursday despite optimism in wider markets on the back of the Fed’s interest rate decision. The flagship cryptocurrency has been consolidating above the critical level of $42,000 after briefly topping $44,000, its highest level in 20 months. Bitcoin was trading 0.71% lower at $42,569 at press time. BTC’s total market cap has increased by more than 3% over the last day to $832 billion, while the total volume of the asset traded over the same period jumped by 22%.
Economic Outlook
Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.
The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.
Additionally, the central bank indicated that three rate…
Bitcoin price has been hovering above the $43,000 psychological level over the past two days amid anticipation about the potential approval of a spot bitcoin ETF. The flagship cryptocurrency has climbed more than 16% in the past week and nearly 170% in the year to date. Bitcoin’s total market cap has increased by nearly 5% over the past 24 hours to $858.9 billion, while the total volume of the token traded rose by 43%. The Bitcoin price was trading at $43,914 at press time.
Fundamentals
Bitcoin price has posted significant gains over the past few days, climbing to its highest level since April 2022, before the crash of a stablecoin that started a litany of company failures, pummeling crypto prices. The world’s largest cryptocurrency briefly topped the crucial level of $44,000 on Wednesday amid rising momentum despite being massively overbought.
According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.
Investors have already started providing capital as seed money for ETF products. Notably, a recent report by CoinDesk showed that the world’s largest fund manager, BlackRock, received $100,000 in capital from a seed investor for its spot bitcoin exchange-traded fund…
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