These three altcoin projects are vastly outperforming the market today, as investors increasingly pile into higher-risk crypto projects.
Crypto investors are certainly having a nice day, with the overall index surging 0.9% as of early afternoon trading. However, three of the top projects providing upside momentum for the cryptocurrency space today are high-tech crypto projects The Graph (GRT 9.54%), Immutable (IMX 8.55%), and Stacks (STX 9.21%) which are up 7.2%, 9.3%, and 7.9%, respectively, over the past 24 hours as of 2 p.m. ET.
The Graph’s status as a top protocol to allow for data querying on platforms like Ethereum and Immutable’s status as a top Layer-2 scaling solution for Ethereum position these projects well to benefit from surging demand seen in the Ethereum network. It’s clear that this project’s rally (and surging open interest, which hit a 20-month high) is having spillover effects for key related projects today.
Stacks benefits from broader Bitcoin adoption, enabling smart contracts and decentralized applications to use Bitcoin as an asset for settlement on Bitcoin’s blockchain. Thus, as Ethereum and Bitcoin go, so too do these projects (generally speaking).
Here’s more on what’s driving overall demand for these high-tech cryptos today.
Altcoins are seeing greater upside in this environment
What’s interesting when looking at projects like The Graph, Immutable, and Stacks relative to the core assets they support (namely, Bitcoin and Ethereum) is the growing divergence in terms of performance. I think this performance gap could be related to a number of key factors, from lower floats and greater leverage within the derivatives world to amplified upside potential derived from the success of these underlying networks.
Interest around projects that can enable or support the rise of on-chain artificial intelligence applications is surging, and each of these projects has some limited degree of exposure to this trend. Positive political commentary around crypto and AI overall have lifted a number of related assets in recent days, and I suspect that’s at least one of the positive drivers behind these three projects of late.
But overall, each of these altcoin projects benefits from rising adoption of the major networks, and can be viewed as leveraged plays on this trend. So, as long as investors more broadly believe that another leg of this bull market could be forthcoming, it’s entirely possible that The Graph, Immutable, and Stacks could have greater upside than their megacap peers.
Will this momentum continue?
I have to say, the reaction from both high-growth tech stocks and various cryptocurrencies following last week’s decision from the Federal Reserve to impose a larger-than-expected rate cut of 50 basis points (at least compared to what many in the media were expecting) has been interesting to watch. In the crypto world, many top altcoin projects are outperforming their larger-cap peers. Accordingly, I do think this is a trend that many in the crypto community will be watching closely, to see if it can continue.
I will say that the near-term setup for these three higher-growth crypto projects does look appealing, though the medium-term outlook for all three could be more uncertain. Market participants appear to be betting that a longer-term continuation of these bullish trends in the crypto space could be unraveling. If that’s the case, this recent move may be the start of another big move higher.
Chris MacDonald has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Immutable X, and The Graph. The Motley Fool has a disclosure policy.
