Altcoins Are Experiencing Divergence in Network Growth
The on-chain analytics firm Santiment has revealed that altcoins are showing a recent divergence in network growth. Following the news of the Bitcoin spot ETF, altcoins have started to separate from each other. The indicator being monitored is the “network growth,” which tracks the number of new addresses joining a cryptocurrency’s network.
New addresses are defined as those coming online on the blockchain for the first time and making their initial transaction. These addresses can appear for various reasons, such as users wanting to maintain their privacy during trades.
While some new addresses may not be relevant for the overall network, adoption plays a significant role in driving network growth. As new users join a blockchain, they create fresh addresses, thus increasing the network growth indicator.
Polarization in Altcoin Network Growth
Santiment has shared a chart that illustrates the trend in network growth for six different altcoins. Ethereum (ETH), Ethereum Name Service (ENS), and Threshold (T) have experienced significant increases in their respective network growths recently.
However, this divergence is limited to the growth of the indicator and not its pure value. Ethereum has a much larger market cap than ENS and T, resulting in a higher number of new addresses on its network compared to the smaller altcoins.
On the other hand, ApeCoin (APE), Basic Attention Token (BAT), and Enjin Coin (ENJ) have seen declines in their network growths. This polarization among altcoins has been forming for some time but has intensified after the approval of Bitcoin spot ETFs.
Long-Term Growth Potential
Santiment suggests that altcoins with higher adoption rates are better positioned for long-term growth. However, whether they will fulfill this potential remains to be seen.
Ethereum Price Performance
While Bitcoin has faced challenges recently, Ethereum has managed to perform well, breaking above the $2,500 level.
Bitro Conwell stands as an intellectual architect, weaving together the roles of crypto analyst, meticulous researcher, and editorial virtuoso with finesse. Amidst the digital intricacies of cryptocurrencies, Bitro’s insights resonate harmoniously with seekers of all stripes, showcasing a profound understanding. His ability to untangle the most complex threads within the crypto landscape seamlessly pairs his their editorial finesse, transforming intricacy into an artful tapestry of comprehension.