The cryptocurrency market experienced a remarkable surge on Wednesday, with total market capitalization climbing to $3.5 trillion, marking a $152 billion increase—its largest one-day gain in 35 days since December 11. Bitcoin (BTC) led the charge, reaching a high of $100,600, up by 3.3% for the day, as investor sentiment strengthened following VanEck’s ETF filing, which has injected fresh optimism into the space.
However, while Bitcoin’s gains were impressive, its performance trailed the broader crypto market’s 5% increase, suggesting a shift toward altcoins, which have captured investor interest. Despite the bullish outlook, risks remain for BTC as on-chain transactions dropped 37% from last week’s peak, and Bitcoin ETFs saw over $209 million in outflows, signaling potential headwinds.
Altcoins Surge, Stellar (XLM) Mirrors XRP’s Momentum
The altcoin market, on the other hand, outperformed Bitcoin with an 8.61% rise on Wednesday, led by notable gains from Stellar (XLM) and Ripple (XRP). XLM, gaining 14%, and XRP, up 12%, benefitted from their shared co-founder, Jed McCaleb, and their mutual goal of revolutionizing cross-border payments through decentralized networks. This close correlation has made Stellar’s price movements closely mirror those of Ripple.
The renewed optimism surrounding Trump’s potential crypto policy shift has fueled speculation in both XLM and XRP, with analysts forecasting further upside. XLM’s price could target $0.60, while XRP may soon retest $3, provided the momentum holds.
Solana and Polygon Show Strength as Layer-2 Solutions Gain Traction
Solana (SOL) also impressed, posting a 9% gain on Thursday to reach $205, driven by strong on-chain activity and an influx of AI-based projects. Meanwhile, Polygon (MATIC) continued to capitalize on the growing demand for Layer-2 solutions, climbing 5% to $0.48. As Ethereum gas fees soar, Layer-2 networks like Polygon are becoming increasingly essential, offering scalability and lower transaction costs. MATIC could soon challenge the $0.50 mark, further fueled by these growing fundamentals.
Layer-2 Networks Emerge as a Key Sector Amid Increased Market Activity
Layer-2 protocols emerged as the standout sector, benefitting from the surge in market activity and congestion on Layer-1 networks like Ethereum. Data from CoinGecko revealed that Layer-2 market capitalization rose by 4.1%, reaching $29.1 billion, with $2.7 billion in trading volume in just 24 hours. Mode saw a significant 10.1% increase, driven by developer adoption, while Arbitrum and Optimism gained 5.6% and 4.8%, respectively, thanks to greater integration into decentralized finance (DeFi).
The Layer-2 ecosystem’s resilience, especially during periods of high congestion, signals a bright future. As Ethereum’s gas fees remain elevated, these protocols offer efficient and cost-effective alternatives for traders and institutions seeking to capitalize on the increased market activity.
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