Why Altcoins Like Toncoin and Pepe Stumbled This Week

Many crypto watchers expected this week to be a hot summer for coins and tokens. After all, the man who could be our next vice president is a well-known crypto advocate (and one-time venture capitalist), and a new financial instrument tied to a leading coin has just been launched.

But somehow the stars didn’t align and the altcoin market fell significantly. According to data compiled by S&P Global Market Intelligence, both utility and meme cryptocurrencies saw declines during this period. Toncoin (CRYPTO:TON), for example, is down almost 8% for the week, while Polkadot (CRYPTO:DOT) and Shiba Inu (CRYPTO:SHIB) weren’t doing much better with losses around 7%. Pepe (CRYPTO:PEPE) is down 6%.

Are crypto ally hopes waning?

This top cryptocurrency fan, needless to say, is J.D. Vance, who was recently nominated as the Republican vice presidential nominee. News of his rise to the party’s lower ranks has crypto enthusiasts excited; if Vance and running mate Donald Trump win, the crypto industry could have a pretty strong advocate firmly entrenched in the White House for a few critical years.

That excitement faded after Joe Biden announced he would not seek re-election. The void was filled with confidence by Vice President Kamala Harris, who at least initially appeared to be making a strong and well-considered bid for the top job. At the same time, doubts seemed to be growing about whether Vance was a candidate for the No. 2 spot. This understandably left crypto enthusiasts less enthusiastic about the upcoming election.

This should have been at least somewhat mitigated by the launch of Ethereum spot exchange-traded funds (ETFs). After all, when Bitcoin ETFs were launched at the beginning of the year, they sparked renewed interest in the leading cryptocurrency. That makes sense, since a spot crypto ETF is an elegant way for an investor to invest money without the hassle of owning the asset directly.

Of course, few expected such a happy parade of Ethereum ETFs. These instruments are no longer a novelty, and Ethereum does not have the fame and appeal of its bigger sibling. Still, like Bitcoin ETFs, the Ethereum variant provides a quick and easy entry into the market for coins. And Ethereum is a more versatile instrument than Bitcoin and has more potential in my opinion, so it is a bit surprising that new ETFs are not more of a hit.

Perhaps it’s due to “crypto ETF fatigue,” or perhaps many investors are only interested in such instruments if they have “Bitcoin” in the title.

The story continues

Signs of life at the end of the week

All that being said, as Friday afternoon approached, it looked like a bottom bounce rally was underway in Cryptoland. Bitcoin had picked itself up from the ground and numerous altcoins were also recovering (like Ethereum, which was up 3% earlier in the evening). Perhaps this is the start of a new bullish period as the market recovers from the Harris Effect and the dullness of the Ethereum ETF launch.

The coming week is shaping up to be an interesting one for the cryptocurrency market; watch this space for more.

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Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in Bitcoin and Ethereum and recommends them. The Motley Fool recommends TON. The Motley Fool has a disclosure policy.

The article Why Altcoins Like Toncoin and Pepe Stumbled This Week was originally published by The Motley Fool