Much to the delight of traders, it has been a positive day of trade for the cryptocurrency market again.
With strong gains being seen across the board, the value of the entire market has surged almost 8% higher since this time yesterday to US$274.8 billion according to Coin Market Cap.
While the Bitcoin (BTC) price will take a lot of the headlines for its 4.8% gain over the last 24 hours, it is actually the laggard of the group.
No less than seven of the top ten cryptocurrencies have carved out double-digit gains during this time as traders fight to get hold of beaten down alt coins.
This has led to the Ripple (XRP) price rising 11.3%, Bitcoin Cash (BCH) climbing 10.8%, EOS (EOS) surging 14.3%, Litecoin (LTC) storming 11.6%, Cardano (ADA) pushing 15.7% higher, Stellar (XLM) jumping 11.6%, and IOTA (MIOTA) rocketing 12.4%.
The only coin in the top ten (and the top 40 for that matter) that isn’t in positive territory today is Tether (USDT). It has missed out on these sizeable gains and has edged lower.
Why are cryptocurrencies on fire today?
The gain appears to be related to the release of a research paper from the European Parliament which has given cryptocurrencies a surprise tick of approval.
The paper states that: “Virtual currencies are a contemporary form of private money. Thanks to their technological properties, their global transaction networks are relatively safe, transparent, and fast. This gives them good prospects for further development.”
Should you invest?
Things have certainly shifted positively for the crypto market this week. And the way things are going at the moment, I wouldn’t be surprised to see Bitcoin and its peers continue to race higher.
But as we have seen time and time again, these surges in crypto prices have been closely followed by even greater declines.
In light of this, I would caution against investors getting excited and putting their hard-earned money into cryptocurrencies at this point. The prudent thing to do in my opinion, is to sit on the sidelines and watch on from a safe distance.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.