Alternatives to Bitcoin and Ether are the most popular crypto coins.

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This month, Cardano doubled in value, becoming the third-largest digital asset. Binance Coin is also up and running. In August, the value of a token called Avalanche tripled. Meanwhile, prices for digital images of rocks with laser eyes and cartoon renderings of beautiful animals are skyrocketing, sometimes quadrupling within days.

There is little agreement among analysts and investors as to what is fueling sections of the frenzy. Some speculate that after big runs, speculators are shifting away from the stalwarts and into fresh, more intriguing offshoots. Others picture a world saturated in cash and ultra-low rates, pushing investors toward increasingly bizarre products. A few tokens, like as the Cardano and Solana networks’ technological advancements, are underpinned by compelling storylines.

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Yoni Assia, the founder and CEO of online exchange eToro, stated, “There’s no doubt that there’s a lot of interest around crypto.” “You can absolutely see that in the numbers in the business, whether you’re looking at total volumes or company growth,” he said, adding that “the market has seen a lot of exuberance.”

Assia refers to it as a “generational buying moment,” citing a combination of factors such as historically low loan rates and significant fiscal stimulus programmes that provided checks to many individuals throughout the pandemic.

Some of the cash has been invested in cryptocurrencies and similar assets, such as digital mining stocks. According to a study of more than 1,000 U.S. adults conducted by The Harris Poll for Yahoo Finance, around 15% of Americans who received the first two stimulus checks invested part or all of the money, and about half of this group expressly invested in cryptocurrencies.

At the same time, as economies recover, inflation has emerged, feeding into predictions of impending hyperinflation from certain crypto believers. When you add it all together, Assia says it’s “causing a lot of individuals to search for various forms of investments.”

According to a recent eToro survey, almost a quarter of the 6,000 investors polled possess crypto, a figure that rises to nearly 50% for the younger generation. The firm also discovered that the average investor plans to expand their cryptocurrency holdings in the coming months, and that interest in alternatives to Bitcoin and Ether, known as altcoins, is “significant.”

Meanwhile, crypto trading app downloads are on the rise — According to App Annie, a mobile data and analytics firm, Coinbase Global Inc. placed 11th among banking apps in Apple’s iPhone downloads. Last August, it ranked 23rd in its category on average. Kraken, Voyager, and Crypto.com, three digital exchanges, have also risen up the ranks.

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“With all of this money swimming around, it’s no surprise that people are paying outrageous prices for digital pet rocks and a limitless number of other digital commodities that can be quickly created,” said Michael O’Rourke, JonesTrading’s chief market strategist.

Younger generations are in charge, he claims, and all they know is a Federal Reserve that is virtually always accommodating. When you combine it with a gridlocked government, it’s no surprise that many people are drawn to the crypto realm, he says.

Assets under management for digital-asset investment products have increased by more than 57 percent to $55 billion since July. According to data tracker CryptoCompare, average daily aggregate trade volumes climbed by more than 46% to $544 million, the largest month-over-month gain since May.

Altcoins like Cardano, Avalanche, and the meme currency Dogecoin have gotten a lot of attention. Meanwhile, the Bloomberg Galaxy DeFi Index, which tracks some of the major decentralised finance protocols and apps, is up roughly 50% since the beginning of July.

“There has been generally optimistic crypto mood recently: NFTs have helped lead the comeback, and the May meltdown is now further in the rearview mirror,” said Sam Bankman-Fried, CEO of crypto exchange FTX.

Then there are the blockchains that are vying for Ethereum’s attention. Speculators are turning their attention to competing blockchains and their tokens now that Ethereum’s latest network update is complete, according to Avi Felman, co-portfolio manager at BlockTower Capital.

Meanwhile, the stock markets in the United States appear to be setting new highs on a daily basis. Meme stocks are also exploding. When the market is in such a risk-on mentality, according to Jason Urban, co-head of Galaxy Digital Trading, crypto can only profit.

According to Wei Liang of DBS in Singapore, correlations between Bitcoin and daily returns for the S&P 500 were generally minimal in the four years ending in 2019. But that began to alter last year. Bitcoin and U.S. stocks have both dipped and returned in tandem during the pandemic, he said.

“Recently, you have people worrying about inflation and the money supply — because of this, people have always recommended buy equities as a hedge against inflation,” Urban explained. It’s also crypto now, he added.

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