Ether’s Leap After Upgrade Pushes Bitcoin From Crypto Limelight
(Bloomberg) — Ether continued to lead the rally in cryptocurrencies on Friday, taking the spotlight from Bitcoin as cryptocurrencies extend their rally this year.
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The second-largest digital asset rose 2.8% on Friday, at 11:30 a.m. in New York, bringing its weekly gain to 11%. Meanwhile, Bitcoin rallied, bringing its weekly advance to 7%, as other crypto-related stocks also rose.
Crypto investors had worried Ethereum’s so-called Shanghai, or Shapella, update could trigger a flood of Ether sales after the renewal this week allowed users to queue up to withdraw tokens they had pledged to help power the network in exchange for rewards – a process known as staking. But so far withdrawals have been subdued. About 874,926 Ether coins are waiting for full output, part of the more than 17 million Ether tokens unlocked for staking, data from Nansen shows.
“There was some money on the sidelines to avoid the risk of a failed upgrade,” said Leo Mizuhara, founder and CEO of decentralized financial institution asset management platform Hashnote. “I suspect these folks are coming back now, thus increasing the ETH/BTC ratio.”
At the same time, QCP Capital, a Singapore-based crypto investment firm, noted that Ether’s “outsized move” in price came as nearly $50 million worth of trading positions were liquidated in the past 24 hours. That’s nearly double the liquidations in Bitcoin at around $20 million, according to data from the website Coinanalyze.
With the latest advance, Ether’s 72% year-to-date gains have nearly caught up with Bitcoin’s 83% rally since the start of the year. However, both will still need to more than double to fully recover from last year’s $1.5 trillion crash following a series of crypto breakouts and scandals, including the bankruptcy of the FTX exchange.
Helping to drive cryptocurrencies higher this year, however, are expectations of an eventual easing of the Federal Reserve’s monetary policy, driving speculative investments higher.
The latest data on US producer prices was softer than expected, solidifying bets that the peak in interest rates is near and cuts will soon follow, QCP Capital wrote. “This is supportive of risk assets, as also seen by the rally in US stocks,” it said.
–With the assistance of Vildana Hajric.
(Updates to include new prices, fresh offers and Ether output data)
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