Bitcoin is surprised by a sparkling crypto
Bitcoin rarely shares the stage in the cryptocurrency world.
The most popular of digital currencies is used to being alone in the photo finish and being celebrated by the fans.
This is the scenario that played out in recent weeks, especially with the decline above $30,000 per unit, a level not seen since last June.
But this rise has been overshadowed for 48 hours now by the performance of another cryptocurrency. It is Ether (ETH), the native token of the Ethereum blockchain, which is an ecosystem that hosts cryptocurrencies, non-fungible tokens (NFTs), and decentralized financial services apps. It is considered the second blockchain after Bitcoin, making ETH the second largest coin by market capitalization after BTC.
Ether prices have risen 9.6% to $2,114.25 in the past 24 hours according to data firm CoinGecko. This is the highest level since May last year. By comparison, Bitcoin rose just 2.3% to $30,827.10 in the same period. Year to date, ETH prices are up 77%.
Long awaited Shapella software update
The rise of Ether is due to the fact that the update of a long-awaited software did not provoke the fear that it aroused, according to the experts. In fact, this update known by insiders as Shanghai, or Shapella, allows investors to withdraw the Ether tokens they had pledged to help the Ethereum ecosystem in exchange for rewards. This process is called staking. Investors had feared that this possibility would lead to significant outflows. But instead of outflows, analysts say they have observed investors so far simply taking their rewards and abandoning their original stake, which has helped calm the entire crypto space.
“The successful activation of the Shapella hard fork sparked the rally,” said analysts at crypto firm FxPro Group.
According to crypto analytics firm Nansen, investors withdrew an average of 10,000 Ether per hour, which totals 66,815 Ethers worth $128 million. The withdrawals represent just 0.3% of the 18.1 million Ethers that were staked, Nansen estimates.
Noelle Acheson, economist and author of the newsletter “Crypto is Macro Now” believes that the increase in Ether prices is a combination of factors.
“It appears to be a bet on the overall liquidity outlook, but the relief that Shapella didn’t post a sharp drop is driving ETH’s outperformance this morning,” she told CNBC. “ETH is outperforming BTC here because it has quite a bit of catching up to do and traders, seeing that there was no negative reaction to the ‘upgrade’ now feel more confident about coming back.”
However, the prices of Ether, like Bitcoin, are still far from the peaks reached in November 2021. On November 10 of the same year, the price of ETH had risen to $4,878.26, an all-time high. On the same day, the price of BTC had reached the price of $69,044.77, an all-time high.
