Bitcoin price rises. Crypto traders see Ether as the real star.
Bitcoin
and other cryptocurrencies continued their march higher on Wednesday, but traders were particularly focused on
Ether
—the second largest crypto ahead of an upcoming update to the blockchain network that could be disruptive to the markets.
The price of Bitcoin has risen 1% in the past 24 hours to around $28,550, staying near the highest levels since last summer, but below the peak near $29,500 reached briefly last week. The biggest digital asset has risen more than 70% so far this year in a surge that has spurred a new bull market, although recent days have been met with stagnant prices and volatile trading.
“We continue to see choppy trading in Bitcoin, but most importantly, the pullbacks have been small and short, which can reassure the crypto crowd that there is more to come,” said Craig Erlam, analyst at broker Oanda.
It is still likely that Bitcoin will continue to trade in tandem with, and move along with, stocks
Dow Jones Industrial Average
and
S&P 500
as traders change expectations about the future of the Federal Reserve’s monetary policy. The Fed has raised interest rates dramatically to curb decades of high inflation – a campaign that has weighed on sentiment for riskier assets – and the 2023 gains for crypto have come amid forecasts that the central bank will become more accommodative.
Meanwhile, crypto traders are shifting their attention to
Ether,
the token underlying the Ethereum blockchain network. Ethereum’s “Shanghai Hard Fork” is expected to happen in the next week or so, marking the last major upgrade to the ecosystem since the transformation of the blockchain known as “Merge”, which happened last year.
Ether prices have risen 3% in the past 24 hours to over $1,900, the highest levels since last summer, with the second largest crypto outperforming Bitcoin in the past week.
“There was a remarkable movement in the altcoin sphere on Tuesday. The price of Ether topped its previous 2023 high on Tuesday and regained $1,900,” said Yuya Hasegawa, analyst at crypto switch Bitbank. “Ether’s rally could trigger further circulation of funds among the crypto market – often called ‘altcoin season’ – and strengthen the price of major tokens, including Bitcoin.”
The Shanghai upgrade will allow traders who have “staked” their Ether – locking it up and earning interest – to withdraw. This could lead to selling pressure as some investors exit their positions, but the upgrade, which will make betting easier, is also expected to make trading more popular, which could support prices.
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“What happens to Ether’s short-term price is subject to great speculation ahead of the ‘Shanghai’ upgrade.” Longtime Ether validators will remain loyal, while there are many investors who bought high and are deep underwater on their Ether purchases, so they will not sell,” said Antoni Trenchev, co-founder and managing partner at cryptolender Nexo.
“There will be volatility, but the conclusion of the ‘Shanghai’ upgrade is definitely a boost for Ethereum, its ecosystem and investors,” Trenchev said.
Among altcoins, or smaller cryptos,
Cardano
rose 1% and
Polygon
went 2% higher. Memecoins were weaker, med
Dogecoin
down 3% to pair gains after a recent Elon Musk-inspired peak with
Shiba Inu
reduction 1%.
Write to Jack Denton at [email protected]
