Cryptocurrency: Bitcoin and Ethereum prices

Among the thousands of existing cryptocurrencies, the prices of Bitcoin and Ethereum dominate the market at this time.

Especially since the beginning of this year, it has been the price movements of BTC and ETH that have affected the crypto markets as a whole more than anything else.

After all, these two cryptocurrencies have a capitalization of more than 60% of the capitalization of the entire crypto market as a whole, and excluding stablecoins, this joint dominance reaches more than 70%. It is enough to consider that the third real cryptocurrency by market capitalization, BNB, capitalizes less than a tenth of BTC and less than a quarter of ETH.

Bitcoin’s price continues to lead Ethereum and other cryptocurrencies

Right now, Bitcoin’s price is around $29,000.

This is a lower price level than the 2023 annual high of more than $31,000 touched in mid-April, but it is not far off those highs.

Not least because these highs were only recorded at a certain time this year, namely around the time of Ethereum’s Shapella update, when it was thought that prices would fall and instead went up.

As it turns out, as of April 19, the price was a result of overly positive sentiment, so today’s $29,000 is actually a decidedly high level for 2023.

Although the current BTC price is 58% below the November 2021 all-time high, it must be said that the peak was touched thanks to the large speculative bubble that started to form in late 2020, so it is not a good benchmark.

It is better to take as reference points the value before the financial markets collapsed in March 2020 due to the start of the pandemic, and the pre-bubble value from October 2020. The former was around $10,000 and the latter around $12,000.

So the current value is almost three times that of February 2020, and almost two and a half times that of October 2020.

In addition, during 2020, Bitcoin’s price also fell below $16,000, which is still a value higher than the two benchmarks in 2020, but almost half of today’s value.

In fact, during 2023, the price of BTC has risen by around 74%, partly due to the recovery after the 2020 crash, and partly because it is largely following the movements of 2019.

Analysis of Ethereum’s Recent Performance

Something similar happens with Ethereum as well, although during 2023 ETH’s price rose “only” 57%.

This significant difference with Bitcoin seems to be mainly due to the fact that during 2022, ETH lost less than BTC.

In fact, last September saw the merger, which ended the Proof-of-Work era on Ethereum by starting the Proof-of-Stake era. This resulted in ETH losing less than BTC in the second half of the year.

While Bitcoin’s 2022 price low was reached in November, following the collapses in May and June, Ethereum stalled in June, as it recovered significantly more than BTC between August and September.

ETH’s current value is also below the 2023 annual peak of more than $2,100, and for the same reason as Bitcoin.

However, there is a decidedly interesting difference.

If Bitcoin’s price has now recovered almost all the losses accumulated after May 2022, i.e. after the bankruptcy of Celsius, Ethereum has not yet fully succeeded.

This makes it all the more likely that the reduced growth in the ETH price during 2023 is due to a minor recovery after a collapse of a slightly smaller scale in 2022.

Moreover, the current price of ETH is even lower than it was last August, precisely because it was overvalued then due to the anticipation of the merger.

The comparison with 2019

Bitcoin has a cycle of about 4 years due to halving.

There have been 3 halvings so far, and in each case a huge speculative bubble blew up the following year, which also affected the prices of other cryptocurrencies. All three bubbles burst, resulting in a bear market.

While 2023 is the year after the last major post-bubble bear market, 2019 was the analogue of the previous cycle, and was marked by three upswings, one through April, one in May and one in June.

The rise in the prices of Bitcoin and Ethereum in the first four months of 2023 is very similar to the first rise in 2019, so much so that it is speculated that there may be two more this year as well before the second half of the year starts.

If a similar scenario were to occur, i.e. similar to what happened in 2019, we can expect a first further increase in Bitcoin’s price to $35,000, followed by a second above $40,000.

However, there is no certainty that the similarities with 2019 will continue throughout 2023, but it is at least plausible that it is primarily Bitcoin’s price development that will affect other cryptocurrencies, although in April it was Ethereum that made the difference.

Nevertheless, it is possible that the first week of May can already provide clear answers to these hypotheses.