Ether continued to lead the rally in cryptocurrencies Friday, grabbing the limelight from Bitcoin as cryptocurrencies extend their rebound this year.
(Bloomberg) — Ether continued to lead the rally in cryptocurrencies Friday, grabbing the limelight from Bitcoin as cryptocurrencies extend their rebound this year.
The second-largest digital asset gained 2.8% Friday, as of 11:30 a.m. in New York, bringing its weekly gains to 11%. Meanwhile, Bitcoin drifted, bringing its weekly advance to 7%, as other crypto-related stocks also rallied.
Crypto investors had worried Ethereum’s so-called Shanghai, or Shapella, update might trigger a flood of Ether sales after its revamp this week enabled users to queue up to withdraw tokens they had pledged to help operate the network in exchange for rewards — a process known as staking. But so far withdrawals have been muted. About 874,926 of Ether coins are waiting for a full exit, a sliver of the more than 17 million Ether tokens locked up for staking, data from Nansen shows.
“There was some money on the sidelines to avoid the risk of a failed upgrade,” Leo Mizuhara, founder and CEO of decentralized-finance institutional asset management platform Hashnote, said. “I suspect those folks are coming back in now, thus pushing up 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 site 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 would still need to more than double in order to fully recovery from last year’s $1.5 trillion crash following a string of crypto blowups and scandals, including the bankruptcy of the FTX exchange.
Helping to propel cryptocurrencies higher this year, however, is expectations of an eventual easing in Federal Reserve monetary policy, which is driving speculative investments higher.
The latest data on U.S. producer prices were softer than expected, solidifying bets the peak in interest rates are near and cuts will soon follow, QCP Capital wrote. “This is supportive for risk assets, as seen by the rally in US equities also,” it said.
–With assistance from Vildana Hajric.
(Updates to include new prices, fresh quotes, and Ether exit data)
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