Bitcoin Blisters Whilst Ethereum 2.0 Continues To Interest

It was another fruitful week for bitcoin (BITCOMP) as the bullish trend continued and we saw the price hit $11,284, almost a year-long high (the upper echelons of the $11,000s, which we last saw in August of 2019, were just out of reach). By contrast, global markets remained steady although the FTSE took a dip. With earnings season approaching a close, blockbuster numbers from Big Tech drove US markets. 

Alongside the weather, bitcoin is also blistering

So what was driving price last week? For me, the reason behind the positive price action on bitcoin was twofold. Firstly, American banks have for a long time not been allowed to hold crypto for clients. This could be set to change, as the Office for the Controller of the Currency, part of the US Treasury, issued an interpretive letter, expressing the need for banks to provide custody-related services to their clients. This change helped push bitcoin to the aforementioned highs. Clearly banks are cottoning on to the fact that crypto and blockchain are important technologies, as opposed to a tech fad. Dotcom bubble, this is not. 

Secondly, some of the altcoins, such as Elrond, which itself transitioned onto its mainnet and drastically reduced the token supply, have displayed excellent figures. According to CoinGecko, it is currently up 1,200% year to date. Bitcoin’s performance may have been driven by investors taking profits from some of the altcoins and repositioning their portfolios into bitcoin and Ethereum (seen as safer cryptoassets). 

The bottom of $10,000 that we are seeing is an important level too. I think that, even if we dip below the level, investors shouldn’t panic. It is only if we see levels such as $9,000 or $8,500 that we should begin to worry, although it has been many months since seeing these lows. 

Ethereum 2.0’s staking rewards excite

Another pleasing sight was the next step in Ethereum 2.0 taking place, with the testnet reportedly successful. My colleague Simon Peters has highlighted that the Ethereum (ETH-X) team has been struggling to keep up with their roadmap for the rollout of 2.0. However, the potential of these proof of stake coins is clearly interesting to investors, and this could be the reason for some of the positive price action we saw on Ethereum last week. To run a validator node, owners must have 32 ETH, and no doubt investors are topping up on the cryptoasset so that they can take advantage of the rewards as a validator once the mainnet is live. The team has already put together some clear and concise documentation on becoming a validator and how to run nodes, and the opportunity for investors is clear. 

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Currency Trader 2 months ago Member's comment

Good crypto roundup, thanks.