Ether Skyrockets to a 7-Month Peak, Outperforming Bitcoin Amid BlackRock ETF Strategy; Altcoins Experience a Decline

Bitcoin reached a peak close to $38,000, marking an 18-month high, but then experienced a significant pullback.

Concurrently, ETH made a remarkable 10% jump, hovering around $2,100, following a Nasdaq filing that confirmed BlackRock’s intention to seek approval for an ETH-based exchange-traded fund. Meanwhile, BTC recently traded at $37,600, showing a 3% increase throughout the day. The larger cryptocurrency market experienced declines as the shift towards altcoins slowed after ETH and BTC’s strength.

Ether took the spotlight away from Bitcoin on Thursday as BlackRock, a major asset management firm, set the stage for introducing an Ethereum exchange-traded fund.

During the early U.S. morning hours, Ethereum surged past $2,000, up from below $1,900, following the revelation of a filing that unveiled the existence of a corporate entity called “iShares Ethereum Trust” registered in Delaware, a common legal home for U.S. businesses. This mirrored a similar occurrence in June when BlackRock’s iShares Bitcoin Trust was introduced – the Delaware corporate registration preceded the actual ETF application.

History repeated itself on Thursday last week. Shortly after the Delaware filing, a Nasdaq filing confirmed BlackRock’s intention to pursue an ETF focused on ether.

Bitcoin reached a new high, surging to nearly $38,000 from about $35,000 in response to the early morning BlackRock ETH news, causing a short squeeze. However, following this surge, BTC experienced a rapid reversal, dropping to around $36,300.

In contrast, ETH showed a notable 10% increase over the last 24 hours, while BTC saw a decline of 2% during the same period.

Altcoins Plunge

While Ethereum and Bitcoin demonstrated resilience, many alternative cryptocurrencies, known as altcoins, saw a retreat throughout the day. They scaled back their gains from previous days, with the apparent pause in capital rotation towards smaller tokens.

Ripple’s XRP, Dogecoin (DOGE), Uniswap (UNI), and Stellar’s XLM experienced declines of 6% to 7%, while toncoin (TON) retracted by 10% following its impressive 20% rally over the past week.

Interestingly, governance tokens associated with leading ETH liquid staking platforms bucked the trend. For instance, Lido’s (LDO) and RocketPool’s (RPL) tokens recorded increases of 18% and 23%, respectively.

The contrast between the two major cryptocurrencies and the rest of the market became evident in the performance of the CoinDesk Market Index (CMI) sectors. On the day, only the Smart Contract Platform sector, dominated by ETH, and the Currencies sector, led by BTC, managed to secure gains. In contrast, the remaining crypto sectors experienced significant declines.

Altcoins faced challenges, possibly influenced by an overall risk-averse atmosphere in traditional markets. Federal Reserve Chair Jerome Powell’s statement, which emphasised the central bank’s readiness to increase interest rates if necessary, dampened hopes for a more accommodative monetary policy.

This sentiment spilt over into U.S. equities, leading to a downturn that snapped their recent winning streak. Both the S&P 500 and Nasdaq indexes experienced declines of almost 1%.

The Significance of BlackRock ETH ETF Integration

According to market analysts, the approval of a spot Bitcoin ETF could draw in sophisticated investors who needed more support to enter the crypto market. Although various futures-based ETFs for Bitcoin and Ethereum are already available, they are considered subpar due to associated rollover costs.

Diogo Monica, the president and founder of Anchorage Digital, a federally chartered digital asset bank, expressed, “If the first step is a spot Bitcoin ETF, the logical next step would be a spot Ether ETF.”

Image Source: Adobe Stock

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.