Is Bitcoin responsible for the increasingly animated Ethereum price? A lot indicates that yes, the activity with BTC is rubbing off positively on Ethereum as well.
The world’s largest cryptocurrency (BTC) and the runner up (ETH) have had somewhat of a correlating history. When Bitcoin was breaking the $19,000 mark in the 2017-2018 period, Ethereum was sniffing the $1,800 mark. Bitcoin’s fall from grace also saw Ethereum drop off significantly in moves that stunned and dispersed a lot of traders.
Cryptos going off!
Ethereum’s sudden price rally could be explained by BTC’s sudden rally towards key 2017 highs. BTC is up 160% this year with and is currently trading at around $18,560 a coin which is just a few pips from achieving three-year highs. As the price of BTC continues to go through resistance levels, institutional investors seem to be increasingly pouring into the market. Crypto fund Grayscale Investment’s managing director Michael Sonnenshein said in an interview that he beloved BTC was the next step in the evolution of money. This assertion suggests that people are trying to get onto the new money train as soon as possible.
Benefitting from increased online presence
Another crypto player this time, senior researcher Bernard Meyer of CyberNews.com attributed BTC’s rise in popularity to COVID-19. According to him, quarantine is forcing more and more people to do stuff online. An increased online presence has led to more people gaining interest in cryptocurrencies and that could have just led to more people converting. He added that a lot of individual investors are probably buying without an understanding of the technology.
“Because it’s all so technical, they’re probably investing in these cryptocurrencies without really being certain of what they’re doing which can lead to a lot of mistakes and money lost.”
He also raise an alarm on the possibility of a rise in crypto scams as prices continue to rally. According to Meyer, would-be ETH buyers need to familiarize themselves the token’s smart contract, which is an account that allows them to transact across the network. He did also call for caution while exploring smart contracts.
“If they’re on Ethereum, they’ll be using what’s known as a smart contract to sort of automate the process of sending and receiving payments for users. But these smart contracts can have some big security holes in them.”
He advised would-be investors to ensure that smart contracts had been verified before using them for their safety. Time will tell if what is going on with the crypto rallies has more to do with exuberant buying or a genuine shift towards the crypto markets.
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