The price of Ethereum has risen over 210% since the year began. But in the first two weeks of October, Ethereum’s price rose 15% while bitcoin’s price rose by 30%, causing investors and traders to worry whether the number one Altcoin was falling off the mark. While Bitcoin’s price rose significantly in the first 12 days of October, which has been called Uptober, Ethereum’s price didn’t rise as much, only hitting an all-time-high on the 29th of October, 2021.
However, if we compare Ethereum’s price to Bitcoin’s, the two-month stat shows that the eth/btc price fell, reaching as low as 0.060215 Bitcoin.
Before delving into the fundamental analysis of why eth/btc price fell, we need to first understand what eth/btc price is.
The eth/btc price is the price that BTC will buy for one Ethereum on exchanges such as Redot.com.
So, for example, if the price of Ethereum is $10,000, and the price of bitcoin is $100,000, the eth/btc price will be $10,000/$100,000, that is 0.1BTC. This means that with 0.1BTC, one can buy 1 Ethereum.
Now, the eth/btc price during the first few days in October was worrying for investors because long-term technical analysis showed that this was the first time in years that eth/btc price was low.
The 200-day moving average is a trend line traders use to determine the long-term trend of assets on the financial market,
So, using that technical analytic tool, we notice that eth/btc price fell below the long-term trend line, worrying investors and traders about where Ethereum’s price will head in the nearest future.
When long-term trend lines overlap, whether it is a bull or bearish crossover, it is a worrying sign that the price of the digital currency will either increase in price or reduce.
For an altcoin with $250 billion as its market capitalization, its comparison against the number one cryptocurrency is important in informing traders where the next swing will be, and what decisions they should make.
You might be wondering why Bitcoin performed so well, better than Ethereum.
While there is a plethora of reasons for this, one factor that cryptocurrency analysts recognized as the cause of bitcoin’s price bullishness is the bitcoin ETF.
Bitcoin Exchange Traded Fund was rumoured by top analysts and some officials at the Security and Exchange Commission (SEC) to be in the works. After more than eight years of cryptocurrency enthusiasts pushing for a bitcoin Exchange Traded Fund, there were rumours that bitcoin ETF would finally be a reality.
And trust the cryptocurrency market to act on this type of good news.
Bitcoin dominance index, a chart that shows bitcoin’s market share against other altcoins such as ethereum, showed that bitcoin’s capitalization rose by 42.39% while Ethereum’s slumped from 18.15% to 17.57% as of October 12, 2021.
However, the price of bitcoin rose to $4,400 on October 29th, 2021, causing its dominance to rise and its market cap to increase.
Rumours said that the SEC would soon approve four ETFs: Global X bitcoin Trust, Valkyrie XBTO bitcoin Futures fund, Kryptoin bitcoin ETF, and WisdomTree Bitcoin Trust.
Why is it that, eight years after rejecting bitcoin Exchange Traded Funds, the SEC has decided to allow it to fly? What changed at the SEC?
Why is there optimism that, after eight years of rejection of a bitcoin ETF from the Securities and Exchange Commission, that bitcoin ETF will come to fruition?
The reason for this new optimism is, according to the Chair of Securities and Exchange Commission Gary Gensler, the method through which these companies have applied for the SEC to approve their proposal. They submitted their proposal to establish a bitcoin Exchange Traded Fund under the Investment Company Act of 1940.
Well, what is so special about the act?
Franklin D. Roosevelt signed the act into law in 1940. The act gives the Securities and Exchange Commission the power to regulate investment trusts.
Sounds too technical?
I’ll break it down.
What the act does is that the Securities and Exchange Commission (SEC) can now look over the shoulders of individuals and companies that provide financial and investment advice to people, ensuring there is fairness and some level of security for investors.
Creating the Bitcoin ETF under the investment company act of 1940 means that these companies are subjecting their financial books and procedures to the SEC’s regulations and scrutiny, a move that most cryptocurrency enthusiasts have frowned against.
However, the difference between a bitcoin ETF and investing directly in bitcoin is that the share, although tied to the price of bitcoin, will be traded on the stock exchange.
With bitcoin ETF in the works, more institutions can get involved in cryptocurrency, thereby increasing its adoption and acceptance worldwide.
Companies such as Invesco Alerian Galaxy Crypto economy ETF (SATO) have started paving the way, albeit indirectly, for BITCOIN ETFs. Invesco Alerian Galaxy Crypto economy ETF (SATO) is engaging in “light” bitcoin ETF trading.
Light Bitcoin ETF trading is when companies invest in crypto-related companies and not cryptocurrency itself. With this method, the companies are shielding themselves, somewhat, from the volatility of the cryptocurrency market.
Good news for cryptocurrency enthusiast is that the Securities and Exchange Commissions also approved another crypto ETF, one that allows the company to invest in companies that derive the majority of their earnings from either mining bitcoin, lending it or exchanging it, something similar to what Redot crypto exchange does.
The SEC approving the creation of bitcoin ETFs is causing so much excitement in the cryptocurrency space, and is increasing traders and investors’ appetite to buy and sell bitcoin.
Why won’t it. The cryptocurrency space thrives on positive news such as this because it further advances the adoption of cryptocurrency.
It is important to note that the crazy numbers that shitcoins such as Shiba and DOGE are posting is encouraging to traders, investors and most importantly naysayers. There is increased optimism in cryptocurrency and bitcoin, as witnessed with the number of times people searched for SHIBA on google.
The bullishness of the market, ranging from bitcoin to altcoin such as Ethereum and Solana, spells good times ahead for cryptocurrency traders and investors.
Aside from the United States of America’s SEC close to approving bitcoin ETFs, the Australian government has approved bitcoin ETF in Australia.
The future looks exciting for cryptocurrency traders, investors and newbies. And for those who are still contemplating entering into the trillion dollar industry, recent activities means more opportunities to invest and profit from the space.
And with Facebook changing their name to META, and the rumors that Mark Zuckerberg is diving headfirst into NFTs and cryptocurrency, the adoption level is sure to go over the roof any time soon. And with mass adoption comes bullishness in the market.
There are certainly good times ahead for the more than $2.7 trillion industry.
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