Ether surpasses Bitcoin on London Hard Fork

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Ether, the second largest cryptocurrency by market cap, was in the spotlight on Thursday during the latest hard fork upgrade, dubbed London, officially activated on the Ethereum blockchain network. The upgrade contributed to bullish price action, with Ether rising around 5% in the past 24 hours, compared to a 3% increase in bitcoin over the same period.

Despite the ETH rally, some analysts expect widespread institutional adoption to take a few years. Institutional interest has boosted the attractiveness of bitcoin investment over the past year, which has helped crypto rally in the fourth quarter of 2020.

I think Ethereum could reverse bitcoin’s market cap in the long run, but not this year, said Ki Young Ju, CEO of CryptoQuant, in an interview with WuBlockchain.

I met Goldman Sachs, Fidelity and other large institutional asset management firms in Miami a few weeks ago and they said they still have a hard time explaining what Ethereum / DeFi is (decentralized finance ) to their bosses, Ju said.

Latest prices

S&P 500: 4,429, + 0.6% Gold: $ 1,814.2, + 0.21% The 10-year Treasury yield closed at 1.217%, down from 1.16% on Wednesday.

Meanwhile, some institutions remain active in the crypto market, either directly or indirectly. On July 22, Fidelity Investments acquired a 7.4% stake in cryptocurrency miner Marathon Digital Holdings for approximately $ 20 million.

French asset manager Melanion Capital obtained regulatory approval to launch an exchange-traded fund (ETF) on Thursday that tracks the price of bitcoin and several crypto-related stocks.

Also on Thursday, Invesco, a US-based asset manager, filed with the US Securities and Exchange Commission (SEC) an application to list an ETF with indirect exposure to bitcoin via contracts at term and other investment vehicles.

Large institutions are entering the crypto market with a bitcoin-based approach. However, it will likely be some time before investors fully embrace altcoins such as Ether, as regulatory hurdles need to be lifted first.

Ethereum London hard fork

The ether was initially stable after the activation of the London hard fork, but began to rally around an hour later. At the time of publication, Ether was changing hands at around $ 2,807, down from around $ 2,600 just before the changes took effect, according to data from CoinDesk 20.

Many crypto traders are focusing on a component of the upgrade, called Ethereum Improvement Proposal (EIP) 1559, which changes the structure of the network fees so that a certain amount of the cryptocurrency supply will be burnt. or withdrawn from circulation. The bet is that the net issuance of blockchains of new cryptocurrency units will slow down due to the change, ultimately helping to set a floor below the price.

Analysts at Stack Funds and elsewhere have likened the London hard fork and the implementation of EIP 1559 to the halving of Bitcoin blockchains that occur every four years in the sense that major changes in the growth of the supply of cryptocurrencies are deployed at specific times in the blockchain lifecycle. Some investors believe that Bitcoin halving events in the past have helped drive up the price of the underlying cryptocurrency.

As of 3:06 p.m. UTC, some 585 ETH fees had been burned, or about 43% of the block rewards issued since the Ethereum hard fork went into effect at data block # 12,965,000, according to the Ultrasound website. money.

Ether techniques

Ether is now above the 100-day moving average for the first time since June. The price rally broke through a significant technical hurdle, although price may find some resistance at the $ 3,000 level.

The daily ether price chart shows the support and resistance levels with the RSI.

Source: TradingView

The ETH rally outperformed bitcoin after a few months of consolidation. The ETH / BTC ratio is testing initial resistance at 0.06, but could rise further as momentum improves.

The ETH / BTC daily chart shows the recent breakout along with the support and resistance levels.

Source: TradingView

Bitcoin seasonality

Similar to stocks, bitcoin is approaching a period of seasonal weakness, which could prompt buyers to take profits. The table below shows, on average, relatively low returns in August over an eight-year period. September tends to be the worst month. Purchases resume in October and February.

Seasonal patterns can vary, especially as bitcoin moved away from its historical trends when it fell in May.

The table shows the average historical monthly bitcoin returns over an 8-year period.

Source: CoinDesk, StockCharts

Stablecoins as collateral

According to Delphi Digital, a research firm that focuses on digital assets, margin assets for bitcoin futures trading have shifted from bitcoin to stablecoins. The change has become particularly significant as open interest with cash margin skyrocketed after the bitcoin price fell in May.

The most important implication of this is that buyers do not have the added benefit of holding both BTC and BTC spot futures while it goes up, but they are no longer exposed to losses anymore. important when their position turns against them (because their margin is in stablecoins, not BTC), Delphi wrote. For shorts, they can profit from downtrends without eroding their margin value, but they lack protection when BTC goes up.

BTC Futures by Margin Asset: Stablecoins (Cash) vs BTC (Coin)

Source: Digital Delphi

Altcoin balance sheet

TRU soared following the announcement of TrustTokens’ fundraising: The price of TRU, the native token of the TrustTokens DeFi TrueFi lending protocol, rose 414% to $ 0.863. CoinDesk reported that TrustToken has raised $ 12.5 million in a new round of funding led by BlockTower Capital, Andreessen Horowitz (a16z) and Sam Bankman-Frieds Alameda Research. TRU is trading at $ 0.65 at time of publication. (Bankman-Fried is a billionaire, who also founded the FTX crypto exchange.) HUSD reserves all held in cash: The reserves supporting HUSD, the eighth largest stablecoin by market cap, are all held in cash in money market accounts in the United States, token issuer Stable Universal told CoinDesk. This is the first time that the issuer has published such information. (EideBailly, an accounting firm, issues monthly attestations that the HUSD token is backed 1 to 1 with dollars, but has never provided a reserve mix.) The disclosure comes at a time when more issuers of Stables have begun to reveal the distribution of their reserves, as investors and regulators demand more transparency. Are Web 3.0 Tokens the Next Hot Trade? Data tracked by Messari and released by Arca Chief Investment Officer Jeff Dorman shows the Web 3.0 token cryptocurrency subsector gained 22% in the week ending August 1, topping bitcoin and all other sub-sectors, including non-fungible tokens (NFTs). Bitcoin, the largest cryptocurrency by market value, rose 10%. Web 3.0 tokens refer to digital assets associated with visions of a decentralized internet. Mark Cubans NFT Platform Complements Polygon Integration: Billionaire Mark Cubans NFT Entrepreneur, Lazy.com, has partnered with Polygon, an Ethereum-scale product, to offer cheaper transactions. . Polygon Studios, Polygon’s gaming and NFT hub, announced the integration on Thursday, saying it would help drive mainstream adoption of digital collectibles. Users can now connect their Polygon wallet to Lazy.com, which also supports Ethereum blockchain-based NFTs. Chainlink unveils Crypto Keepers: Chainlink, the leading data feed provider for blockchain-based smart contracts, expands its services to include decentralized off-chain computation work performed by a network of node operators known as Chainlink Keepers. Chainlink Labs is also setting up inter-blockchain bridges with a fraud risk monitoring component.

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