Market Wrap: 'Ethereum Killers' Pop as ING Report Highlights Ethereum Over Bitcoin

Atcoins are rising, ether hits another all-time high and bitcoin’s correlation to gold drops to zero.

May 6, 2021 at 8:45 p.m. UTC
Updated Sep 14, 2021 at 12:52 p.m. UTC

The tokens of the Ethereum blockchain's competitors are making huge gains Thursday, while ether set a new price record above $3,600. 

Bitcoin has less than 10% of gold’s market capitalization but could continue to differentiate itself from the yellow metal and grow its piece of the total market-cap pie.

  • Ether (ETH) trading around $3,483 as of 21:00 UTC (4 p.m. ET). Gaining 0.28% over the previous 24 hours.
  • Ether’s 24-hour range: $3,397-$3,607 (CoinDesk 20)
  • Ethereum Classic (ETC) trading around $148 as of 21:00 UTC (4 p.m. ET). Gaining 50% over the previous 24 hours.
  • Eos (EOS) trading around $12.29 as of 21:00 UTC (4 p.m. ET). Gaining 48% over the previous 24 hours.
  • Cardano (ADA) trading around $1.59 as of 21:00 UTC (4 p.m. ET). Gaining 9% over the previous 24 hours.
  • Bitcoin (BTC) trading around $56,161 as of 21:00 UTC (4 p.m. ET). Losing 1.6% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $56,586-$58,266 (CoinDesk 20)

Big-time gainers Thursday included tokens associated with blockchain projects that aim to replicate some of the key attributes of Ethereum, mainly programmability.

In the past month, ethereum classic (ETC) has gained over 1,250%, while cardano (ADA) has jumped 238% and eos (EOS) is up 42%, according to Kraken spot data provided by charting software TradingView. 

The gains come as the giant Dutch bank ING used a recent report to throw some support behind the notion of programmable money used for decentralized finance, or DeFi. 

“The recent bull run of ETH has shed some light on competing projects to the Ethereum value proposition, which can be bundled into a category that we can call a ‘sector,” said Elie Le Rest, partner at trading firm ExoAlpha. “The crypto market tends to work on comparable principles, meaning that if a coin of a ‘sector’ has been doing great, such as ETH in the ‘layer 1 sector,’ then other coins of this same sector may follow a similar trend.”

CoinDesk - Unknown

Performance of ETC (green), EOS (Black) and ADA (Blue) the past month.

Layer 1 refers to blockchains that can serve as the foundation for various programming languages to create applications, known as smart contracts, that perform financial functions. Ethereum is a layer 1 smart-contract blockchain; ETC, ADA, and EOS are similar. 

A Wall Street Journal article published Thursday highlights that retail investors are searching for value coins. Ethereum classic may no longer fit that bill, currently priced around $130, according to CoinDesk 20 data, but cardano priced at around $1.63 and eos at a little over $12 certainly do. 

“Interest has flowed out of bitcoin and into [altcoins] for the time being. People are looking further out the risk spectrum for returns,” noted Ciaran Neilan, an executive at crypto market maker GSR.

CoinDesk - Unknown

Bitcoin market dominance the past four years.

Bitcoin’s dominance, its share of the greater cryptocurrency market cap, is one sign of a loss of interest for the world’s oldest cryptocurrency. As of press time, BTC dominance, according to chart provider TradingView, was at around 45%, a low not seen since July 2018. 

During the last bull market, at the start of 2018, bitcoin’s dominance dumped to an all-time low of 35% as investors redeployed their bitcoin gains into alternative cryptocurrencies. 

Early this year, bitcoin dominance went as high as 72%. GSR’s Neilan said that dominance percentage will likely return. It will end how it usually does," Neilan said. "BTC consolidates, then takes back the headlines.”

Institutional interest, price of ether higher than ever

CoinDesk - Unknown

Ether’s hourly price chart on Bitstamp since May 3.

Ether (ETH), the second-largest cryptocurrency by market capitalization, hit a fresh high Thursday of $3,607 at around 17:30 UTC (12:30 p.m. ET), according to CoinDesk 20 data. The price has settled on some heavy selling, but still gained 0.28%.

The European Investment Bank (EIB) issuance of a $121 million bond on Ethereum as another sign of institutional support for the ether ecosystem. 

“I think ether has benefited from the recent Berlin upgrade," Jean-Marc Bonnefous, managing partner at investment firm Tellurian Capital. "For once we have a new all-time high and lots of DeFi activity without a simultaneous explosion of gas [transaction] fees.” The EIB bond issuance could be another sign of institutional support for the ether ecosystem, he said.

CoinDesk - Unknown

Ether futures open interest the past month.

In the ether derivatives market, ETH futures are now at $10 billion – an all-time high. More sophisticated investors are entering the market and requiring more complex instruments. In the past month, open interest in ether futures has climbed by 47% across major venues. 

“I think we're just getting started,” Stefan Coolican, chief financial officer for investment firm Ether Capital, told CoinDesk. “The addressable market for ETH is almost infinitely larger than bitcoin.”

Bitcoin-gold correlation dumping

CoinDesk - Unknown

Bitcoin’s hourly price chart on Bitstamp since May 3.

The price of bitcoin was down Thursday, going as low as $56,586 around 08:15 UTC (3:15 a.m. ET). 

The trading range was even tighter than the day before. Thursday’s $56,586-$58,266 spot price variance was narrower than Wednesday’s $53,633-$57,356 range. BTC is below the 10-hour moving average and the 50-hour on the hourly chart, a bearish signal for market technicians. 

“We're seeing BTC almost completely flat while ETH has pumped,” noted Andrew Tu, an executive at quant trading firm Efficient Frontier. 

“I don't think this is the last we've heard from bitcoin, perhaps just a breather on its march to gold's market cap,” Coolican said. Bitcoin’s current market capitalization is over $1 trillion, according to CoinGecko, versus gold's more than $11 trillion. 

The correlation between the two assets, according to data aggregator Coin Metrics, is near zero, which means their prices are no longer moving in sync as they were for most of last year. In October, the metric passed 0.6. A 1 would signify perfect synchronicity.

CoinDesk - Unknown

Bitcoin-gold correlation the past two years.

Mostafa Al-Mashita, vice president for trading at quant firm Efficient Frontier, says he's ready for the return of BTC action.

“Another leg up for bitcoin is not expected anymore, which is why it'll likely happen,” Al-Mashita told CoinDesk. 

Other markets

Digital assets on the CoinDesk 20 are mostly higher Thursday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Notable losers:

Equities:

Commodities:

  • Oil was down 0.61%. Price per barrel of West Texas Intermediate crude: $64.84.
  • Gold was in the green 1.6% and at $1,815 as of press time.
  • Silver is gaining, up 3.2% and changing hands at $27.32.

Treasurys:

  • The 10-year U.S. Treasury bond yield fell Thursday to 1.570 and in the red 0.11%.
CoinDesk - Unknown

The CoinDesk 20: The Assets That Matter Most to the Market

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
San Francisco NFL Player Alex Barrett Taking His Salary in Bitcoin

The most valuable crypto stories for Thursday, May 20, 2022.

The most valuable crypto stories for Thursday, May 20, 2022.

CoinDesk - Unknown
2
CoinDesk - Unknown
Justin Sun Still Thinks Algorithmic Stablecoins Are a Good Idea

The crypto mogul also said LUNA and UST might make good "meme coins," he said on CoinDesk TV’s “First Mover.”

The crypto mogul also said LUNA and UST might make good "meme coins," he said on CoinDesk TV’s “First Mover.”

CoinDesk - Unknown
3
CoinDesk - Unknown
Former BitMEX CEO Arthur Hayes Sentenced to 2 Years Probation

Hayes pleaded guilty to one count of violating the Bank Secrecy Act (BSA) in February, and faced a sentence of up to 12 months in prison.

Hayes pleaded guilty to one count of violating the Bank Secrecy Act (BSA) in February, and faced a sentence of up to 12 months in prison.

CoinDesk - Unknown
4
CoinDesk - Unknown
Market Wrap: Cryptos Decline Amid Choppy Trading, DeFi Tokens Underperform

Aversion to risk remains as volatility returns to stocks and cryptos.

Aversion to risk remains as volatility returns to stocks and cryptos.

CoinDesk - Unknown