Bitcoin is holding above $50,000 at press time and is up about 2% over the past week. Higher price moves in cryptocurrencies have coincided with a rally in global stocks this week, signaling greater appetite for risk among investors.
Ether, the second-largest cryptocurrency by market capitalization, reached $4,000 on Friday for the first time since May. ETH is up about 20% over the past week, extending its outperformance versus bitcoin.
“BTC wants to join the party, too,” Martha Reyes-Hulme, head of research at digital asset prime brokerage and exchange Bequant, wrote in an email to CoinDesk. “Bitcoin dominance has been falling towards 40% and may gradually weaken as investors branch out to other areas of the market, focusing more on use cases than purely store of value,” Reyes-Hulme wrote. Bitcoin’s dominance ratio represents its market capitalization as a percentage of the overall $2.28 trillion crypto market.
- Bitcoin (BTC): $50,507, +2.4%
- Ether (ETH): $3,944, +4.3%
- S&P 500: -0.0%
- Gold: $1,830, +1.1%
- 10-year Treasury yield closed at 1.324%
Risk rally continues
Bitcoin is up about 70% year to date compared to a roughly 20% rise in the S&P 500 over the same period. Gold and bonds have produced negative returns so far this year as investor appetite for risk continues following the coronavirus pandemic shock in March 2020.
Both equities and cryptocurrencies experienced relatively low volatility over the past few months, partly driven by the market’s expectation of continued monetary policy easing.
On Friday, the U.S. added 235,000 jobs, falling well short of the 725,000 projection. The jobs miss reinforced expectations that the Federal Reserve’s stimulus program, known as quantitative easing (QE) could persist longer than expected and therefore boost asset prices. Bitcoin and stocks moved higher shortly after the jobs report.
Ether options premiums rise
Realized volatility for ether is starting to rise again after a flat August. Meanwhile, the cost to buy short-term ETH options is also rising, which could point to overheating.
Large-size call positions were spotted on Wednesday morning when ETH broke out of a monthlong range above $3,400, according to options data provider Skew. And technical charts suggest the rally is overbought, albeit less so compared to August.
The chart below shows ETH front-end risk reversals, the difference in implied volatility between similar call and put options, have flipped strongly to the put side.
“With the speed of this move higher, a sharp mean-reversion move would not be too surprising,” crypto trading firm QCP Capital wrote in a Telegram chat.
Solana enters the major league
Programmable blockchain Solana’s SOL token rallied to a new high on Friday near $145, replacing the meme-focused cryptocurrency dogecoin as the seventh-largest coin by market value.
SOL’s market capitalization jumped to $42 billion, surpassing dogecoin’s $38 billion market cap.
- Sotheby’s hosts “Bored Ape Yacht Club” (BAYC) NFT auction: The series of computer-generated monkey-themed avatars is expected to fetch between $13.5 million and $20 million during a two-lot online sale running Sept. 2-9. “The Bored Ape Yacht Club project is one of the most exciting and creative NFT collectible initiatives since the launch of CryptoPunks,” said Michael Bouhanna, a contemporary art specialist and co-head of digital art at Sotheby’s, in a statement. The BAYC collection was developed last spring by Yuga Labs and touts National Basketball Association star Steph Curry as a collector.
- South African Regulator FSCA issues warning over Binance: South Africa’s Financial Sector Conduct Authority (FSCA) warned the public to be “cautious and vigilant” when undertaking financial transactions with cryptocurrency exchange Binance. The authority said the exchange was not authorized to provide advice or services in the country, and that customers would have no recourse if trades go awry.
- Mark Cuban’s Dallas Mavericks offers cashback rewards on merchandise purchased in dogecoin: The Dallas Mavericks basketball team is offering a “free $25 e-gift card for purchases made with eligible cryptocurrency on DallasMavs.Shop,” according to the team’s official merchandise shop website. The promotion is expected to run through Sept. 30. In March of this year the Dallas Mavericks became the first NBA team to accept dogecoin as payment.
Most digital assets in the CoinDesk 20 ended higher.
Notable winners as of 21:00 UTC (4:00 p.m. ET):
- Litecoin (LTC): $214.14, +15.0%
- Bitcoin Cash (BCH): $719.69, +8.6%
- Uniswap (UNI): $29.13, -2.8%
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