After a relatively stagnant market activity this week, with Bitcoin managing to hold the $23k support level, Ethereum soars to $1,700, gaining 6% today. With the recent price hike, ETHUSD is nearing the 50% market capitalization of Bitcoin, inching closer to possibly overtaking BTC as the most-valued cryptocurrency by market cap. The global cryptocurrency market also shows substantial price growth, valued at over $1.1 trillion, up over 3% in the past 24 hours.
Key Points:
Many traders believe Ethereum could overtake Bitcoin in market cap soon, in an event dubbed “The Flippening.” Originally coined in 2017, the term refers to Ethereum’s market cap rising above Bitcoin.
To overtake Bitcoin in market cap, Ethereum needs to double in price, rising above $3,400 with BTC remaining stagnant. While such a price hike isn’t likely to occur anytime soon, if ETHUSD continues to outperform BTCUSD on a daily/weekly basis, we could see Ethereum rise to the top in the next few months before the end of the year.
After all, come September, Ethereum’s network will transition to a proof-of-stake consensus model, making it an eco-friendly network that doesn’t require a ridiculous amount of electricity to secure its blockchain. Called the “merge trade,” traders are capitalizing on the upcoming network switch and are investing in Ethereum rather than Bitcoin, which is still running the archaic proof-of-work model.
Ethereum will continue to outperform Bitcoin in the next several months unless a vulnerability is discovered in ETH’s proof-of-stake consensus mechanism.
Today’s news for Bitcoin is a partnership between BlackRock and Coinbase. BlackRock is a leading investment management and financial service platform with a current market cap of over $100 billion, speaking to the tremendous scale of the platform. BlackRock features more than 18k workers, and in 2021, it managed to secure over $19 billion in revenue via its investments and asset management.
In a blog post on August 4th, Coinbase announced that it was selected by BlackRock to provide clients access to cryptocurrency trading via Coinbase Prime, the company’s institutional investing solution providing secure custody and an advanced trading platform for its clients. Coinbase and BlackRock will enable a new access point for institutional investors to purchase many digital assets, increasing adoption for crypto markets and opening the doors for a large selection of institutional investors to buy cryptocurrencies.
The announcement caused Coinbase shares to rise by over 10% in a single day. Coinbase (NASDAQ: COIN) is up over 47% in the past five days, rising from $60 on August 1st and currently trading at $88.90. Moreover, BlackRock also saw its shares increase due to the partnership, with its stock (NYSE: BLK) rising from $661 on August 1st to currently trading at $696.
We’ll likely see bullish momentum throughout the weekend, with Bitcoin and Ethereum leading the markets. Now that the Solana hack news is starting to dissipate, traders are regaining confidence in cryptocurrencies. The markets are also showing a substantial increase in trading volume, with BTCUSD’s 24-hour volume rising by 9.5% and ETHUSD rising by 5%.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any stocks.
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