Worldsfeed Desk, Cryptocurrencies, including Bitcoin, continued to surge on Wednesday, but traders are now turning their attention to Ether, the second-largest cryptocurrency, ahead of an upcoming update to its blockchain network that may cause disruption to the market. Over the past 24 hours, Bitcoin’s price has risen 1% to around $28,550, while the price of Ether has advanced 3% to above $1,900, marking the highest levels since last summer, and it has outperformed Bitcoin over the past week.
Ethereum’s “Shanghai Hard Fork” is expected to happen within the next week, marking the latest major upgrade to the ecosystem since the transformation to the blockchain known as the “Merge” last year. The upgrade will allow traders who have “staked” their Ether – locking it up and earning interest – to withdraw. While this may cause some selling pressure as some investors exit their positions, the upgrade is expected to make staking easier, which could support prices and trigger further circulation of funds among the crypto market, often referred to as “altcoin season”. This could shore up the price of major tokens, including Bitcoin.
Crypto traders are now shifting their attention to Ether as they speculate on its short-term price ahead of the Shanghai upgrade. The event has caused volatility, but the conclusion of the upgrade is expected to boost Ethereum’s ecosystem and investors, according to Antoni Trenchev, co-founder and managing partner at crypto lender Nexo. There are long-standing Ether validators who will remain loyal, while many investors who bought high and are deep underwater on their Ether purchases are unlikely to sell, he added.
It is likely that Bitcoin will continue to trade in step with stocks, moving alongside the Dow Jones Industrial Average and S&P 500 as traders shift their expectations over the future of Federal Reserve monetary policy. While the Fed has raised interest rates to rein in decades-high inflation, the recent gains in crypto have come amid estimates that the central bank will become more accommodative. However, pullbacks in Bitcoin have been small and brief, which may reassure the crypto crowd that there is more to come, said Craig Erlam, an analyst at broker Oanda.
In addition to Ether, other altcoins such as Cardano and Polygon have also seen gains, rising 1% and 2%, respectively. However, memecoins, such as Dogecoin, have weakened, dropping 3% to pare gains after a recent Elon Musk-inspired spike, with Shiba Inu shedding 1%. It remains to be seen whether the recent gains in cryptocurrencies, particularly Ether, will continue in the coming days and weeks.
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