Market Wrap: Ethereum Hard Fork Rally Outperforms Bitcoin

Ether, the second largest cryptocurrency by market cap, was in the spotlight on Thursday as the latest hard fork upgrade dubbed “London” that was officially activated on the Ethereum blockchain network. The upgrade contributed to bullish price action as Ether rose about 5% in the past 24 hours, compared to Bitcoin’s 3% increase over the same period.

Despite the ETH rally, some analysts assume that a broad institutional introduction will take a few years. Institutional interest has boosted Bitcoin’s investment appeal over the past year, which contributed to a crypto rally in the fourth quarter of 2020.

“I think Ethereum could change Bitcoin market capitalization in the long term, but not this year,” said Ki Young Ju, CEO of CryptoQuant, in an interview with WuBlockchain.

Related: Philipp Plein is the first major fashion brand to accept crypto payments

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

Current prices


Traditional markets:

  • S&P 500: 4429, + 0.6%
  • Gold: $ 1,814.2, + 0.21%
  • The 10-year government bond yield closed at 1.217% compared to 1.16% on Wednesday.

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

Related: The knot: I don’t understand bitcoin maximalism

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

Also on Thursday, Invesco, a US-based asset manager, applied to the US Securities and Exchange Commission to list an ETF with indirect exposure to Bitcoin via futures and other investment vehicles.

Large institutions are entering the crypto market with a bitcoin-first approach. However, it will likely take some time for investors to fully embrace Altcoins like Ether as regulatory hurdles have to be overcome first.

Ethereum London Hard Fork

Ether was initially stable after the London hard fork was activated, but it began to recover about an hour later. At press time, Ether changed hands at around $ 2,807, down from $ 2,600 just before the changes went into effect, data from CoinDesk 20 shows.

Many crypto traders focus on one component of the upgrade, the so-called Ethereum Improvement Proposal (EIP) 1559, which changes the network’s fee structure so that a certain part of the cryptocurrency supply is “burned” or withdrawn from circulation. The bet is that the net issuance of new units of cryptocurrency through the blockchain will slow down due to the change, which ultimately helps set a price floor.

Analysts at Stack Funds and elsewhere have compared the London hard fork and the implementation of EIP 1559 to the “halving” of the Bitcoin blockchain, which occurs every four years in the sense that at certain points in the blockchain’s lifecycle, major changes in supply growth Cryptocurrency can be used. Some investors believe that Bitcoin’s halving events in the past helped raise the price of the underlying cryptocurrency.

By 15:06 UTC, according to the website, around 585 ETH in fees had been burned, or around 43% of the block rewards that had been issued in data block no. 12,965,000 since the Ethereum hard fork came into force.

Ether technology

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

The ETH rally outperformed Bitcoin after a few months of consolidation. The ETH / BTC ratio tests the initial resistance at 0.06 but could continue to move higher as momentum increases.

Bitcoin seasonality

Similar to stocks, Bitcoin is approaching a seasonally weak period that could encourage profit-taking buyers. The following table shows, on average, relatively poor returns in August over an eight-year period. September is usually the worst month. Purchase increases in October and February.

Seasonal patterns can vary, especially as Bitcoin deviated from its historical trends when it slumped in May.

Stablecoins as security

According to Delphi Digital, a research firm focused on digital assets, the margin assets for trading bitcoin futures have shifted from bitcoin to stablecoins. The shift has become particularly significant as cash-margin open interest skyrocketed after the Bitcoin price crashed in May.

“The main implication of this is that long positions don’t have the added boost of holding both spot BTC and BTC futures while they are rising, but they are no longer exposed to major losses if their position reverses against them (because their margin is in stablecoins, not BTC), “wrote Delphi. “With shorts, they can take advantage of downtrends without eroding their margin value, but they lack protection when BTC goes up.”

Altcoin summary

  • TRU rose after TrustToken’s fundraising news: The price of TRU, the native token of TrustToken’s DeFi credit protocol TrueFi, rose 414% to $ 0.863. CoinDesk reported that TrustToken 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 press time. (Bankman-Fried is a billionaire who also started the FTX crypto exchange.)
  • All HUSD reserves are held in cash: The reserves that back HUSD, the eighth largest stablecoin by market capitalization, are all held in cash in money market accounts in the United States, the token’s issuer, Stable Universal, told CoinDesk. It is the first time that the issuer has published such information. (EideBailly, an accounting firm, publishes monthly confirmations that the HUSD token is backed by dollars 1-to-1, but has never provided a reserve composition.) The disclosure comes at a time when more stablecoin issuers are breaking down their reserves , as investors and regulators are demanding more transparency.
  • Are Web 3.0 Tokens the Next Hot Trade? Data tracked by Messari and published by Jeff Dorman, Arca’s chief investment officer, shows that the cryptocurrency subsector “Web 3.0 tokens” grew 22% in the week ending August 1st, and Bitcoin and everyone else Subsectors, including non-fungible tokens, are dwarfed (NFTs). Bitcoin, the largest cryptocurrency by market value, gained 10%. Web 3.0 tokens refer to digital assets associated with visions of a decentralized internet.
  • Mark Cuban’s NFT platform completes the polygon integration: Billionaire entrepreneur Mark Cuban’s NFT platform,, has partnered with Polygon, an Ethereum scaling product, to offer cheaper transactions. Polygon’s NFT-centric and gaming hub Polygon Studios announced the integration on Thursday, saying it would help drive mainstream adoption of digital collectibles. Users can now connect their polygon wallet to, which also supports NFTs based on the Ethereum blockchain.
  • Chainlink Reveals Crypto “Preservers”: Chainlink, the market-leading provider of data feeds for blockchain-based smart contracts, is expanding its services to include decentralized off-chain calculations – a task of a network of node operators known as the “Chainlink Keeper”. Chainlink Labs also builds cross-blockchain bridges that are equipped with a component to monitor the risk of fraud.

Relevant news:

Other markets

Notable Winners from 9:00 PM UTC (4:00 PM ET):

Aave (AAVE) + 10.92%

Unit exchange (UNI) + 8.39%

Algorithm (SOMETHING) + 2.09%

Notable Losers:

stellar (XLM) -1.68%

Chain link (LINK) -0.85%

Dogecoin (DOGE) -0.63%

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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