The biggest cryptocurrency by market value, rose more than 7% to USD 20,796, a two-week high. Ether, the second biggest, rose 5% to also hit a two-week peak at USD 1,717. Bitcoin had been as low as USD 18,540 on Wednesday.
Market participants said there was no particular trigger for the gains beyond a broad upbeat mood in evidence across asset classes on Friday, led by a drop in the safe-haven dollar and a rally in Chinese stocks. If the cryptocurrencies can hold their gains until Sunday's close, Bitcoin could log a second weekly rise in a row, and its best week in about a month.
Ether's weekend volatility may be heightened by an incoming software upgrade known as the Merge, due sometime between 10 and 20 September, with the exact timing uncertain. The shift will radically change how transactions are processed and is supposed to slash energy consumption. Some exchanges plan to pause deposits and withdrawals while the upgrade occurs.
Back in the beginning of August we talked about Ethereum’s Merge and how it would influence the blockchain’s operability. The change is expected to make Ethereum more secure, energy efficient, and environmentally friendly.
Since the announcement has been made, investors started adding to their Ether- (ETH)-based digital asset funds, which at the time of our news update on 10 August, had already recorded seven straight weeks of positive inflows. Said inflows reached USD 16.3 between 1-7 August, adding to a total of USD 159 million in inflows over the previous seven weeks.
With this shift towards the Ethereum 2.0 status quo, there is the risk of a fork – a split between blockchain participants. Following the merge, miners will be swapped for so-called validators in which users stake 32 Ethereum to validate transactions on the network. However, if a fork is to happen, there could still be ‘rebellious’ participants that want to remain miners and want to keep the old mining-intensive PoW consensus mechanism alive and well.
Looking at the upwards trend that Bitcoin has showcased recently, one might think that a resurgence is on the horizon. That might be the case. That might also be an optimistic thought. Looking at the digital currency’s price graph in the last year, there is evidence that the trend is downwards.
After reaching a high of almost USD 68.000 back in November 2021, the currency’s price has been dropping significantly, with the value being now only a fraction of what it once was. While a spike of around USD 2.500 in just two days is impressive, there is still a long way for the currency to climb back the mountain that it once mastered.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now