Bitcoin is currently trading at over $21,900, down from a low of $17,600 last month. Ether, on the other hand, is trading at around $1,500, having fallen below $1,000 in June. Each time, the tumble had dragged them below their record from the previous bubble of 2017-2018. This rise therefore relieves investors who had bought during this period at a high and who had chosen to HODL (“keep”). “Is that a reason to be more optimistic? Probably not. The movements that we are witnessing today generally do not seem to me to be sustainable”slice Craig Erlam, analyst at Oanda.
Latest factor in this revival: “The price of ether skyrocketed after the announcement of the tentative date of ‘The Merge’ on the Ethereum blockchain », notes Simon Peters, an analyst at eToro. This “merger”, in good French, should allow a profound modification of the protocol.
Ether price in US dollars as of July 19, 2022.
First, it will result in a change from “proof of work” to “proof of stake”. That is to say, the Ethereum blockchain will no longer offer everyone the possibility of acting on the register after a calculation competition (proof of work), but only a privileged few who have a minimum sum. (proof of stake). Second, it will be about making ether a deflationary currency. One of the main developers has revealed that the update – after countless delays – will finally take place on September 19, as reported Numerama.
A statement that follows another announcement from Disney: the entertainment and cinema giant will support the start-up Polygon, whose main protocol is based on the Ethereum blockchain, in order to develop NFTs, the metaverse and more generally the web3 . So many notions that seemed to be losing momentum. “It is extremely encouraging to see a company as influential as Disney engage in the development of companies that champion these themes”considers Simon Peters.
Raise your hand if you remember your first Disney experience like it was yesterday ?????????? #disneyfeels
We are excited to announce that Polygon has been chosen to be a part of the Disney Accelerator program ????https://t.co/hk6gZziy8X
— Polygon-MATIC ???? (@0xPolygon) July 13, 2022
More accommodating rates
But the rally in cryptocurrencies began in the middle of last week, on the back of comments from US Federal Reserve officials who are considering a lower rate hike than previously expected by the market. While investors were expecting an increase of 1 percentage point, they are only anticipating 0.75 points. Fed verdict next Wednesday.
Bitcoin price in US dollars as of July 19, 2022.
This kind of signal, which suggests a less strict monetary policy, tends to encourage traditional players to return to risky assets, including technology stocks. The reaction of bitcoin thus reflects that the institutions weigh more and more on the course, because they arbitrate the cryptocurrencies like the titles of the digital companies.
Simon Peters, analyst at eToro even remarks that “Crypto-assets are moving above stock progression curves”. As usual, they amplify the upward or downward movement. But bitcoin and ether are still very far from their last record, in 2021, at nearly $69,000 and $4,900 respectively.