As crypto traders will already know, last week (beginning December 4th) ended with a myriad of bullish developments in progress.
Be it Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), or Solana (SOL) and its myriad of airdrops, the space saw many of its major players experience prolonged periods of the green, with this article to explore the most notable developments of the week.
Last week saw Bitcoin almost hit $45,000, as per CoinMarketCap, the coin reached a valuation of $44,385 on Friday 8th December - marking its highest point since April 2022.
Such feat came thanks to several crypto and macroeconomic factors. On the crypto side of things, Bitcoin was bolstered by the fact that goliath asset manager BlackRock had begun ‘seed funding’ its in-waiting Spot Bitcoin ETF - which as we now know, is set to arrive within the first 10 days of 2024.
That being said, such seed amount was said to only be a mere $100,000. In the context of Spot Bitcoin ETF seed funding, this is an absurdly small commitment, which could either indicate lower than expected demand for the new asset class, or the fact that BlackRock is more concerned with getting US Securities and Exchange Commission (SEC) approvals over the line.
However that being said, there’s no reason why the asset manager can’t add more seed investment funds when it sees fit.
Another bullish - albeit speculative - BTC outlook came via Bloomberg ETF analyst Eric Balchunas, who pointed out that the SEC’s recent crypto-education tweets echo what the regulator did before approving Bitcoin Futures ETFs in 2021.
On the macroeconomic side of things, the US Dollar Index (DXY) - i.e. a US dollar strength indicator - recorded low performances on the same day in which Bitcoin almost hit $45,000. This is because crypto prices - as well as those of other risk assets - are inversely correlated to the DXY.
However with evidence from BTC charts - as well as the fact that recent DXY levels are said to mark a ‘local bottom’ - many predict a -10% market correction to come in the coming weeks.
A Slow Motion Rotation Into ETH
Irrespective of why it’s been pumping, Bitcoin bullishness has inevitably caused ripple effects in the altcoin space, as last week also saw Ethereum record its highest price in over a year.
As investors finally began rotating into the biggest altcoin of them all, Ethereum was able to reach its highest valuation since May 2022. Per CoinMarketCap, this was said to be $2,376.
That being said - and as do the Bitcoin charts - Ethereum trading patterns indicate that an overdue 10% pullback may occur in the coming weeks, setting the coin back to a valuation of around $2,100.
And when it comes to ETH/BTC charts, it appears that disparity in investment volumes between altcoins and Bitcoin continues to prevail. Whilst not necessarily good for altcoin enthusiasts as of now, longer-term performances within the upcoming price correction will be the ultimate test of whether the Ethereum investment rotation is here to stay.
Another reason for positive ETH price action is the developments in its own Spot ETF ambitions. This comes despite Grayscale struggling to gain SEC permission to convert its ‘Ethereum Trust’ into a Spot ETF - however things may now swing in its favour after its recent courtroom victory over the SEC regarding its Bitcoin Trust (GBTC) conversion (due to the precedent that’s now been set).
In practice, this means that a Spot Ethereum ETF is not a matter of ‘if,’ but ‘when’ - something that’s perhaps still flying under the radar.
That being said, Ethereum is currently facing competition from ‘Ethereum killer’ newcomer Blast - an upcoming Layer-2 solution that has already accrued over $823 million in total value locked (TVL). Most of such funds have manifested through ETH being staked via Lido, which gives rise to concerns over the value of Staked Ethereum (stETH) if Blast was to ironically blow up.
It would be unfair to label ETH as the only bullish altcoin from last week, as leading ‘Ethereum killer’ Solana also rallied after several of its projects began airdropping tokens.
Inspired by last month’s Pyth ($PYTH) airdrop - which saw $77 million worth PYTH tokens distributed across various chains - the majority of such airdrops have been directed at early adopters. Most notably, leading Solana MEV company Jito ($JTO) airdropped a whopping $225 million worth of tokens to DeFi users after the token was listed on Coinbase.
Other honourable Solana airdrop mentions are Kamino ($KAMINO) and Jupiter ($JUP).
Top Performing Cryptos
The top performing altcoins of last week (and the corresponding reasons) were the following:
BitTorrent (New) ($BTT): BBT pumped due to two governance proposals; one to increase compatibility with Amazon web services, and one to support encrypted file sharing on the BitTorrent protocol.
Bonk ($BONK): Rallied due to the launch of BONK-themed Bored Ape Yacht Club (BAYC) NFTs.
Helium ($HNT): Experienced price pumps due to its economic, peer-to-peer mobile plan being rolled-out across the USA.
ORDI ($ORDI): This Bitcoin Ordinals token pumped in wake of its listing on Binance, as well as due to the ongoing hype surrounding Bitcoin Ordinal NFTs.
Cardano ($ADA): ADA rallied amid the launch of Cardano Ballots - a new technology for facilitating transparent voting events on the blockchain.
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This article is intended for educational purposes and is not financial advice.