After little change last week and a slow start on Monday, Bitcoin and Ethereum prices are showing significant bullish momentum today, with BTC peaking above $20k and Ethereum rallying past $1,400. The global cryptocurrency market cap is up 3% today, currently at $957 billion. There’s no doubt that the markets are highly bullish today. Let’s look at relevant news causing today’s price action.
Key Points:
Several reports today highlight that Bitcoin acts like Gold, increasing the correlation between the two assets. According to Cointelegraph:
“Bitcoin’s correlation with gold — which is commonly viewed as an inflation hedge — has been on the rise this year, hitting its highest yearly levels in early October.”
The correlation with Gold is setting BTC to become an inflation hedge against the Dollar, which has been struggling this year despite the Fed’s aggressive monetary policy and interest rate hikes.
Another bullish sign for Bitcoin is the significant increase in outflows of coins from exchange to personal wallets, suggesting investors are looking to open long-term positions in BTC and are ready to hold the crypto asset for several months.
In other news, UK lawmakers are voting to recognize cryptocurrency as a regulated financial instrument. This means cryptocurrency will be treated like other forms of financial assets and regulate the asset class for the first time. While a large portion of the community may be opposed to regulation, at the same time, if the UK government recognizes crypto as a financial instrument, it will elevate cryptocurrencies to a new level with exposure to retail funds.
Ethereum has broken its month-long high as it peaked past $1,400 today. Ethereum has been at the center of a heated debate regarding regulation, and the SEC considers it a security. Despite the news, ETH managed to gain 10% today, signaling that traders remain bullish on the crypto asset.
Moreover, as the largest proof-of-stake network, Ethereum’s forward-looking tech is a significant advantage to Bitcoin, and it wouldn’t be surprising for ETH to overtake BTC one day in terms of market cap. Since Bitcoin continues to utilize a massive amount of energy which is harmful to the environment, Ethereum’s staking consensus model doesn’t require expensive mining rigs to secure its network.
Unlike yesterday, today is an exciting day for cryptocurrencies as BTC and ETH continue their rallies. Whether the bull market will continue for the rest of the week is yet to be seen, but Ethereum’s sudden spike indicates that the market still has plenty of momentum for significant price action.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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