Bitcoin (BTC USD) Turbulence Helps Ethereum Cryptocurrency Price

Photographer: Tomohiro Ohsumi / Bloomberg

Recent Bitcoin swings have turned the cryptocurrency’s spotlight on other digital coins, including Ether, whose gain this year has surpassed the performance of its biggest rival.

The world’s largest cryptocurrency rose 2.5% to $ 37,154.02 at 9:58 a.m. in London after big swings earlier in January. The relative calm of the end may encourage crypto enthusiasts to continue the momentum of coins like Ether, which is up 87% in 2021 from Bitcoin’s 28% advance.

“Bitcoin has been in a range in recent weeks, giving capital time to turn” to other digital assets, said Vijay Ayyar, head of business development with the crypto exchange Luno in Singapore.

Questions abound about the drivers behind Bitcoin’s parabolic surge to nearly $ 42,000 on January 8 before a sharp pullback. A A Bloomberg Economics study suggests animal spirits make up most of the movement, while Bitcoin’s claimed role as a hedge against risks like inflation is secondary.

According to Seamus Donoghue, vice president of sales and business development at digital infrastructure provider Metaco, a stimulus to counter the impact of the pandemic remains positive for Bitcoin and other cryptocurrencies.

At the same time, strategists at JPMorgan Chase & Co. have said that $ 40,000 is a key level for Bitcoin, signaling the risk of another drop unless it drops back above that price soon. Bitcoin is down 7% from the January 8 record, suggesting an exodus of speculative investors.

The Ethereum blockchain is popular for what is called decentralized and is also progressing towards network upgrade. Commentators claim that these trends have helped Ether.

Ether climbed to 13.3% and traded to around $ 1,382 at 10:01 am in London. The Bloomberg Galaxy Crypto Index added around 13%.

– With the help of Mark Cranfield and Joanna Ossinger