The price of Ethereum has reached $2,600, a price not seen since early June, when the cryptocurrency was still descending from its all-time high of $4,357 on May 12.
But now the second-largest cryptocurrency is on the mend. Ethereum’s price is up 5.59% over the past 24 hours and 21.77% this week.
The market cap of Ethereum is now $304 billion, second to Bitcoin’s $779 billion. The global crypto market cap now stands at $1.70 trillion, a 1% increase overnight.
Part of Ethereum’s price surge could be down to a major upgrade scheduled for August 5, the London hard fork. London will introduce EIP-1559, a piece of code that burns some of the ETH that would otherwise be paid to Ethereum’s gas-guzzling miners.
Ethereum’s growth has been helped this year by decentralized finance, a suite of non-custodial trading and lending protocols into which traders have locked $71.5 billion.
NFT projects like CryptoPunks have also helped. While the craze around non-fungibles has largely subsided, the average price of CryptoPunks has increased by 53% over the past week after a number of Ethereum whales started snatching them up on Friday. About 16,000 ETH ($41.5 million) of CryptoPunks changed hands yesterday, up from 709 ETH ($1.8 million) last Saturday.
An anonymous CryptoPunk investor who sold his NFT for 28 ETH ($72,300) yesterday told Decrypt that he sold it because he “wanted to have more ETH before EIP-1559,” and would buy back a CryptoPunk “when the price drops again, and it will.” Other traders think that the EIP-1559 is already priced in, as with other “buy the rumor, sell the news” phenomena.
Meanwhile, the B-word
Bitcoin’s price is $41,522, up just 0.26% since yesterday. But it’s recovered by 21.2% this week, hitting highs of almost $42,000. The rise follows two bearish months since the market crashed in May.
Joshua Lim, head of derivatives at Genesis Global Trading, told Decrypt that Bitcoin’s rise this week comes despite news of a US infrastructure bill that includes a hidden crypto tax, regulatory actions against stablecoins and exchanges, and the Chinese mining migration. The market has discounted such bad news, he said.
On Friday, Bitcoin options contracts worth $1.5 billion expired on derivatives exchange Deribit, allowing bullish traders to get a sizable discount thanks to a month of recovery. Lim said that may have contributed to the price rise.
Arcane Research analyst Vetle Lunde told Decrypt in April that Bitcoin rallied “with force following all monthly options expiries in 2021,” suggesting that “large expiries provide a short-term anchor for the price.”
When Bitcoin goes up, the rest of the market goes up with it. Almost all top 10 cryptocurrencies have been in the green since yesterday. Polkadot, the ninth-largest, has surged by 11% overnight and 30% over the past week. The only exception is Dogecoin, the eighth-largest cryptocurrency, which is down 0.7% today.
