Since Bitcoin’s price rose above 32,000 in late October, it has continuously set new annual records. Ethereum (ETH), on the other hand, has not.
Yesterday it suddenly woke up, and in a single day it rose from 1,900 USD to over 2,100 USD, coming close to a new annual record.
To be fair, the highest price Ethereum has touched in this 20203 remains that of 16 April, when it also surpassed 2,140 USD, while yesterday it stopped just above 2,130 USD, but today it looks like it could surpass even these levels and perhaps set a new annual high.
Summary
The reasons for the boom in the price of Ethereum (ETH) in USD
The reason for the boom this time is very easy to identify.
In fact, yesterday news came out that BlackRock had registered an Ethereum Trust in Delaware, and at that point the price of ETH started to rise.
Actually even before that news was made public the price of ETH had already risen from under $1,920 to over $1,940, but that was a minor movement. Instead as soon as the news was made public it sprang to nearly $2,050 within half an hour.
The speculation at that point was that BlackRock was preparing to file an application with the SEC to issue an ETF on spot ETH as well, and that confirmation came a few hours later.
At that point the price went back up, rising from $2,040 to $2,130 within an hour and a half.
The missed annual record
In theory yesterday there would have been every reason for Ethereum‘s price to set a new annual record.
Instead, although it really came very close, it failed to break April’s $2,140.
It is possible that this is because that 2,140 USD has become a real resistance, since everyone who has bought ETH in 2023 is in profit at that figure.
In other words, it is possible that many of those who bought ETH this year with the specific purpose of speculating on it are selling at that figure in order to monetize gains over the medium/short term.
It should not be forgotten that it was since July 15 that the price of ETH had been steadily below 2,000 USD, and at that point for short-term speculators to sell at a figure above 2,100 USD is an opportunity to be taken advantage of.
Future trend
If the price of Ethereum were to react to the news of BlackRock’s ETF in a similar way to that of Bitcoin we could expect a period of stagnation, or even a retracement, followed in a while by renewed growth to new annual highs.
However, in recent months Ethereum’s price trend has diverged somewhat from Bitcoin’s, so it is hard to imagine that it could really replicate such a similar trend.
On the contrary, the fact that after surpassing 2,130 USD yesterday the price of ETH then fell all the way below 2,100 USD, but only to rise again above 2,130 USD, makes one believe that today it might have the strength for one last leap even above 2,140 USD, so as to make new yearly highs already immediately.
Moreover, since yesterday all crypto markets have been in positive territory, and the decidedly positive mood these days could help. However, one should not make the mistake of believing that it will only go up from here on, because a retracement is always possible.
The comparison with Bitcoin
There is also another decidedly interesting fact.
Yesterday, before the ETH boom, it was Bitcoin that had made a small boom, with the price rising in a very short time from about $35,000 to almost $38,000. Later the ETH boom took some interest away from BTC, so that its price dropped to around $36,000.
Prior to the ETH boom there had been new highs in the ratio of BTC to ETH even since May 2021, about two and a half years ago.
In fact, yesterday the ratio of Bitcoin’s market capitalization to that of Ethereum had risen to 3.07 times, and between 2 and 3 in November it was as high as 3.15 times.
The previous record for the past two and a half years was in June last year, after the implosion of Terra/Luna and the failure of Celsius, also at 3.15.
Suffice it to say that in September last year, when there was the Merge of Ethereum with the move to Proof-of-Stake, it had also fallen below 1.9 times.
Moreover, even as recently as early October this year it was below 2.6 times, but starting on 4 October it began to surge until it hit new records for the past two and a half years in early November.
Yesterday, however, it suddenly fell to 2.8, undoing in this respect all the gains made in the second half of October.
In other words, the news of BlackRock’s ETF rebalanced the balance of power between Ethereum and Bitcoin.
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