The past few days have seen a roller-coaster ride of such scale and intensity that makes it somewhat rare even for this space. Bitcoin dived nearly $1,000, to then somewhat recover, but still stands around $500 below its all-time high.
Ethereum, on the other hand, after falling some 50% by $100, has in a very sharp V-shaped recovery gone on to reach all-time high, rising to $218. Its market cap is now above 50% of bitcoin’s while its trading volumes have surpassed bitcoin’s.
Does that mean the boom times are back? The answer might be different for btc and eth as for bitcoin it never felt like boom time. Although its price doubled and nearly tripled, there wasn’t much celebration of pizza day, with the community seemingly consumed by the scalability debate, shouting UASF, BU, Segwit, BIP-whatever.
For ethereum, perhaps it’s too early to say, but the party seems to be back on. One reason might be because eth’s price fall on Friday appeared to have little to do with eth and more to do with bitcoin.
The reason why they would be affecting each other even now when eth has direct access to fiat markets is not very clear, but it may well be the case some still enter ethereum through bitcoin, with Poloniex continuing to handle significant volumes in the ETH/BTC pair.
That may mean when bitcoin’s price quickly falls, eth’s price may be affected too, either by demand reducing as potential investors may wait to see how low bitcoin goes or perhaps by traders betting that eth’s price will go down too.
So, eth’s crash didn’t feel real, which might perhaps explain its very quick recovery, not least because the platform continues to attract adoption with new projects, prototypes and tests being launched by both start-ups and household brands.
Which may mean the boom times might have some more to go for ethereum, but no one can really know these things as far as price is concerned. It may go up, down, or perhaps there will be some sidewaying cool down for everyone to just take a deep breath and relax a bit.
Because the past three months have been quite a ride, especially for ethereum which has risen from around $15 to a high of $218 reached today, but also for bitcoin which proved its believers correct and rose to nearly $3,000, to the probable dismay of critics like Paul Krugman.
He hasn’t penned an op-ed on bitcoin yet. Doubt he can beat his 2013 headline which said bitcoin is evil without explaining in the article, even a little bit, how or why.
Dinosaurs, they never learn, but some are now wondering whether bitcoin itself has also become a dinosaur. Ten minute confirmation times feel a bit like a relic from the past, while fees now averaging $3 sort of send us back to the last century.
No wonder they’re hardly partying, while eth seems to have had a hangover on Sunday, after crazy dancing on Friday, a recovery on Monday, and now they are out again, telling themselves they will have no more than four beers this time and no clubbing, just pubs.
Sure, we’ll see. Just don’t trip again because that was a bit scary.
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Last modified: May 21, 2020 9:46 AM UTC