Ethereum Climbs While Bitcoin Falls After Record Surge—Here’s Why

Bitcoin smashed its $120,000 target earlier this week, filling Ethereum holders with a familiar envy as BTC hit multiple new all-time high marks. But on Tuesday, the two largest cryptocurrencies by market value reversed paths, with ETH gaining and BTC sinking. 

Ethereum was recently trading at $3,128, up 4% over the past 24 hours (and 20% on the week), while Bitcoin was changing hands 1.9% lower on the day—at one point dropping below $117,000 for the first time in five days, according to data provider CoinGecko. For ETH, the upturn continued recent momentum that carried the token to its highest level in five months. 

“After two years of underperformance, ETH is gaining traction again,” Greg Magadini, director of derivatives at Amberdata, told Decrypt.

Bitcoin has risen nearly 300% over the past two years, while Ethereum has jumped a more modest 60% over the same period—and is down almost 8% year-to-date. 

The reversal occurred as several publicly traded companies added Ethereum to their balance sheets this week and a rash of ETH-based investment products appeared poised to hit the market. Magadini also noted that Ethereum shrugged off a blow to the digital asset industry’s aggressive policy agenda on Tuesday when the U.S. House of Representatives failed to pass a measure that would enable lawmakers to vote on three major crypto bills. 

“Today’s news is hitting BTC harder than ETH due to crypto-specific trades holding up ETH,” he said. 

Ethereum investors have also grown increasingly optimistic on the likelihood that the U.S. Securities and Exchange Commission will approve Ethereum exchange-traded funds with staking, after the regulator said in a statement in May that it would not classify staking activities as securities transactions. 

More recently, online gambling marketing firm Sharplink Gaming purchased $225 million worth of the token for its balance sheet, bringing its holdings to roughly 280,000 ETH. And earlier this week, Bitcoin miner BitMine acquired more Ethereum, putting the value of its total holdings of the token above the $500 million mark.

Magadini noted that notional open interest in Ethereum futures recently exceeded 12-month highs, or levels last seen when the token was trading at around $4,000 last December, the analyst noted.

“This is a big deal in terms of flows and market participation in the asset,” Magadini said.