Bitcoin and ether (ETH, +6.17%), the two biggest cryptocurrencies, surged to new all-time high prices on Tuesday, the day before the highly anticipated Coinbase listing on Nasdaq.
Prices for bitcoin (BTC, +4.35%) (BTC), the oldest cryptocurrency and the largest by market value, rose 6% on the day, reaching as high as $63,661 around 15:40 coordinated universal time (11:40 a.m. ET), based on CoinDesk 20 data. Ether, the native cryptocurrency of the Ethereum blockchain and the second-largest overall, set a new high water mark of $2,271.
Analysts had signaled that the extra publicity and investor-relations chatter surrounding the Coinbase listing might lead to an uptick in the pace of cryptocurrency adoption, or at the very least, speculation.
Such heightened demand comes at a time when data extracted from the Bitcoin blockchain appear to show more investors pulling the cryptocurrency down from big exchanges, ostensibly a sign they might be moving their holdings offline for the long term and have little intention of selling.
“The dynamics have changed quite dramatically this year,” Simon Peters, an analyst with the trading platform eToro, said in an emailed comment. “Demand is flooding the market from institutions just as large amounts of bitcoin and ethereum are increasingly being taken offline and holders are transferring them to their own wallets. There is only one outcome from that, and investors should expect higher highs and higher lows throughout the year.”
- The rally comes after weeks of bitcoin trading sluggishly in a narrow range below $60,000.
- Chart patterns suggest that bitcoin prices have broken out of their recent trend and aren’t expected to hit price resistance until it rises to $68,000-$70,000.
- “Cryptocurrency markets are showing robust strength ahead of the Coinbase IPO as bitcoin moves into the all-time high territory,” Matthew Dibb, COO and co-founder of Stack Funds, told CoinDesk
- “A re-rating of crypto assets is definitely on the cards following the $100b valuations of Coinbase’s shares (COIN),” Dibb added.
- Analysts projections for COIN’s listing are ranging from $19 billion to $230 billion, as discussed last week.
- COIN shares will provide traditional investors exposure to a crypto platform that earns money from fees while avoiding the volatility and risk of crypto assets themselves. “Coinbase will be a lower beta play,” Delphi Digital’s Kevin Kelly told Bloomberg.
- The exchange recently disclosed Q1 revenue growth of 840% year-on-year, blowing past analysts’ estimates by a big margin.
- Alternative cryptocurrencies, in general, have performed better than bitcoin in recent weeks, pushing the latter’s market dominance to two-year lows near 55%, according to data source TradingView.
By: Omkar Godbole