(Bloomberg) — Smaller, lesser-known digital currencies are outperforming Bitcoin after the breathtaking surge by the market bellwether in recent weeks.
Cardano surged as much as 30% on Friday, while Solana gained about 8% and Avalanche increased 12%. Meanwhile, Bitcoin was up about 2% and Ether was down around 1%. Combined, the two largest tokens account for about 70% of crypto’s $1.6 trillion market capitalization.
“After the huge rallies Bitcoin and Ethereum have seen, it’s not a surprise that they’re taking a bit of a sideways breather,” said Matt Maley, chief market strategist at Miller Tabak & Co. “However, the fact that these altcoins are rallying so strongly today tells me people have not lost any love for the overall asset class.”
Solana is among the blockchains competing with Ethereum, crypto’s key commercial highway, for a bigger share of digital-asset activity
Options traders have been loading up on bets that Bitcoin will surge to $50,000 by January, when many market observers expect the SEC to finally allow exchange-traded funds to directly hold the cryptocurrency.
“I expect the current uptrend to persist, with Bitcoin gravitating towards 50k, where options strikes are clustering,” said Teong Hng, CEO at crypto investment firm Satori Research.
Bitcoin has surged more than 60% since the middle of October, when speculation jumped that the Securities and Exchange Commission was on the verge of signing off on ETF applications from the likes of asset management powerhouse BlackRock. The token was trading at about $44,100 on Friday.
“Today’s Bitcoin price action shows that while it is sensitive to interest rate expectations, it’s not the primary driver,” said Craig Erlam, senior market analyst at Oanda. “Crypto traders have been increasingly bullish since it became clear that it’s a matter of when rather than if an ETF will be approved. Lower rates simply assist that move.”
–With assistance from Vildana Hajric and Emily Nicolle.
©2023 Bloomberg L.P.
