What a week it was for mega-cap cryptocurrencies. Three of the most popular digital assets out there, Bitcoin (BTC -0.48%), Ethereum (ETH -0.49%) and Dogecoin (DOGE -3.65%), each saw impressive gains. As of 12:45 p.m. ET on Friday, these three top-10 cryptocurrencies by market capitalization rose 14.7%, 10.4% and 15.4%, respectively, over the past seven days.
It shouldn’t be surprising for many investors to see Bitcoin lead the market higher, as that’s par for the course for this space. With roughly half the market cap of the entire crypto sector, the direction Bitcoin moves on a given week typically determines how other digital assets perform.
Accordingly, one might view this week’s news that a spot Bitcoin exchange-traded fund (ETF) could be hitting the market sooner than thought as the rising tide that’s lifting all boats. I certainly think there’s something to that.
With that said, let’s dive into what specifically drove these three cryptos higher over the past week and where they may be headed from here.
Bitcoin ETF launch dominates the crypto news cycle
It’s been a busy week in the world of crypto, with the Sam Bankman-Fried trial ongoing, various macro-data releases impacting monetary policy decisions released, and a flurry of token-specific news that’s been enough to make the heads of many investors in the market spin. Of course, this week’s Bitcoin news has dominated the headlines, and for good reason.
Essentially, a number of hints that Blackrock’s spot Bitcoin ETF will finally be pushed over the goal line have materialized this week, with this ETF reportedly being listed on the Depository Trust & Clearing Corporation database under the ticker IBTC.
This ticker appears to have been taken down and put back up again, but the fact that we’re seeing this ticker listed is apparently enough of a catalyst for crypto bulls to point to. Many believe this could be the moment Bitcoin is officially viewed as ‘open for investment’ for institutional investors, much in the same way gold ETFs made investing in precious metals much simpler and more attractive for money managers.
On that note, I’ve been reading a number of interesting analyses on this topic, with many experts attempting to quantify what a spot Bitcoin ETF could mean for the digital currency in terms of capital inflows into Bitcoin and the broader sector as a whole. Right now, I think most of these reports require a great deal of guesswork, so I’m not sure how much credence to give these. However, I do think it’s true that Bitcoin and Ethereum (assuming a spot Ethereum ETF is next, which would be 100% logical) will receive a big boost from a rush of capital into these alternative assets.
Other, more speculative altcoins, such as Dogecoin, may be well positioned to ride a wave of momentum higher. Dogecoin’s price action typically takes its cue from the directional forces created by Bitcoin and Ethereum in a given week.
Indeed, the fact that Dogecoin has moved even higher than Bitcoin and Ethereum on broadly bullish market sentiment outlines the value this token provides traders as a higher-beta option in this space. A number of experts continue to point to “irrational exuberance” when discussing Dogecoin’s price action over the past few days as the key driver of this token. I tend to agree.
Where are these three tokens headed from here?
It’s clear that there’s robust reason for Bitcoin and Ethereum to be up this week. As for the rest of the market, animal spirits appear to remain high, which is a great thing for crypto speculators banking on yet another catalyst-driven bull run over the near term.
That said, the extent to which this rally can be sustained beyond a few days remains to be seen. Once a spot Bitcoin ETF is launched (and maybe a similar Ethereum option), it’s unclear whether the bullish momentum that’s driven valuations higher can continue. Indeed, it could be the latest “buy the rumor, sell the news” event. We’ll see.
It’s my view that now may be a good time to take a cautious view of this space and wait for the dust to settle before stepping in. These three tokens have made nice moves over the past week, for sure. Let’s just see whether these gains will be held before jumping in to ride this latest leg higher.
This news is republished from another source.
