Bitcoin (BTC) has slumped below $50,000 in Asian trading as the failure to hold the $60,000 level sees traders bailing out. This looks to be a correction developing in BTC and it is dragging on the altcoin market with many seeing double-digit losses.
Ether (ETH) bucked the bearish trend and saw a new high yesterday at $2,600. Bitcoin’s dominance has now fallen. It now accounts for only 50% of overall cryptocurrency market capitalisation as a result of growth in the rest of the sector.
BTC struggles, ETH soars to new highs
Bitcoin’s failure to hold gains above $60,000 has seen the coin lose further ground. There is a risk that it could fall lower if large traders unwind their bets.
Ether has been going through further upgrades as part of the ETH 2.0 and the coin is seeing further investor support with a new high at $2,600 on Thursday. The market mood has since pulled the coin lower to $2,230 on Friday morning.
Trade Ethereum to US Dollar - ETH/USD CFD
In the meantime, Canada has seen the launch of the first Ethereum’s exchange-traded funds (ETF) in North America and this should help attract investors to the coin. US investors will be able to buy and sell the ETFs if they have access to the Toronto Stock Exchange.
Big gains are being seen in ether as the staking volume in the coin hits $10bn. There have also been positive developments regarding the high fees for Ethereum’s GAS operational token, which saw developers and projects disband the likes of Binance Smart Chain. Ethereum’s move to the 2.0 upgrade has promised to tackle the issue of scalability and that should see developers coming back to the chain.
Coinbase stock down 30% from highs
The buzz in the market surrounding last week’s Coinbase IPO has also faded with the cryptocurrency exchange stock 30% lower from the opening day highs.
COIN has seen its market capitalisation shrink to $58bn. However, the company should become more attractive to value investors because, unlike many other freshly listed businesses, Coinbase is actually profitable. COIN saw a high above $420 on opening day but the shares have now dropped to close at $293.45, but there could be more selling today driven by BTC.
The overall US stock market was under pressure on reports that US president Joe Biden was preparing a steep increase to capital gains tax. The plan would nearly double capital gains tax for Americans earning more than $1m. If enacted, the rate will rise from 20% to 39.6%, according to the report in Forbes. Added to a 3.8% tax on net investment income that was passed as part of Obamacare, the top federal tax rate could reach 43.4%.