Bitcoin
Why Bitcoin, Ethereum and Dogecoin rose the most this week
These three megacap tokens are rising in the wake of a major potential catalyst.
This week has been a wild ride in the world of cryptocurrencies, but mostly it has been a ride higher for investors in the biggest blockchain projects. Bitcoin (Bitcoin -3.38%), Ethereum (ETH 1.35%) and Dogecoin (DOGE -4.65%) have seen some notable upward moves over the past week, rising 3.3%, 28.7%, and 5% over the past week as of noon ET on Thursday.
The story this week that appears to be providing the rising tide lifting the boats for all large-cap digital assets is the expectation that a decision will be released this week on whether the Securities and Exchange Commission (SEC) will approve spot Ethereum ETFs.
Bitcoin has surged towards final approval of spot ETFs for this crypto, and there has been a flood of capital into this asset. This is a clear and significant catalyst for the industry overall and could lead to the development of other similar products in the future.
Let’s dive into each of these tokens and what to watch for in the coming week.
Are spot Ethereum ETFs coming?
Some level of uncertainty remains regarding the regulators’ final decision for both the VanEck spot Ethereum application (which will launch later today) and the ARK 21Shares ETF application that will launch tomorrow. At the beginning of this week, expectations were that we wouldn’t hear anything until next week at the earliest. Consequently, as the timeline moves forward, investors will soon see whether these bullish bets were correct.
The potential flow of capital into Ethereum could disrupt flows into Bitcoin-focused spot ETF funds. Therefore, the price action we are seeing with Bitcoin in this announcement is not surprising. Ethereum’s gain should (at least somewhat) be Bitcoin’s loss, although it is important to note that Bitcoin is still trending positively on this news as it is good for the broader sector.
Dogecoin’s price action appears to be relatively separate from the top two cryptocurrencies by market capitalization. That said, expectations of greater liquidity in this space, courtesy of institutional investors, have traders stepping up more speculative bets to capture maximum upside today.
Where to go from here
Personally, I think the safest place to be right now when it comes to these top digital assets is on the sidelines. Yes, there is huge upside potential if the SEC rules in favor of spot Ethereum ETFs. But I think the downside risk of a “no” could outweigh any future gains (and certainly a lot has already been priced in).
Various regulators have shown varying levels of enthusiasm for these spot Ethereum ETF products, so the outcome remains uncertain. Until we get approval on the books, this is a catalyst that I don’t think is worth trading right now.