Cryptocurrency roundup: bitcoin approaches its all-time high
The price of bitcoin rose above $55,000 this week, its highest since May. Saloni Sardana looks at what’s behind the rise, and rounds up the rest of the week’s cryptocurrency news.
Welcome back,
It was the week where bitcoin finally staged a comeback following months of lacklustre growth and came close to regaining its all-time high. Indeed, most cryptocurrencies were in the black, enjoying a week of double-digit gains.
Talk of America’s first bitcoin ETF (or, at least, something like a bitcoin ETF) moved markets, while dogecoin-inspired altcoin shib also shot up in price.
Here are the top stories that you may have missed.
Bitcoin nears all-time high
Bitcoin rallied this week and to go above $55,000, the highest it has traded at since May. Experts attributed greater participation by banks as a key reason for the comeback.
“More banks are jumping onto the crypto bandwagon because of investor demand”, Anthony Denier, CEO of trading platform Webull Financial, told Forbes. “US Bancorp launched a cryptocurrency custody service for institutional investment managers and Bank of America started research coverage of cryptocurrencies and other digital asset,”
Also helping prices up was confirmation that the US regulator, the Securities Exchange and Commission (SEC), currently has no plans to ban cryptocurrencies.
SEC chair Gary Gensler said on 5 October that such a decision ultimately lies in the hands of the Congress.
The threat that the US might follow China, which has outlawed cryptocurrencies, was a major source of uncertainty in recent weeks.
SEC approves a not-quite bitcoin ETF
The SEC also approved an ETF which is the nearest thing the US has yet to a cryptocurrency ETF.
The Volt Crypto Industry Revolution and Tech ETF will follow companies that have the bulk of their net assets in cryptocurrencies, or get their revenue from other activities related to bitcoin, such as lending, bitcoin mining or even producing mining equipment.
The news boosted the crypto market and is significant because the SEC has been averse to the concept of cryptocurrency ETFs in recent months, with a number still pending approval by the regulator.
Shib coin climbs more than 200% in a week
Dogecoin-inspired shib soared 200% in a week and at one point became one of the top 20 largest cryptocurrencies by market capitalisation according to data by Coinbase.
Shib, which originally spunout of dogecoin, was subject to the “Elon Musk effect”, which helped it to soar in value. Musk owns a shiba inu dog, which is the poster child of dogecoin.
On 12 September Musk tweeted a picture of his dog with the caption “Floki has arrived”. This resulted in the hashtag “shib trending on Twitter and the term gained traction among retail traders.
Dogecoin was created by software engineers Jackson Palmer and Billy Markus back in 2013. It’s based on a popular internet “meme” which features a picture of a Japanese breed of dog – the shiba Iinu.
Shib was created in August 2020 and brands itself as an Ethereum-based alternative to dogecoin. But, while its gains have been large even for a cryptocurrency, the value of a coin is still minuscule at $0.000022.
Here’s what happened in the cryptocurrency market in the last seven days:
- Bitcoin is up 24% to $55,208.
- Ether is up 19 % to $3,617.
- Dogecoin is up 20% to $0.25.
- Cardano is up 6 % to $2.26.
- Solana is up 14% to $162.74.
What you need to watch out for
Ethereum network’s long-planned upgrade
Ether’s upgrade to a proof-of-stake upgrade is happening in October. The first part of the upgrade, called Altair, is scheduled to take place on 27 October.
The upgrade represents “a ‘low stakes warm-up’ to prepare for the coming “Merge”, when Ethereum will transition from a proof-of-work to proof-of-stake consensus mechanism, reports Coindesk. Both are methods of verifying transactions on the blockchain, but proof-of-work uses a lot of energy, while proof-of-stake is considered more energy efficient and reduces the risk of attacks by miners on the network.