about 2 years ago • 1 min
Ether hit a fresh high against bitcoin on Wednesday as the two biggest cryptocurrencies appeared to take direction from different macroeconomic cues.
One ether was worth 0.087 bitcoins as of 10:24am New York time, the highest since February 2018. The total value of all ether tokens stands at $537 billion, compared to bitcoin’s $964 billion market cap.
There are few trends that seem to be driving ether’s outperformance. For one, ether gets its value from interest in decentralized finance (DeFi), non-fungible tokens (NFTs), and other projects that run on the Ethereum network. Bitcoin’s main utility is, like gold, storing value – something that may be less in demand as the Federal Reserve (the Fed) grows more concerned about tackling inflation.
A few years ago, in times of stress crypto investors might flee from the more speculative parts of the market to the relative calm of bitcoin. Nowadays, stablecoins can fulfill that role more effectively, reducing demand for bitcoin in tough times.
And finally, bitcoin’s increasing ownership by institutional investors might be making it more susceptible to traditional macroeconomic drivers like Fed policy or inflation data.
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