Market Wrap: Bitcoin Jumps to $14.2K; Ethereum Gas Usage Grows 113% YTD
Bitcoin is making gains during the U.S. presidential election uncertainty while Ethereum’s gas data is highlighting a DeFi decline.
- Bitcoin (BTC) trading around $14,061 as of 21:00 UTC (4 p.m. ET). Gaining 2.2% over the previous 24 hours.
- Bitcoin’s 24-hour range: $13,545-$14,232
- BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.
Bitcoin’s price made gains Wednesday, hitting as high as $14,232 around 17:00 UTC (12 p.m. UTC), according to CoinDesk 20 data, after a brief dip in earlier trading.
“Bitcoin has recovered from its post-election drop, crossing the $14,000 level once more,” said John Kramer, a trader at crypto market making firm GSR. “The asset has done a good job of going its own way all year, vastly outperforming stocks.”
Bitcoin is up 90% versus the S&P 500’s comparatively paltry 4.5% performance in 2020.
Stocks are up Wednesday despite the lack of a confirmed winner as yet in the U.S. presidential election. “Equities are unmoved by the uncertainty, rallying in the face of two possible outcomes,” GSR’s Kramer added.
Jason Lau, chief operating officer for San Francisco-based cryptocurrency exchange OKCoin, said he is not convinced that bitcoin’s jump Wednesday has anything to do with the election’s outcome. “While all eyes are on the election, it’s too early to attribute bitcoin’s gains to it in terms of the macro policy impact from either candidate,” Lau told CoinDesk.
Cryptocurrency analysts are also keeping an eye on the U.S. Dollar Index, a measure of the greenback’s strength against a basket of other currencies, which is up 0.15% as of press time. “The dollar downtrend is due to resume,” said Bill Noble, Chief Technical Analyst at Token Metrics.
Bitcoiners, as is often the case, remain bullish nevertheless.
“Too many people believe the election can stop the crypto uptrend,” Token Metrics’ Noble said. “A strong desire for economic freedom and the emergence of inflation drives the uptrend in crypto. Those trends are in motion, and they will remain in motion regardless of who occupies the White House.”
“My opinion is BTC will go up regardless of who wins this election in the short- to mid-term,” noted Alessandro Andreotti, an over-the-counter crypto trader.
One signal for bullish sentiment: Overnight, over 6,700 CME bitcoin futures contracts traded (33,500 equivalent BTC), 75% more than what has been observed year to date and more than double the volume observed since launch, according to a representative from CME.
Ethereum gas up, fees down
The second-largest cryptocurrency by market capitalization, ether (ETH), was up Wednesday trading around $400 and climbing 4.6% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
Usage on Ethereum, in terms of total gas, has grown 113% in 2020 so far, from 37,252,588,523 on Jan. 1 to 79,617,868,730 on Tuesday.
Meanwhile, fees on the Ethereum network, required to conduct transactions and interact with decentralized finance, or DeFi, continue to be lower. On Nov. 1, average transaction fees dipped as low as 0.00229753 ETH.
Ben Chan, vice president of engineering for oracle provider Chainlink, says this data suggests despite the growth in 2020, there is currently less demand on the Ethereum network as interest in DeFi has seemingly waned. “What this could mean is people are less urgent to get transactions in, they’re willing to wait longer,” he told CoinDesk.
Other markets
Digital assets on the CoinDesk 20 are mixed Wednesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):
- Oil was up 2.1%. Price per barrel of West Texas Intermediate crude: $38.93.
- Gold was in the red 0.24% and at $1,904 as of press time.
- U.S. Treasury bond yields fell Wednesday. Yields, which move in the opposite direction as price, were down most on the two-year bond, dipping to 0.145 and in the red 15.9%.
