Bitcoin Recovers from Lowest Level Since June, Ethereum Rises Above $300

Bitcoin has rebounded from its lowest level since June, while Ethereum has surged above the $300 threshold once again on Friday.

Chris Yoo, a portfolio manager at Black Square Capital, commented via email, “The crypto market seems to be nearing the end of its bearish phase. This correction isn’t surprising, given that many blockchain projects are overvalued and there is regulatory uncertainty.”

As of 1:10 AM ET, Bitcoin was up 2.8% to $6,497.70 on the Bitfinex exchange. Ethereum climbed 5.8% to $302.10 on the same platform.

In the last 24 hours, another cryptocurrency experienced a 6.8% increase, reaching $0.30225 on the Poloniex exchange, while another gained 3.4%, bringing it to $56.879.

Ethereum’s recovery began on Thursday following an update from cofounder Vitalik Buterin regarding the Casper protocol upgrade, which aims to address scaling issues. Buterin shared a detailed 75-post “tweet storm” on Wednesday, assuring supporters that the upgrade, designed to accelerate transaction speeds, is progressing.

Currently, Ethereum processes between three to seven transactions per second, a stark contrast to the thousands that credit card companies handle.

Arthur Hayes, CEO of the cryptocurrency derivatives exchange BitMEX, expressed concerns that anxious venture capitalists may start divesting from their ICO tokens and ether holdings, predicting that Ethereum prices could drop below $100 this year.

While many analysts attribute the week’s cryptocurrency movements to fears about ICO investors liquidating holdings to cover expenses amidst a prolonged bear market, Mati Greenspan, a senior market analyst at eToro, believes this view is oversimplified. He pointed out that the strengthening U.S. dollar has significantly impacted crypto prices.

“With the United States tightening its economy to combat inflation, they’re bolstering the Dollar. As the global reserve currency, the U.S. dollar is crucial for many smaller economies, which depend on a stable exchange rate. In current conditions, with the Dollar viewed as a reliable store of value, there’s little incentive for individuals to invest in digital assets,” Greenspan stated.