Bitcoin price – Live: Ethereum could ‘flip’ btc as crypto market shoots up $200bn to 3-month high

One of the most prominent advocates of the first theory, that bitcoin is set to continue to sky rocket, is the pseudonymous analyst PlanB.

The Netherlands-based expert gained prominence after publishing his Stock-to-Flow model in 2019, which is based on bitcoin’s inbuilt scarcity and has proved uncannily accurate up until now.

With the supply of bitcoin capped at 21 million, and the mining rewards halving roughly every four years or so, the S2F model posits that bitcoin will experience progressively greater boom and bust cycles. The peak of the current one is somewhere between $100k and $500k, according to different variations of the model.

Depending on who you ask, bitcoin is currently either in the second phase of a two-year bull run that will take it to new all-time highs later this year, or it is experiencing a so-called “dead cat bounce” that will soon see it tumble to new yearly lows.

The cryptocurrency’s latest price surge – it is now above $46,000 – could conceivably fall into either price pattern, judging by previous market patterns. These hastily-put-together charts from the last two major bull runs give an idea of where each camp is pitched.

In contrast to bitcoin’s positive price trajectory – it is now above $45,800 – gold is heading in the opposite direction.

The safe-haven asset suffered two flash crashes in quick succession yesterday, taking it briefly below $1,700. It has since recovered slightly but remains close to its yearly low. Just one year ago, gold was trading above $2,000.

The price of bitcoin just hit a new three-month high.

It is the latest in a series of wild swings for the crypto market in recent months, and analysts have warned that investors should be optimistic but remain cautious.

“A mood of optimism appears to have returned to cryptocurrency markets,” says Paolo Ardoino, chief technology officer at crypto exchange Bitfinex.

“Still, the turbulence that we’ve seen in crypto markets over recent weeks is unlikely to subside. Investors would be wise to ignore the speculative frenzy that can at times take hold and instead take a long-term investment approach, familiarizing themselves with this amazing technology.”

A massive $1.2 trillion infrastructure package currently being considered by the US Senate has received a last-minute crypto tax provision that would significantly increase the number of people who have to report filings to the Inland Revenue Service.

The update to the bill has united both sides of the aisle in opposition to what one senator described as a “reckless and harmful” piece of legislation.

It has also drawn criticism from familiar figures within the crypto space, such as Jack Dorsey and Elon Musk, who claim it will harm innovation in the nascent space and result in developers and entrepreneurs heading overseas.

The final vote on the bill is due to take place later today or early tomorrow, before it moves onto the House.

One of the factors behind Ethereum’s astonishing performance recently has been a major update to its underlying network, which came into effect last week.

Ethereum creator Vitalik Buterin said at time that the upgrade was “proof that the ethereum ecosystem is able to make significant changes” to its digital infrastructure compared to bitcoin.

Market watchers have described it as the biggest update in six years for the world’s second most valuable cryptocurrency. We’ve heard from Simon Peters, a crypto analyst at the online trading platform eToro – here’s what he had to say:

The extent of the disparity between bitcoin and Ethereum’s price performance in 2021 can clearly be seen when charting their percentage gains since the start of the year against each other.

A 53 per cent gain for bitcoin since 1 January is massively overshadowed by ether’s 325 per cent increase. What’s also interesting to note is how the two cryptocurrencies largely mirrored each other for the first few months of 2021, at least in terms of price patterns, however since mid April the pair appear to have decoupled.

Bitcoin’s latest price gains mean it is now up nearly 50 per cent since it crashed below $30,000 on 20 July. By contrast, Ethereum (ether) is up by more than 80 per cent during that same time period.

The fortunes of the second most-valuable cryptocurrency have been boosted by a major upgrade to its network, which has constrained the supply of the far more abundant token and could potentially improve its environmental credentials.

Ethereum advocates have often cited the its overall utility and improved technological features as a reason that it could one day overtake, or “flip”, bitcoin as the world’s most valuable cryptocurrency. Analysts at both Bloomberg and Forbes once again floated this possibility over the weekend, pointing to ether’s apparent price decoupling from bitcoin in 2021.

to The Independent’s live coverage of bitcoin, Ethereum (ether) and the rest of the crypto market.

Amid a chaotic time for cryptocurrency, we’ll be bringing you all the latest news, analysis and expert price predictions throughout the week.