Bitcoin Rally Spurs Altcoin Interest | Ether Hits $4,000

Inflows into new ETFs are driving the bitcoin run.

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Nina Bambysheva Staff Writer, Forbes Money & Markets
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Steven Ehrlich Director, Forbes Digital Assets
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DOES THE CRYPTO RALLY HAVE LEGS?

On Tuesday, bitcoin surpassed $69,000 for the first time in its 15-year history. The milestone came 848 days after its previous peak on November 8, 2021. In the months that followed, the crypto industry dealt with a harsh bear market that caused the asset’s price to drop by more than 80% and wiped more than $2 trillion in market value among all digital currencies.

With bitcoin surging–largely driven by demand for new exchange-traded funds backed by the spot price of the senior cryptocurrency–traders are beginning to look down the list of smaller tokens for those that might benefit in its wake. If bitcoin holders cash out some of their gains and decide to invest in more speculative tokens, those newly favored alternatives could see gains that outpace bitcoin. The effect is known as an alt-season, and it could see bitcoin’s share of the crypto market erode from the roughly 50% at which it currently sits.

Indeed, bitcoin took a back seat this week, rising about 9.6% on Friday afternoon while the overall market was up 12%. Some of the latter gain can be attributed to a jump in ether that is linked to speculation that it might be the next crypto that could be allowed into spot-market ETFs, but the Ethereum blockchain can be used to create products and services such as those used for decentralized finance. This kind of technology token, which also includes solana and Polygon’s matic is “underappreciated right now, according to Kavita Gupta, founder of the early-stage investor Delta Blockchain Fund.

Outpacing bitcoin, ether gained more than 14% for the week, solana 13% and matic 11%, according to CoinGecko data.

ETHER REGAINS $4,000 ON ETF OUTLOOK

The second-largest cryptocurrency hit $4,000 for the first time since December 2021, a month after it reached an all-time high of $4,878.

Following on the bitcoin experience, ether has been rising on speculation about the launch of spot ETFs in the U.S. The Securities and Exchange Commission faces a May deadline to approve or reject the first application from a slate of money managers that is similar to those offering the bitcoin funds. The situation is complicated by the question of whether the SEC considers ether to be a security.

Additionally, the Ethereum blockchain is poised for a major upgrade called Dencun, which will enable users to store data more efficiently. It is expected to occur on March 13.

CURRENT PRICE OF TOP 5 COINS (7-Day % Change)

Coin

Price

Percent Change

Bitcoin (BTC)

$69,224

10.7%

Ether (ETH)

$3,953

15.0%

Tether (USDT)

$1.00

0%

Binance Coin (BNB)

$486

19.4%

Solana (SOL)

$147

12.7%

Sources: Forbes Digital Assets, CoinGecko. Prices as of 4:25 p.m. on March 8, 2024.

FTX AND BLOCKFI REACH A TENTATIVE SETTLEMENT

Bankrupt crypto companies FTX and BlockFi have resolved their disputes regarding the latter’s collapse, with FTX agreeing to pay BlockFi up to $874 million, according to documents filed with the U.S. bankruptcy court in New Jersey on Wednesday. Under the settlement, which is subject to court approval, FTX will initially pay BlockFi $250 million. The remaining sum is contingent on FTX’s ability to repay its customers, which is being facilitated by the recent increase in cryptocurrency prices.

BlockFi sought Chapter 11 bankruptcy protection in late November 2022, attributing its financial troubles to FTX’s collapse earlier that month. The legal battle between the two companies ensued in 2023, with BlockFi claiming FTX owed it more than $1 billion.

BAKKT RAISES $38 MILLION

Crypto infrastructure firm Bakkt sold $37.6 million of shares and warrants on Monday to counteract the effects of a cash crunch it revealed last month. The transaction involved the issuance of more than 34 million shares of Bakkt’s Class A common stock in a registered direct offering to a set of undisclosed institutional investors, according to a company filing. It is also trying to raise capital from its former parent, Intercontinental Exchange (ICE), via a concurrent offering that requires shareholder approval.

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