Cryptocurrencies extended their gains to close the week with bitcoin maintaining a steady position above the $100,000 mark, while ether experienced its most significant rally since 2021. Bitcoin rose nearly 2% to $103,144.27 on Friday, briefly reaching $104,324.65, marking its highest price since January 31. For the week, bitcoin saw an increase of over 6%, completing its fourth consecutive week of growth, the first such streak since November.
The recent surge in bitcoin is not seen as mere market exuberance, but as a result of a shift in market flows, according to experts. Gadi Chait, head of investment at Xapo Bank, attributed the rally to the accumulation of bitcoin by large investors or “whales” on the blockchain, alongside record demand for exchange-traded funds (ETFs) and increased interest in ‘neutral’ assets. Additionally, recent geopolitical developments, including a mini-deal between the U.S. and the UK and potential tariff relief from China, have eased risk aversion, benefiting bitcoin, equities, and oil.
The positive sentiment spread to altcoins, which have struggled to keep up with bitcoin’s growth this year. Ether, one of the laggards, surged 11%, bringing its two-day gain to 29%. The Solana token also saw a 7% increase, adding to a 17% gain over two days. This week, the Ethereum network completed its latest upgrade, Pectra, which reduces network fees, streamlines staking, and introduces support for smart wallets. As a result, ether is up 26% for the week and on track for its best week since May 2021.
However, despite these gains, ether and other major altcoins remain significantly down for the year. Bitcoin is up 11%, while ether and Solana are down 30% and 11%, respectively. Bitcoin’s market dynamics have shifted since the launch of spot bitcoin ETFs in 2024, attracting demand from retirement accounts, macro funds, and corporate bonds, while altcoins still rely heavily on crypto-native, risk-on capital.
As long as altcoins lack a structural buyer base, their prices may continue to lag behind bitcoin’s outperformance. Analysts suggest that until broader capital flows into altcoins, bitcoin will likely continue to lead the crypto market, with investors advised to focus on bitcoin until conditions improve.
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