Mastercard and BNY Mellon warmed to bitcoin on Thursday, supporting XRP, ether and other cryptocurrencies
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Ether is beginning to outperform bitcoin, and the trend can continue according to JPMorgan.“Ether is the backbone of the crypto-native economy and therefore functions more as a medium of exchange,” JPMorgan said.These are the three reasons why ether has been outperforming bitcoin in recent days, according to JPMorgan.Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Ether is up 41% in April, whereas bitcoin is down 8% as of Wednesday morning. In a note on Tuesday, JPMorgan gave 3 reasons why ether is outperforming bitcoin, and said the trend can continue going forward as competition heats up in the cryptocurrency market.
There’s a big difference between ether and bitcoin, the bank highlighted. Bitcoin is more of a crypto commodity than currency, and competes with gold as a store of value. Meanwhile, ether is the backbone of the crypto-native economy and functions more as a medium of exchange.
“To the extent owning a share of this [ether’s] potential activity is more valuable, the theory goes, ether should outperform bitcoin over the long run,” JPMorgan said. If that analysis pans out, ether could trade to $3,000, according to one technical analyst.
These are the three reasons why ether has been outperforming bitcoin in recent days, accoridng to JPMorgan.
1. “More resilient liquidity”
A liquidity shock hit cryptocurrencies last week, but bitcoin was hit harder than ether, according to JPMorgan.
“This liquidity shock originated in the derivatives market, leading to sizable liquidations. The effect was arguable greater in bitcoin futures, where liquidations of net longs since that event total 23% of the ex-ante open interest; that said ether is not behind with 17% of net long liquidations over the same period,” JPMorgan said.
“Against that backdrop, the more dramatic recovery in ether market