© Provided by TheStreet Ether (ETH), the second cryptocurrency by market value, has been soaring for 48 hours after a software update that went well.
CONSTELLATION BRANDS, INC.Bitcoin rarely shares the stage in the cryptocurrency world.
The most popular of digital currencies is accustomed to being alone in the photo finish and to be celebrated by its fans.
This is the scenario that was playing out in recent weeks, especially with its rebound above $30,000 per unit, a level that had not been seen since last June.
But this rise has been eclipsed for 48 hours now by the performance of another cryptocurrency. It is Ether (ETH), the native token of the Ethereum blockchain, which is an ecosystem hosting cryptocurrencies, non-fungible tokens (NFTs), and decentralized financial services apps. It is considered the second blockchain after Bitcoin, making ETH the second largest coin by market value after BTC.
Ether prices are up 9.6% to $2,114.25 in the past 24 hours according to data firm CoinGecko. This is the highest level since last May. By comparison, Bitcoin only gained 2.3% to $30,827.10 over the same period. Year-to-date ETH prices are up 77%.
The rise of Ether is due to the fact that the update of a long-awaited software did not provoke the fears that it aroused according to the experts. Indeed, this update known by insiders as Shanghai, or Shapella, allows investors to withdraw their Ether tokens that they had pledged to help the Ethereum ecosystem operate in exchange for rewards. This process is called staking. Investors had feared that this opportunity would lead to significant outflows. But instead of outflows, analysts say they have observed that investors have so far only taken their rewards and left their initial stake, which has helped to reassure the whole crypto space.
"The successful activation of the Shapella hard fork triggered the rally," said analysts at crypto firm FxPro Group.
According to crypto research firm Nansen, investors withdrew an average of 10,000 Ether per hour, which amounts to a total of 66,815 Ethers worth $128 million. The withdrawals represent only 0.3% of the 18.1 million Ethers that were staked, Nansen estimates.
Noelle Acheson, economist and author of the newsletter "Crypto is Macro Now" believes that the rise in Ether prices is a combination of factors.
"It seems to be a bet on the overall liquidity outlook, but relief that Shapella did not produce a sharp drop is driving ETH's outperformance this morning," she told CNBC. "ETH is outperforming BTC here because it has quite a lot of catching up to do and traders, seeing that there was no adverse reaction to" the upgrade "are now feeling more confident about coming back in."
The prices of Ether, like those of Bitcoin, are however still far from their peaks reached in November 2021. On November 10 that year, the price of ETH had risen to $4,878.26, an all-time high. On the same day, the price of BTC had reached the price of $69.044.77, an all-time high.