The conversation and the comparison between Ethereum and Bitcoin take deeper roots. The global financial market is currently experiencing dynamic shifts in the crypto market, as digital currencies remain as sensitive assets to external factors.
Considering the US Treasury yield released recently, its implications across the market have been witnessed as the crypto community expects a positive return. While both BTC and Ethereum (ETH) have felt the effects of the yield report.
However, not all assets are set to face a bull run amidst the yield report. Bitcoin has been favored as it almost reached a peak of $30,000 but with this announcement players like Ethereum haven’t had such luck. It’s evident that the crypto market is ending its winter season.
Impact of the US Treasury yield on the crypto market
The US Treasury yield is the return on investment recorded debts issued in securities by the government. It’s often considered a benchmark for interest rates and comments on the general market sentiments. A rise in the yields indicates an attractive market for investors to take advantage of the traditional market including bonds.
This in turn draws liquidity away from riskier assets. However, crypto like Bitcoin has gained from the yield as Ethereum feels the burn. The US Treasury hit its 10-year high since 2007, and this has affected ETH holdings on the Ethereum network.
The increased yield is up to 5% and this has affected the staking payout on pledged tokens, and has dropped to an annual of 3.5%. This is close to the lowest level in the past 10 months, after a peak of over 9%.
Bitcoin is currently experiencing a bullish rally since the beginning of the week, reaching the $30K level in the past 24 hours. This has been brought about by the awaited Bitcoin ETF approval that spiked its price and gained bullish momentum.
Despite the fall claims of the SEC’s approval, the House Financial Service Committee members have urged the US Securities and Exchange Commission to reconsider approving bitcoin ETFs. This comes in as hopes for the Grayscale Bitcoin ETF approval were ignited by false reports of BlackRock’s spot Bitcoin ETF approval.
US Treasury Yield tipping the scale against Ethereum
Moreover, Ether’s annual increase to date of 32% has fallen behind Bitcoin’s 77% rally over the same period. After the 50-point base increase of the US 10-year Treasury, Bitcoin saw a rise of 8% and Ether dropped by 5%. Bitcoin also has a higher liquidity pool that is useful in absorbing market shocks and prevents sharp declines following external factors like the yield report.
Ethereum’s vulnerability brought by the yield isn’t expected since it plays a huge role in powering decentralized applications (dApps). Over the years, ETH has proved to be resilient to the impacts of the US Treasury yield. The vulnerabilities have been brought about by several conserving issues, including market perfection.
Compared to Bitcoin, Ethereum is a much riskier asset based on its relatively shorter history in the crypto market. This implies it has less market exposure than BTC. Also, during times of uncertainty, investors are more likely to exit their positions in ETH and this affects its price negatively.
The quantity of Ether staked in the crypto market has fallen by 67%, tagged at 1.2 million as of September, confirmed by Dune Analytics. Currently, Ethereum is up by 2% after the surge in the crypto market, and the $1600 current mark is considered a good resistance level for ETH.
Additionally, the altcoin sell-off often uses Ethereum as a market gateway to other digital currencies. This makes it easier to exchange the asset during market turbulence. Considering the rising US Treasury yield increases, investors tend to diversify their portfolios from altcoins. This makes it easier for BTC to be in a much better position for a bull run than ETH.
