ETHBTC Reacts to Tech Stocks, USD, and Bitcoin Supply Changes
• The CME Group report shows that the ETHBTC pair is heavily influenced by various factors, including tech stock performance, the US dollar strength, and Bitcoin supply changes.
• Ethereum is more vulnerable to fluctuations in the US dollar, and the ETHBTC rate is more affected by changes in bitcoin’s supply than ether’s supply.
• If BTC price surges ahead of its next halving in April 2024, as it has trends in the past, this could further boost Ethereum’s relative price.
How ETHBTC Reacts to Factors
The CME Group report shows that the ETHBTC pair is heavily influenced by various factors such as tech stock performance, US dollar strength, and Bitcoin (BTC) supply changes. Cryptocurrency enthusiasts often monitor technology stocks since it significantly influences ethereum’s value more than bitcoin’s. Erik Norland, a senior economist and executive director at CME Group highlighted practical use of Ethereum’s smart contract network compared to Bitcoin’s main function as a highly fluctuating store of value and defense against fiat depreciation.
Impact of USD on ETHBTC
The report suggests that Ethereum is more vulnerable to fluctuations in the US dollar than Bitcoin; hence, its exchange rate with BTC appears fairly steady with about 30% daily volatility over the past year compared to 42% for Bitcoin and 59% for Etherium. A stronger USD negatively impacts ETH more than BTC with minimal correlation between ETHBTC and interest rates, gold, or crude oil futures. Additionally, Ethereum’s supply tends to increase after its price rises indicating that price changes drive supply instead of vice versa.
Influence of BTC Supply Changes
ETHBTC might react more strongly to changes in BTC’s supply than to changes in ETH’s supply due to how economics greatly influence the ETHBTC exchange rate. If BTC prices surge ahead of its next halving in April 2024 as it has trended before then this could likewise boost Ethereum’s relative price even further.
Overall, according to CME Group’s report cryptocurrency enthusiasts should pay close attention to technology stocks performance since it significantly influences ethereum’s value more than bitcoin’s; additionally they should be aware that a stronger USD will have a negative effect on ETH rather than on BTC while observing how both cryptocurrencies have had a correlation of 0.85 over the past year
Finally if BTC prices continue increasing towards its next halving then this could also help drive up Ethereum’s relative price which may further bring opportunities for investors interested in crypto-trading activities