Cryptocurrencies were trading sideways during the last few days while investors waited for new information regarding the Federal Reserve’s monetary policy. The latter could have a significant impact on prices at a time when uncertainty remains high.
Investors have mixed expectations regarding the next steps of the Federal Reserve’s monetary policy. A softer tone could give a boost to cryptocurrencies, which have been under pressure from the successive and large interest rate hikes.
Ethereum is also seeing an important milestone approaching, with the switch to the proof-of-stake mechanism expected to be functional early next month. The move could create significant volatility in the asset’s price but could also help draw large inflows of capital.
The proof-of-stake protocol could significantly decrease Ethereum’s energy consumption and could draw eco-conscious investors. This could also shield the asset from the increasingly staunch critics and actions of governments against electricity-hungry blockchains at a time of high energy prices.
The upgrade could also provide Ethereum with an edge over Bitcoin, which remains the largest crypto-asset by market capitalization so far. Bitcoin has however seen its market share decrease consistently over the last two months in favor of Ethereum and others.
Crypto analysis on behalf of Wael Makarem, Senior Market Strategist – MENA at Exness