News
Why Bitcoin Cash, Ethereum Classic and Litecoin are rising today
Spot Bitcoin ETF approvals are just one catalyst taking these three tokens higher today.
The entire cryptocurrency world has been shaken, in a good way, by recent developments regarding yesterday’s approval of some exchange-traded products. For Bitcoin Cash (BCH 6.07%), Classic Ethereum (ETC 2.07%) e Litecoin (LTC 2.20%), broadly positive sector sentiment appears to be a key factor behind the impressive upward movements of these tokens. As of 2 PM ET, these three tokens were up 13.9%, 34.3%, and 6.3% respectively over the past 24 hours.
Approvals of 11 commercials Bitcoin Exchange-traded funds (ETFs) from the Securities and Exchange Commission (SEC) yesterday have undoubtedly sparked significant interest across the cryptocurrency industry today. Much of today’s increase can be attributed to expectations that institutional capital will flow into this sector in a dramatic way. In fact, some analysts’ projections peg the impact of these approvals at around $100 billion. This is a win not just for Bitcoin, but for investors considering this entire space, as it legitimizes the cryptocurrency for both institutional and retail investors.
Let’s dive into what’s behind the specific moves of these three cryptocurrencies today, beyond the obviously bullish news dominating the market right now.
Why are these three tokens rising today?
For Bitcoin Cash, a peer-to-peer electronic cash system closely related to Bitcoin, today’s news is obviously positive for this network. However, there are other key factors that support Bitcoin Cash’s recent performance. The news that cryptocurrency payments have risen to a record high in 2024 is very optimistic for the likes of Bitcoin Cash and other payments-focused cryptocurrencies. A January 10 report reported that nearly 1.3 million Bitcoin transactions would be processed in 2023 alone, bringing the total number of Bitcoin transactions to over 4 million. For those who are bullish on cryptocurrencies as a payment facilitation technology, this is a strong catalyst to consider for Bitcoin Cash.
For Ethereum classic, the proof-of-work fork of Ethereum blockchain, the excitement over the potential approval of spot ETFs on Ethereum appears to be spurring interest in this adjacent token. Essentially, investors and traders appear to be speculating on a potential hard fork for Ethereum Classic, which would better align the network with that of Ethereum and improve its prospects (if Ethereum rises following ETF approvals, it could be argued that Ethereum Classic it could also be due for a gathering). Of course, such a substantial move of over 30% might be excessive, so this will definitely be a topic that token traders will focus on in the coming days.
Litecoin’s more subdued growth today appears to be tied more to industry-specific tailwinds than anything else. Largely seen as an alternative to Bitcoin and Ethereum, this is a token that typically rides higher and lower tides in specific time frames. Right now, there is a rising tide lifting most boats in this space, and Litecoin investors are certainly pleased to see the momentum that has taken this token higher over the past 24 hours.
Is this momentum sustainable?
Ultimately, we will have to see whether these spot ETF approvals are a “news sell” event or a strong catalyst that puts a floor under cryptocurrency prices for the foreseeable future. In many respects, we won’t know what outcome will materialize until after the fact. Therefore, some hesitation could lead to a waiting period for some long-term investors and could present an opportunity for buyers considering these tokens to enter and ride the momentum higher in the medium term.
Overall, I think yesterday’s spot ETF approvals are a bullish catalyst for the sector. First, these approvals legitimize cryptocurrencies as an asset class that institutional investors can buy into. Another key factor driving industry interest is the surge of institutional capital expected for large-cap cryptocurrencies. As a result, for those seeking exposure to these trends and looking for less visible (and potentially more profitable) ways to play cryptocurrencies, these three tokens will likely continue to be in focus in the coming weeks.