Ethereum Outshines Bitcoin, Dogecoin Rises As Geopolitical Tensions In Eastern Europe Show Signs Of Simmering Down

Gains in Ethereum outstripped those in Bitcoin at press time as the global cryptocurrency market cap increased 4.5% to $1.95 trillion. 

See Also: How To Buy Bitcoin (BTC)

Why It Matters: President Joe Biden said Tuesday that the United States and NATO were not a threat to Russia and that diplomacy was an option to end the crisis brewing in Ukraine. The president welcomed the, as of yet, unverified news that some Russian forces had withdrawn, according to a Reuters report. 

Equity markets rallied in response to the simmering down of geopolitical tensions. The S&P 500 closed 1.58% higher at 4,471.07, while the Nasdaq ended Tuesday 2.53% higher at 14,139.76.

Cryptocurrencies too shot up with Bitcoin and Ethereum touching respective intraday highs of $44,667.22 and $3,185.52.

On Monday, the yield on the 10-year benchmark paper rose 4.7 basis points to 2.0434, as per a separate Reuters report.

“The price action follows almost one-for-one the news of Russian elements moving away from the border with Ukraine,” said Guy LeBas, a chief fixed-income strategist at Janney, as per Reuters. 

“We’re also seeing the yield curve steepening a lot, suggesting a relief rally in risk assets.”

Edward Moya, a senior market analyst with OANDA, said that aggressive tightening fears have driven the surge in global bond yields and if that move has run its course, then Bitcoin could continue to move higher.

“Bitcoin still seems poised to consolidate between $40,000 and $50,000 level as the bond market selloff resumes. Bitcoin has survived the winter plunge and could continue to rise higher if Fed rate hike expectations moderate.”

Cryptocurrency data feed provider Santiment tweeted that Ethereum whales nursed their bags during the December and January price dump. Since Oct. 1, more than 100,000 Ethereum addresses added 1.54 million ETH, which translates into a gain of $4.8 billion. 

Slowing non fungible token and on-chain activity has led to a 72% reduction in Ethereum transaction fee compared to peak high seen last month,” said Delphi Digital, in a note seen by Benzinga.

“NFT activity has been cooling off in the past week. Opensea is one of Ethereum’s biggest gas guzzlers, and an acute slowdown in NFT volume (and thus transactions) can largely impact the price of gas."

At press time, the average Ethereum transaction fee was 0.0066 ETH or $2.07, according to Bitinfocharts. 

Read Next: On-Chain Analysts Knew About Feds' $4.1B Bitcoin Seizure A Week In Advance, Says Ark Analyst