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The Ethereum (CRYPTO: ETH) price is rocketing.
Ethereum is currently trading for US$1,613 (AU$2,303), up 12% since this time yesterday.
Over the past 24 hours, the world’s No. 2 crypto has traded as high as US$1,637 and as low as US$1,424, according to data from CoinMarketCap.
The soaring Ethereum price has lifted the altcoin’s total market valuation up to US$197 billion. Though it’s worth noting that even with the latest leg up, the price remains down 67% from the 16 November all-time highs of US$4,892.
What’s lifting the Ethereum price?
It’s not just the Ethereum price that’s off to the races today.
Of the top 100 cryptos only one – TerraClassic (CRYPTO: USD) – is in the red over the past 24 hours at the time of writing.
The broad rally follows in the footsteps of a stellar session on the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) yesterday (overnight Aussie time), which closed up 4.1%.
Here in Australia, investor risk appetite also looks to have been spurred, with the S&P/ASX All Technology Index (ASX: XTX) up 1.2%, having earlier posted gains of 3.5%.
And if 2022 has demonstrated anything in the world of cryptos, it’s that they’ve been moving closely in line with other risk assets, like high-growth tech shares.
“Crypto markets are very sensitive to US markets, in particular to monetary policy decisions from the Fed to combat rising inflation,” said eToro’s market analyst and crypto expert Simon Peters.
“The raising of interest rates and rising bond yields have affected US equity valuations and, by extension, crypto markets in recent months.”
Why are risk assets rallying?
If the Ethereum price is shooting higher alongside a broader rally in risk assets, that begs the question, why are risk assets rallying?
The answer lies with the US Federal Reserve’s 0.75% interest rate hike yesterday, the second consecutive outsized rate rise.
While rate increases often depress risk assets, investor sentiment was lifted by comments from Fed chair Jerome Powell, indicating that the pace of future rate hikes from the central bank may soften.
