What happened
In the latest bullish turn in the crypto market, most major cryptocurrencies are catching a bid once again today. However, despite an impressive 10.7% increase in the overall crypto market today, specific tokens are vastly outperforming.
One of the key broader market-related catalysts that’s again at play today is Ethereum‘s (ETH 8.81%) upcoming merge. This merge, which has a tentative rollout date of Sept. 19, will see Ethereum’s blockchain merge with its proof-of-stake Beacon Chain, as this network transitions away from the energy-intensive proof-of-work mining that many older cryptos employ.
This key upgrade has sent Ethereum Classic (ETC 32.23%), Lido Staked Ether (STETH 8.20%), and Bitcoin SV (BSV 9.33%) surging 43.9%, 13.4%, and 15.6% over the past 24 hours, as of 2:30 p.m. ET. These moves not only outpace the broader market, but the move in Ethereum itself, which appreciated 13.1% over this time frame.
So what
For Ethereum Classic, this merge provides a key catalyst, at least in terms of interest. Often looked at as Ethereum’s under-loved and under-respected sibling, Ethereum Classic is a fork of the Ethereum blockchain that came about as a result of an internal dispute among developers within the Ethereum team. Ethereum classic will remain proof-of-work, and as such, is now being viewed as a safe haven of sorts for Ethereum miners looking to pivot.
Positive comments about Ethereum Classic from Ethereum founder Vitalik Buterin, as well as a sizable investment from a prominent crypto miner, are other drivers investors are viewing positively today.
Lido Staked Ether is a bit of a different animal, in that this project directly benefits from the Ethereum merge. The Lido DAO (LDO 32.98%), which is behind its stETH token, allows smaller investors to, in effect, crowdsource their Ether to stake on the Beacon Chain. Currently, 32 Ether (roughly $55,000) are required to take part in the staking process. This reality prices out many investors, who look to liquid staking solutions such as Lido to participate.
The only downside with locking in Ether on Lido is that investors must do so for a specified period of time. Said investors receive stETH, a coupon of sorts that can be redeemed for Ethereum at a future date. In the meantime, investors earn yield on their staked Ether.
With the Ethereum merge now having a date, investors can lock in their Ether with more certainty, knowing their investment won’t be locked in forever. Accordingly, the differential between stETH and Ether has narrowed to only 3%, which is the lowest it’s been in some time.
Finally, Bitcoin SV is a rather interesting project in that this is a fork of the Bitcoin blockchain. Like Ethereum Classic, investors looking for alternatives to their favorite blockchains are seeing outsize gains in this space. Bitcoin SV’s focus on creating a peer-to-peer electronic cash system has been slow to pick up, but is a growth area of the market that’s seemingly of greater interest right now.
Now what
That’s a lot to take in. However, for investors looking for Ethereum alternatives, it’s clear that there are a number of options out there. Not only that, but these alternatives are outperforming the “real deal,” to a significant degree.
The extent to which this run can continue remains to be seen. However, the underlying catalyst driving this move will be in play for another seven weeks or so. Accordingly, there’s a window of opportunity here that traders are key to capitalize on.
Chris MacDonald has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Lido DAO. The Motley Fool has a disclosure policy.