Ethereum (ETH) hit a fresh all-time high of $1,542.99 on Tuesday evening while the top cryptocurrency by market cap — Bitcoin (BTC) jumped over 6.4% at press time.
What Happened: ETH traded 9.71% higher at $1,520.59, while BTC was up 6.48% at $35,999.01 at press-time.
— Tyler Winklevoss (@tyler) February 2, 2021
On Tuesday, Grayscale Bitcoin Trust (OTC: GBTC) closed 8.39% higher at $36.80 and the Grayscale Ethereum Trust (OTC: ETHE) closed 15.6% higher at $17.71.
Most altcoins followed the lead of the apex cryptocurrency and traded in the green at press time. XRP jumped 5.34% at $0.38, while Polkadot (DOT) was up 4.37% at $17.08.
Two Decentralized finance cryptocurrencies were outlier to the bullish trend — Uniswap (UNI) was down 5.32% at $18.99 and SushiSwap (SUSHI) traded lower by 1.41% to $12.73 at press time.
DeFi cryptocurrencies have seen smart gains in the recent past, even as Bitcoin remained muted.
BTC supply is “drying up” according to Glassnode, which pointed to Grayscale Holdings acquiring 40,000 BTC so far in 2021, while only 26,000 BTC have been mined.
Why It Matters: Institutional appetite for BTC is significant this year, as per Glassnode.
“2021 has seen the largest sustained decrease in bitcoin’s liquid supply in the history of BTC,” wrote the blockchain and data intelligence provider.
The number of whale entities — clusters of wallet addresses holding at least 1,000 BTC — rose to 2,218 on Sunday, which is a new high, CoinDesk reported.
Meanwhile, DeFi investing opportunities has led to reserves of BTC and ETH held on exchanges falling to multi-year lows, which is removing sell-side liquidity off the markets, according to CoinDesk.
Pantera Capital — an investment fund focussed on digital currency — said in a tweet Tuesday that despite ETH hitting a new all-time high they believe both it and DeFi assets built on top are “undervalued relative to their long-term potential.”
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