Why Ethereum, Bittensor, and Arweave Are Rising Today

Several cryptocurrencies, including some of the first-ever and new cryptocurrencies, continued their rise today following the Federal Reserve’s 50 basis point interest rate cut last week, which many see as a positive catalyst for the sector.

The price of the second largest cryptocurrency in the world Ethereum (ETH 3.89%) traded 4.4% higher, hovering around $2,358. Meanwhile, several altcoins rose this morning, with the price of Bittensor (TAO 14.83%) and Arweave (AR 14.10%) up 17.4% and nearly 16% respectively.

Capitulation for Ethereum?

In general, most cryptocurrencies benefit from the recent 50 bps rate cut. This is because lower interest rates not only make riskier assets more attractive, but lower interest rates typically result in a weaker US dollar, an environment in which cryptocurrencies have generally performed good

Ethereum’s outperformance may have to do with the fact that it has had more recent divergences from Bitcoin (BTC 0.82%)the largest cryptocurrency in the world. As you can see, Ethereum has significantly outperformed Bitcoin this year.

Ethereum Price Data by YCharts

But that divergence may end soon, according to popular cryptocurrency trader Benjamin Cohen. Cohen, in a YouTube video for his more than 800,000 subscribers, said that based on the charts and what has happened in recent years when the prices of Bitcoin and Ethereum have diverged, a reversal could be on the horizon . Cohen also acknowledged that it is impossible to call when an asset will hit a low or high.

“It doesn’t all have to happen at the same time and I think that’s what a lot of people might forget is that some assets will bottom out against Bitcoin long before other assets bottom out against Bitcoin and that’s all I know right now is that it looks like ETH/BTC is in the final capitulation phase,” he said.

In other news, altcoins like Bittensor and Arweave seem to be riding high on positive comments about artificial intelligence from presidential candidate Kamala Harris. Bittensor is a decentralized network designed for sharing machine learning and artificial intelligence models. Essentially, the network serves as a growing library of AI models that reward people for contributing knowledge. Arweave is a decentralized network that aims to provide permanent file storage for an initial fee. In recent months, a new AI protocol has been built on top of the Arweave network-enabled AI applications to operate within smart contracts on the network.

Harris recently issued some of her first comments on crypto and AI:

Vice President Harris’ first comments on crypto as Dem nominee: “To build this opportunity economy, I will bring together the workforce, small businesses, founders and innovators, and major companies. We will work together to invest in America’s competitiveness, to invest in America’s future. We…

— Jennifer Epstein (@jeneps) September 22, 2024

Monitoring the regulatory landscape

Investors are always evaluating the regulatory landscape for crypto and AI given how new the technologies are. There have already been some big battles between the crypto community and regulators, which creates uncertainty, and new AI regulations are almost a certainty.

Ultimately, I like Ethereum and believe investors can keep the asset in their portfolios given its proven longevity and the technology behind the network. Ethereum is also much more liquid now given the launch of exchange-traded Ethereum spot funds. However, I would caution investors against investing in other altcoins. While I think both Bittensor and Arweave are interesting and exciting projects, they can be even more volatile than traditional cryptocurrencies like Ethereum and are currently highly speculative.