Cryptocurrencies Are Holding Their Ground as Potential Positives Mount

Bitcoin Dominance Soars as Tesla Shifts Attention Away from Altcoins

Cryptocurrencies have been sitting quietly for most of the year as investors digest potential positives like Ethereum’s pending upgrade and more institutional adoption.

Bitcoin and Ethereum, the two biggest digital assets, are little changed since the first week of January. That stands in sharp contrast with stock indexes like the S&P 500 and Nasdaq-100, which fell through last week and then sharply rebounded. Even Russia’s invasion of Ukraine on February 24 had little impact on cryptos.

One of the big stories this week was a report from CoinDesk that Bridgewater Associates was planning to back a cryptocurrency fund. Bridgewater is the world’s biggest hedge fund, founded by visionary billionaire Ray Dalio.

Next, the Terra project is adding to its Bitcoin reserves. Founder Do Kwon tweeted this week that Terra wants to hold $3 billion of Bitcoin in the near term. He sees that amount more than tripling to $10 billion over the longer term. Terra runs the stablecoin Tether and is backed by the LUNA governance token.

Bitcoin Miners Surge

TradeStation data also shows strength in crypto-related stocks. Bitcoin miners Marathon (MARA) and Riot Blockchain (RIOT) together rallied 26 percent last week. It was their biggest weekly gain in over a year.

Bitcoin, daily chart with 50-day moving average, tightening range and Bollinger Band Width.

That could be a positive signal for digital assets because equities associated with a product often lead movements in the underlying commodity. That was the case with energy stocks and gold miners recently.

Ethereum 2.0

Ethereum, the No. 2 digital asset by market value, is also in the process of a key upgrade. Last week, Ethereum performed an important merging test on its Kiln testnet. Once complete, Ethereum will use proof-of-stake validation instead of “proof of work.” That change will encourage network operators to hold their coins rather than selling them, potentially reducing supply.

Along with other changes like sharding, developers hope to complete the upgrade this summer.

The price ratio of Ethereum to Bitcoin increased after the latest test. It’s now back to a one-month high of 0.071, but remains below December’s peak of 0.088.

Puerto Rico

Another development is TradeStation Crypto‘s entry into Puerto Rico starting today. The Caribbean territory joins more than 30 U.S. states including Florida, New Jersey and Texas, where customers can access digital assets. They can also trade traditional products like stocks, options and futures via TradeStation Securities.

TradeStation Securities is a licensed broker-dealer subject to FINRA and NFA. TradeStation Crypto offers self-clearing crypto brokerage services but isn’t subject to NFA’s oversight and examinations. Investing in cryptocurrencies involves significant risks. See the Investment and Trading Disclosures Booklet for more information on investing and trading in cryptocurrencies.

The move into Puerto Rico brings TradeStation Crypto to a community already population with blockchain investors. The island has supported cryptocurrency investors with favorable tax rates on capital gains. The last two years has also seen developers and digital entrepreneurs relocating to Puerto Rico, according to reports in The New York Times and CNBC.

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