CME Erik Norland, executive director of CME, said that in the ETH/BTC pair, the above factors have a greater impact on the change in the value of ether. This is due to the fact that Efirium’s smart contract network has more practical applications, while bitcoin is more often used as a “highly volatile means of saving and protection against fiat devaluation”.
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“Because ETH has more practical utility, ETH shows a greater upward trend than bitcoin when tech stocks from the Nasdaq 100 are rising. A fall or strengthening of the US dollar is also more significant for the ETH exchange rate. That said, on days when BTC shows a rise or fall, the value of ETH tends to change in even greater proportion,” explained Erik Norland.
The analyst says the ETH/BTC pair shows almost zero correlation with changes in interest rates, as well as gold and crude oil futures. Nevertheless, there is a strong correlation between changes in cryptoasset prices and movements in large technology stocks, the dollar and the price of S&P 500 Technology Select Sector futures.
Analyzing the correlation between the prices of the leading cryptocurrencies by capitalization, the CME Group expert said that, according to research, it fluctuated at around 0.85 last year, indicating that the two assets are very closely linked.
Vitalik Buterin, co-founder of Efirium, believes Bitcoin needs scalable second-tier solutions – to become something more than just a payment network.