Bitcoin (BTC), the largest cryptocurrency by market capitalization, is steadfast and mundane, said Michael Safai, managing partner at financial services firm Dexterity Capital. But that’s a good thing.
“Bitcoin’s going to be the boring old grandpa right now in the room,” Safai told CoinDesk TV’s “First Mover” on Friday referring to why, during these uncertain economic times, bitcoin’s rally may be due to its simple, more familiar story.
Certainly a lot of the excitement in the crypto market is happening in ether, the second-largest cryptocurrency by market capitalization, he noted.
On Wednesday Ethereum underwent its Shanghai upgrade, also known as Shapella. The blockchain’s upgrade raised questions about whether there would be major sell-offs. Instead, ETH’s price inched above $2,000 two days after the long anticipated upgrade, beating out bitcoin in options trading, for the first time this year.
While the upgrade allows users to withdraw the ETH they’ve staked (as well as reducing fees and opening space on the blockchain for more transactions), Safai pointed out that “a lot of things are happening” with ether, including allegations from U.S. government officials who say it is a security and should be regulated as such.
Bitcoin, on the other hand, is sidestepping the “chaos of all the investigations,” he said. For now, at least, it appears the U.S. Securities and Exchange Commission is comfortable with treating bitcoin as a commodity, unlike its view of ether.
With Ethereum’s upgrade, the “rules of the game have just changed,” Safai said. It may also be the reason there is excitement in the markets from users.
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“We’re seeing more activity on the options side and I expect that to continue,” he said.