(Bloomberg) — Bitcoin rose to $70,000 for the first time, before quickly retreating as traders appear to be already shifting their attention elsewhere for higher returns in fringe tokens known as memecoins.
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Tokens such as Dogecoin and Pepe posted double-digit percentage gains on Friday, adding to the eye-popping rallies seen throughout the week. Ether, the second-largest cryptocurrency by market value, is up about 16% so far this week, or more than double its larger peer.
“As Bitcoin consolidates at current levels and ETH relatively outperformed in the short-term, eyes are sure to be focused on altcoins and specific side-narratives that start to spin up,” said Chris Newhouse, a DeFi analyst at Cumberland Labs.
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After reaching $70,000 on Friday, Bitcoin quickly pared gains to trade around $68,000. Ether was approaching $4,000 for the first time since December 2021.
“I think $80K by end of month is not crazy,” said Leo Mizuhara, founder and chief executive of decentralized-finance institutional asset management platform Hashnote. “I just think the FOMO players are coming in soon. ETFs have opened up the space to even more retail.”
Ether is benefitting from rising expectations that the token will be the next to win approval from the US Securities and Exchange Commission to be offered through exchange-traded funds. Surging demand for the Bitcoin ETFs approved in January have been the main catalyst for this year’s more than 60% rally in the token.
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Memecoins have long been a phenomenon among retail crypto investors and promoters, who see the microscopic prices as an opportunity to quickly post huge returns despite the lack of traditional fundamentals. The token Shiba Inu was considered the most popular in the last bull market, while Dogecoin is viewed as the original memecoin by many in the industry. Traders are positioning PEPE, WIF and other newcomers as the next big opportunity.
“As capital continues to be deployed across the private markets, retail has started to notice emerging narratives to take note of when an eventual ‘altcoin season’ emerges off the back of a potential rotation out of ETH and across the broader ecosystem,” Newhouse said.
Read more: Crypto Exuberance Hits Overdrive as SEC Battle Over Ether Looms
–With assistance from Muyao Shen.
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