Why Ethereum and Axie Infinity Popped While Dogecoin Dropped Today
The value of most cryptocurrencies jumped again on Friday to end an outstanding week for the value of crypto.
Ethereum (CRYPTO:ETH) was the largest cryptocurrency to make a big move, climbing 5.9% over the last 24 hours to $4,440. Dogecoin (CRYPTO:DOGE) actually dropped 7.6% as it has fallen out of favor with meme crypto investors. Axie Infinity (CRYPTO:AXS) jumped a whopping 19.2% in a big metaverse bet by traders.
The biggest news of the day is that the Ethereum 2.0 Altair Beacon Chain update was done successfully with 98.7% of nodes upgraded as of early Friday. This upgrade is seen as a precursor to the Beacon Chain merging with the Ethereum mainnet, which would move to a proof-of-stake consensus in Ethereum 2.0.
Long term, this should lower the energy consumption for Ethereum transactions and reduce costs. As Ethereum tries to find more utility use cases, this would be a positive move for the cryptocurrency.
Axie Infinity is a token that’s used in a blockchain-based game where users can collect and build using the cryptocurrency. This may have gotten a boost when Facebook announced that it’s going to rebrand itself “Meta” and is going all-in on building the metaverse. Axie Infinity was a natural crypto for traders to pile into, even if there’s no indication Meta will use it anytime in the future.
Slowly but surely, the Ethereum network is maturing, and that could help it attract more users, thereby increasing its value. But like most cryptocurrencies, it continues to be volatile as well. This week that worked in investors’ favor with Ethereum up 9%.
Dogecoin has had a bad day, but that’s in part because it’s coming off a large jump in trading Thursday afternoon. Doge traders bid up the crypto’s value as Facebook introduced its Meta name, a mover that is quickly wearing off. But the cryptocurrency is also up 19.1% over the last seven days.
Axie Infinity has had a little more of a Meta-induced move with its value increase coming primarily in the last 24 hours. If the metaverse is indeed going to gain widespread adoption, it will need a currency. At least in one corner it’s possible that Axie Infinity will be that currency. But it’s still not a top cryptocurrency today, so that’s a long shot.
In general, this week’s news was largely positive for cryptocurrencies. Facebook’s move into the metaverse could lead to more use cases, while Ethereum improving efficiency should help with one of crypto’s downsides, which is energy consumption. For this week, the news was bullish, but crypto investors know that this is a volatile space and next week the trade could move in the opposite direction.
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