Why the Ethereum price slipped but still outperformed Bitcoin in August

The Ethereum (CRYPTO: ETH) price is slipping on its first day of the new month, down 3.4% to US$1,552 (AU$ 2,286).

That comes amid a wider market sell-off that’s hitting risk assets particularly hard this week, as investors eye the prospect of further interest rate hikes ahead to combat inflation that’s now looking to be more sticky than transitory in the medium term.

That’s how the world’s number two crypto is moving today.

But how did it fare in August?

Ethereum price falls buffered by the upcoming Merge

The Ethereum price kicked off August trading for US$1,687 (depending on your time zone) and ended the month at US$1,592.

Highlighting the ongoing volatility crypto investors need to be comfortable with, Ethereum traded as low as US$1,428 and as high as US$2,022 over the month, according to data from CoinMarketCap.

All up, the token fell 5.6% in August. While a loss is a loss, the Ethereum price didn’t fare much worse than the tech-heavy NASDAQ, which slumped 4.6% in August. And outperformed the Bitcoin (CRYPTO: BTC) price, which fell more than 14% over the month.

Ethereum looks to be getting some helpful tailwinds from the upcoming Merge, which could finally go from years of testing to live use later this month.

If you’re not familiar, the Merge will transition the Ethereum blockchain transition from proof of work (POW) to proof of stake (POS). POW protocols require a lot less computing power, reducing transaction costs, increasing efficiency, and producing far fewer carbon emissions.

Commenting on how the Merge was impacting crypto investor behaviours in August, eToro’s market analyst and crypto expert Simon Peters said:

In terms of how the market is reacting there is now obvious evidence that it is becoming more actively sensitive to developments on The Merge. The [Ethereum]price has been on an upward trajectory and has reacted positively to developments as investors buy into the token ahead of the change.

The post Why the Ethereum price slipped but still outperformed Bitcoin in August appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum and Bitcoin. The Motley Fool Australia has positions in and has recommended Ethereum and Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.   

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