Bitcoin’s recent wobbles have turned the cryptocurrency spotlight onto other digital coins including Ether, whose gain this year has outstripped the performance of its bigger rival.

The world’s largest cryptocurrency hovered around US$37,000 ($49065.33) on Jan 19 after major gyrations earlier in January. The comparative calm of late may encourage crypto enthusiasts to chase the momentum in coins like Ether, which is up almost 90% in 2021 compared with Bitcoin’s 27% advance.

“Bitcoin has been in a range for the past few weeks, which gives time for capital to rotate” into other digital assets, said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.

Questions abound about the drivers of the parabolic surge in Bitcoin to almost US$42,000 on Jan 8 before a sharp pullback. A study by Bloomberg Economics suggests animal spirits account for the bulk of the move, while Bitcoin’s claimed role as a hedge against risks such as inflation is secondary.

See: Is the bitcoin rally over?

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A backdrop of stimulus to counter the impact of the pandemic remains a positive one for Bitcoin and other cryptocurrencies, according to Seamus Donoghue, vice president for sales and business development at digital infrastructure provider Metaco.

At the same time, JPMorgan Chase & Co. strategists have said US$40,000 is a key level for Bitcoin, flagging the risk of a further drop unless it climbs back above that price soon. Bitcoin has declined 8% from the Jan 8 record, raising the prospect of an exodus of speculative investors.

The Ethereum blockchain is popular for so-called decentralised finance and is also making progress toward a network upgrade. Commentators argue these trends have aided Ether.

Ether climbed 13.4% to about US$1,400 as of 8.14am in New York. The Bloomberg Galaxy Crypto Index added about 14%.