Ether Surpasses $4,000 Mark Fueled by Dencun Upgrade and Potential ETF Approval
Summary:
Ether's (ETH) price surged beyond $4,000 for the first time since December 2021, fueled by anticipation for Ethereum's pending Dencun update and potential approval of a spot Ether exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC). The Ethereum network's Dencun upgrade is set to implement various Ethereum Improvement Proposals and is scheduled for release on March 13. Despite SEC's delayed decision on Ethereum ETF applications, optimism prevails in the market for a future approval. Institutional investors are also expected to increase Ether holdings, leading to potential price rallies.
Ether's (ETH) price has breached the $4,000 threshold for the first time since December 2021. Data from CoinMarketCap indicates that the price of Ether skyrocketed from $3,873 on March 8, registering a 24-hour increase of over 4% and 74% for the year, surging to a 27-month peak of $4,003 on Bitstamp. This positive trend in Ether’s value is seemingly driven by the anticipation of Ethereum's forthcoming Dencun update and the potential endorsement of a spot Ether exchange-traded fund (ETF) by the US Securities and Exchange Commission.
Ether embarked on its upward trajectory on March 8, as other leading cryptocurrencies demonstrated bullish momentum and Bitcoin (BTC) reclaimed the $68,000 mark. Ether continued in its steady ascent toward the eagerly-anticipated $4,000 threshold, as the crypto community awaits the rollout of the Ethereum network's Dencun upgrade.
Ethereum's Dencun enhancement, the most impactful amendment to the network since the Merge, is set to incorporate several Ethereum Improvement Proposals (EIPs), one of which is EIP-4844 introducing "proto-danksharding". Proto-danksharding is an attribute that enables the blockchain to engage blobs, in turn facilitating transactions by storing some transactional data off the blockchain. This enhances transaction speed and reduces costs for layer-2 chains and rollups relying on Ethereum. The rollout of the Dencun mainnet is slotted for March 13.
Another impetus for Ether's price growth is the optimism that the SEC will greenlight one or more of the pending spot Ether ETFs. Despite the postponement of decisions on spot Ethereum ETF proposals from heavyweights like BlackRock and Fidelity, the market retains optimism that approval is imminent. The decision on all spot Ether ETFs is expected to be announced at the same time to prevent one entity from gaining an unfair advantage over others, similar to the Bitcoin ETFs decision on Jan. 10. The mandated deadline for the SEC to approve or reject an Ether ETF is May 23.
Bloomberg ETF analyst James Seyffart predicts that the handling of Ether ETF applications by the SEC will be swifter than their Bitcoin counterparts. In a Feb. 7 post, Seyffart named May 23 as the "crucial date" for Ether ETFs.
Drawing parallels to the success of spot Bitcoin ETFs since their January 11 launch, a spot Ether ETF is expected to follow suit, allowing more funds to be channelled towards the second-largest cryptocurrency in terms of market capitalisation. Institutional investors will likely amplify their Ether holdings as Bitcoin's recent peak draws less attention, according to Siddharth Lalwani, the Co-founder and CEO of Range Protocol. Lalwani maintains that the shift in interest towards an approved ETH ETF could cause capital to consolidate at elevated levels, driving ETH price hikes from a macro perspective. He anticipates that it won't be long before institutional investors take more significant positions in Ether. However, readers should note that this article does not offer investment advice and every investment decision carries risk necessitating individual research.
Published At
3/8/2024 9:14:32 PM
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