Ethereum Outshines Bitcoin Amid Anticipation of Spot Ethereum ETFs Approval
Summary:
Despite starting the year strong, Ether (ETH) started to decline in mid-March but regained momentum in mid-May due to expectations of U.S. approval for spot Ethereum ETFs. With its official approval by the SEC on May 23, ETH has outperformed Bitcoin (BTC). Contributing to ETH's impressive performance are factors such as escalated network activity and growing excitement over the launch of spot Ethereum ETFs. Upcoming Ethereum ETFs on the market contribute to ETH's momentum, with some speculating that ETH prices could reach an all-time high of $10,000 this cycle.
Ether (ETH) kick-started the year with a robust performance but started to decline in the middle of March. Yet, during mid-May, the altcoin's momentum picked up, prompted by expectations of United States approval for spot Ethereum ETFs. Even though ETH has been lagging behind Bitcoin (BTC) since the beginning of the year, it has performed better ever since the American Securities and Exchange Commission (SEC) formally approved spot Ether ETFs on May 23. ETH has seen a growth of around 30% since May 15, compared to BTC's 9% rise in their U.S. dollar pairs.
Three primary factors have contributed to ETH's outperformance over BTC in recent days. These include increased network activity, heightened excitement surrounding the launch of spot Ethereum ETFs, and a general growth trend. Over the last 10 days, Ether has seen a growth of 23%, outperforming Bitcoin and other top layer-1 tokens. Bitcoin's price has only risen by 2% over the past 30 days; other notable layer-1 tokens like BNB Chain's BNB and Solana's SOL have increased by 3.35% and 1% respectively during the same period.
The ETH/BTC ratio began its ascent on May 17, reaching a two-week peak of $0.05854 on May 23, a 31% rise. From a technical perspective, the weekly ETH/BTC chart showed a bullish divergence from the relative strength index. This divergence indicated a possible "trend reversal," as highlighted by trader and founder of MN Trading Michaël van de Poppe.
Ethereum's network activity and implementation of scaling solutions assist in boosting its performance. Over the past week, data from DappRadar showed a 7.75% increase in transaction volume among leading Ethereum DApps, driven by reductions in Uniswap, Eigenlayer, MetaMask, and Banana Gun. Additionally, the number of unique smart contracts on Ethereum went from 37,870 on May 20 to 38,066 on May 31, as per CryptoQuant.
In addition to the solid on-chain metrics, the potential introduction of Ethereum ETFs in the market soon adds to ETH's growing momentum and enhancing strength against Bitcoin. Eric Balchunas, Senior ETF Analyst at Bloomberg, bets these investment products have a real chance of being launched by late June, following BlackRock's key filing update necessary for the launch.
There's buzz among market participants that the debut of spot Ethereum ETFs will help ETH touch new record highs, with Wall Street considering it as a wager on the growth of Web3. Others speculate that the ETH price could reach the $10,000 mark in this cycle as institutional capital gets channeled into Ether ETFs. This article and any content mentioned herein are not endorsed by Cointelegraph, and readers should do independent research before making decisions related to any product or company mentioned, taking full accountability for their choices.
Published At
5/31/2024 8:11:42 PM
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