Increased Institutional Interest Fuels Ether Price Surge amid Pending ETF Approvals
Summary:
Ether (ETH) has witnessed a price surge amidst increasing institutional interest in cryptocurrencies. The U.S. Securities and Exchange Commission's (SEC) acknowledgment of Grayscale Investment's Ethereum ETF application has boosted confidence, leading to increased institutional inflows. Despite market dominance by Bitcoin, interest in Ether continues to grow, with seven spot Ether ETFs awaiting SEC confirmation. Ethereum co-founder Vitalik Buterin's strategy to address ecosystem challenges alongside the prospect of a strong U.S. economy and clearer regulations could further drive Ether's price growth.
In the wake of increasing institutional attraction to Bitcoin and the overall cryptocurrency market, Ether (ETH) is experiencing a price surge. The uptick in positive outlook briefly pushed Ether's value over $2,400 on Jan. 2 before it experienced a slight decrease. However, with ETH currently trading above $2,300, it suggests a growing interest in Ether. Over the past twelve months, this particular altcoin has experienced a 97.1% price increase.
The surge in interest in Ether began on Nov. 5, 2023, when the U.S. Securities and Exchange Commission (SEC) recognized Grayscale Investment's request to transform their Ethereum trust into an Exchange-Traded Fund (ETF). This was in response to a legal directive to examine pending Grayscale ETF proposals. Still, the SEC is yet to confirm a spot cryptocurrency ETF. On Dec. 5, 2023, the SEC postponed making a decision concerning Grayscale's spot Ether ETF until Jan. 2024. Also, BlackRock, the world's leading asset manager, filed a request for a spot Ether ETF on Nov. 9, pushing Ether's price to a six-month peak above the $2,000 mark.
At present, seven spot Ether ETFs await confirmation by the SEC. Many market analysts believe that approval for a spot Bitcoin ETF is likely in early 2024 and once it happens, a spot Ether ETF is expected to follow shortly after. The expectation of approval has led to increased institutional capital inflows, with the last week of 2023 experiencing a total of $103 million inflows into crypto products.
The total value locked (TVL) metric, used to gauge the performance of a Proof of Stake (PoS) blockchain like Ethereum, has witnessed a steady increase thanks to liquid staking derivatives such as Lido. As of Jan. 2, Ethereum's TVL has risen by 3.7% to $29.8 billion, with Lido accounting for more than 73% of all staked assets.
However, Bitcoin continues to hold its position as the market leader heading into its supply halving in April 2024. Even as Bitcoin dominance remains above 50%, it has experienced a fall since it peaked at 54% on Dec. 6, 2023. This usually results in a move towards altcoins and other cryptocurrencies.
Vitalik Buterin, Ethereum's co-founder, recently detailed his 2024 plan to address the ecosystem's shortcomings. Despite the market's current robust state, large-scale factors like future rate increases and potential US regulatory clampdown on the crypto sector could impact Ether's price. However, a spot Bitcoin or Ether ETF approval, clarifications in regulatory stance towards crypto, and a strong U.S. economy could act as triggers for price growth. This report doesn't provide investment advice or recommendations; readers need to carry out personal research and understand the associated risks before making decisions.
Published At
1/2/2024 9:59:50 PM
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