Ethereum's Ether Sees Major Upturn Amid Soaring Institutional Interest and Anticipated ETF Approval
Summary:
Ether, the native cryptocurrency of the Ethereum network, is witnessing significant growth due to rising institutional interest. The price of Ether has increased by 23.7% in the last month and 96.5% year to date. The U.S. Securities and Exchange Commission's (SEC) acknowledgment of Grayscale Investment’s application for an Ethereum trust ETF and BlackRock's filing for an Ether ETF have sparked further interest. Increased daily fees and revenue in Ethereum's DeFi ecosystem, and a record inflow of institutional capital over the past ten weeks, alongside the expectation of an approved Ethereum ETF, have contributed to Ether's price surge.
Ethereum's native currency, Ether (ETH), is experiencing strong growth due to the accelerated institutional interest in the world’s second-largest cryptocurrency. A surge in bullish reactions has seen a 23.7% uptick in Ether's price in the last month, trading above $2,300, hinting at the shifting focus towards Ether. The ETH price has witnessed a 96.5% rise year to date.
One of the core reasons for Ether's price increase is the soaring institutional interest, with traders eagerly waiting for an ETH spot ETF. The U.S. Securities and Exchange Commission (SEC), following a court order, acknowledged Grayscale Investment's application to transform its Ethereum trust into an ETF on Nov. 1, boosting traders' interest. Yet, the SEC is yet to give the green light to a spot crypto ETF. On Dec. 5, the decision on the Grayscale Ether ETF was postponed until January 2024 by the SEC. BlackRock, the largest asset manager globally, filed a proposal for an Ether ETF on Nov. 9, pushing Ether price to a six-month peak above $2,000. As of Dec. 7, the SEC received a total of seven filed Ether ETFs, pending approval.
Many experts expect the SEC to approve a spot Bitcoin ETF first in 2024. The narrative that Ether may turn bullish ahead of an ETH spot ETF's approval has gained traction in the past few weeks. This shift in focus is also due to Bitcoin's price experiencing resistance at the $45,000 mark.
The prospects of an approval have led to surging institutional capital inflows. Over the previous ten weeks, there's been a total inflow of $1.76 billion, marking a record high since October 2021. This impressive inflow also resulted in Ether's net flows hitting a first-time high of $10 million this year, and $30 million in the last week.
Increased daily revenue and fees have also been observed in Ethereum's DeFi ecosystem, reaching a six-month peak on Dec. 7. Parallel to Ether's price surge, fees have soared over 155% in a month, resulting in a 178.2% rise in Ethereum network revenue in the past 30 days, totaling $2.92 billion on an annualized basis.
The Ethereum network's expansion has escalated gas fees and made the network deflationary again. The Ether coin supply is on track to reduce by -0.47% annually, considering the sustained activity growth over the past month.
Although Ether managed to pass the crucial $2,300 mark, Bitcoin's 162% year-to-date gains overshadow it. Despite short-term sales, trading volume boost has allowed Bitcoin to maintain the $40,000 bracket. Bitcoin remains to rule the crypto market ahead of the supply halving in April 2024. On Dec. 7, Bitcoin's dominance hit a yearly peak of 53.89% against the overall crypto market.
Analyst Jacob Canfield opines that the ETH/BTC pair experienced a strong daily candle and indicates a possible run up to the $3,300 - $3,500 zone.
However, global considerations like potential interest rate hikes and the possible U.S. clampdown on the crypto sector may slightly put pressure on Ether's price. Nevertheless, factors like an approved spot Bitcoin or Ether ETF, clear regulatory stance on cryptocurrencies, and a robust U.S. economy could serve as catalysts for price progress. Please note this article does not offer investment advice or recommendations, and every investment or trading action involves risk. Readers should carry out their research before making a decision.
Published At
12/7/2023 10:47:20 PM
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