Ether (ETHUSD, -2.56%) has been surpassing bitcoin this year. Despite being further from its all-time high compared to bitcoin (BTCUSD, -1.81%), the second-largest cryptocurrency is still down by over 40% from its peak of $4,686. In contrast, bitcoin is down by around 26% from its all-time high of $68,990, based on CoinDesk data from November 2021.
Bullish Forecast for Ether
According to Jeff Owens, co-founder of layer1 blockchain Haven1, ether is likely to hit a new record high this year. The upcoming Ethereum network upgrade on March 13, known as Dencun, is anticipated to bring significant changes to the blockchain. This upgrade aims to reduce transaction costs by providing dedicated data storage space for networks built on top of Ethereum.
Furthermore, the potential approval of exchange-traded funds directly investing in ether could act as a catalyst for the cryptocurrency to reach new heights. Asset managers like BlackRock, Franklin Templeton, VanEck, Grayscale Investments, Ark Invest, and 21Shares have all submitted applications for spot ether ETFs pending approval from the U.S. Securities and Exchange Commission.
James Seyffart, ETF research analyst at Bloomberg Intelligence, believes that May 23 is the critical date to monitor for the future of spot ether ETFs. This date marks the final deadline for the SEC to make a decision on VanEck’s ether ETF application.
Ether ETF Approval Forecast
Martin Leinweber, digital asset product strategist at MarketVector Indexes, suggests that the approval of ether ETFs by the SEC is more likely to happen in the second half of this year, rather than in May. Leinweber highlights that the path for ether ETFs is less clear compared to bitcoin ETFs.
SEC’s Stance on Cryptocurrencies
SEC Chair Gary Gensler has emphasized that he only identifies bitcoin as a commodity among cryptocurrencies.
Competition for Ethereum
Ether’s price faces challenges as Ethereum competes with other blockchains like Solana. Supporters of Solana argue that its network is faster and cheaper than Ethereum.
Potential for Smaller Cryptocurrencies
Smaller coins have been trailing behind bitcoin and ether in terms of market cap performance this year. In crypto bull markets, bitcoin typically leads the rally, with smaller coins performing well later on.
Recent Performance
Bitcoin has increased by 1.6% in the past week, while ether has surged by 8.8% during the same period based on CoinDesk data.
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