Ethereum
Ethereum ETF sparks optimism: Analysts predict gains
Big news for Ethereum Fans! The wait is almost over: an ETF directly holding Ether (ETH) is expected to launch in the United States soon. This has the crypto community buzzing, and for good reason. A report from crypto analytics firm K33 Research predicts that this ETF could attract a whopping $4 billion in the first five months alone! Could this be the tipping point for Ethereum?
Read on to find out what the experts are saying and what impact this ETF could have on the price of ETH.
Big money talks!
Search K33 based its prediction on funds managed by existing ETH-based exchange-traded products around the world, comparing them to similar products for Bitcoin (BTC). They also looked at the volume of futures contracts traded on the Chicago Mercantile Exchange (CME), an important indicator for large investors.
Will Ethereum outperform Bitcoin?
Adding to the optimism, a crypto analyst recently tweeted about Ethereum’s potential to outperform Bitcoin in the second half of this market cycle. They highlighted five main reasons why ETH could be a better investment than BTC, especially after recent developments such as the merger, EIP-1559 and the introduction of ETH ETFs.
Here’s why ETH could defeat BTC:
Reduced operating costs for validators – Ethereum validators have low operating costs, so they don’t need to sell as much ETH. Bitcoin miners, on the other hand, often sell BTC to cover their high costs.
Token Incentives – Bitcoin pays around $43.8 million per day to miners, creating significant selling pressure. On the other hand, Ethereum’s daily payout is around $7.2 million, which represents $36.6 million less potential selling activity.
Token burning mechanism – With the implementation of EIP-1559, approximately 80% of user transaction fees are burned, reducing the overall supply of ETH, while the remaining 20% contributes to the operation of the network. It is different from Bitcoinwhich has a fixed supply.
Locked Supply – Nearly 40% of ETH is “soft locked” in DeFi services or as collateral, reducing its circulating supply. This helps stabilize the price and may cause the price to rise.
Higher Onchain Activity – Ethereum supports various activities such as DeFi, Layer 2 solutions, gaming, and NFTs. When network usage is high, more ETH is burned, making it more scarce and potentially increasing its value.
Ethereum: eyes on the price!
Following the approval of the ETH spot ETF, Ethereum broke out of a multi-month downtrend. Crypto analyst Jelle suggests that if ETH rises above $4,000, it could reach $10,000.
Currently, ETH has managed to regain the $3,810 price range and briefly test the $3,900 range, with a market cap of $457 billion. The coming months will reveal whether Ethereum can capitalize on these promising developments and reach new highs.
Also discover: Macro guru Raoul Pal reveals his ‘biggest’ coin bets; He Says “Dogecoin Should Be the Next ETF”