Ethereum
Why Ethereum and AI Tokens Might Be Your Best Bet in Q3
- Ethereum is poised for a positive quarter according to new research.
- AI tokens have dominated the social space and have seen positive performance since the start of the year.
Ethereum [ETH] and AI tokens have seen positive developments in recent months.
Interestingly, Grayscale Research believes that the next quarter will be heavily influenced by the recent approval of Ether spot exchange-traded products (ETPs) in the US market.
This is a significant step forward since the Securities and Exchange Commission (SEC) gave the green light to the filing of Form 19b-4 in late May, allowing several issuers to list these Ether ETPs on US exchanges.
ETPs to help ETH
Grayscale’s market analysis assumes that ETPs will begin trading in Q3 2024.
Similar to the successful launch of Bitcoin spot ETPs in January, Grayscale Research predicts that these Ether products will attract significant net inflows, although likely to a lesser extent than their Bitcoin counterparts.
This could potentially translate into price support for Ethereum itself and for tokens within its ecosystem.
The launch of spot Ether ETPs is expected to put more emphasis on the unique features of the Ethereum network. Unlike other blockchains, Ethereum uses a modular design approach, where different infrastructure components work together to optimize user experience and reduce costs.
Additionally, Ethereum has the largest decentralized finance (DeFi) ecosystem in the crypto space and is a hub for tokenization projects.
Increased interest and adoption of Ethereum fueled by ETP approval could lead to increased activity and support for the valuation of specific layer 2 tokens such as Mantle, major DeFi protocols like Uniswap, Maker, Aave and other crucial assets within the Ethereum network such as Lido, a staking protocol.
A key factor that could show how much interest in Ethereum has grown could be how resilient the price of ETH has remained while BTC prices have fallen.
Although ETH and BTC are highly correlated, recent market declines have not had as severe an impact on ETH as they have on BTC.
Source: Santiment
Although spot Ether ETPs represent a major development, Grayscale Research predicts that other ongoing market themes will remain relevant over the next quarter.
One of the main areas of focus will be the potential for blockchain technology to intersect with the field of artificial intelligence (AI).
Do AI tokens work well?
According to recent data, AI tokens are the ones that are dominating the social media landscape the most.
Source: Grayscale Research
Additionally, AI-based tokens such as RNDR, TAO, and FET have also outperformed the overall crypto sectors market index in terms of price performance since the beginning of the year. If the hype around AI tokens continues, it could yield positive results for holders.
Source: Grayscale