Markets
First Bitcoin, Now ETH ETFs: What’s Next for the Market?
ETH ETF products are expected to begin trading this summer, fueling current market optimism. Institutional Market Data Provider Kaiko published a report, predicting that Ethereum will overtake Bitcoin after the launch of Ether spot ETFs. The current discussion focuses on whether Ethereum can reach $5,000 by the end of 2024.
This year, spot Crypto ETFs Bitcoin ETFs have dominated the markets, attracting billions of investors. The approval of Bitcoin spot ETFs on January 11 sparked renewed optimism in the market, paving the way for Ethereum. The success of Bitcoin products has increased investor interest in Ethereum, propelling cryptocurrency prices to new highs.
Why is the market optimistic about Ethereum’s future?
Just as today’s web is the result of countless contributions from a wide range of programmers, Ethereum is the product of the innovative efforts of thousands of individuals, each contributing unique ideas. These pioneers work tirelessly on various facets of blockchain technology, decentralized applications, smart contractsand more. Their collective ingenuity and dedication are driving Ethereum’s continued evolution, making it a powerful, decentralized platform that is reshaping industries and paving the way for the future of Digital Finance and beyond.
Cryptocurrency Tracking
Traditional investors are increasingly attracted to Ethereum due to its smart contract functionality and the many decentralized applications (dApps) in its ecosystem. The Ethereum ecosystem is home to over 4,000 dApps and millions of smart contracts. With the growing adoption and utility of Layer 2 solutions within the Ethereum ecosystem, these numbers are expected to increase significantly in the coming years.
According to the latest data, the total value locked (TVL) in Ethereum Layer 2 Networks Ethereum transaction volume has reached an all-time high of $47 billion, a tenfold increase since March of this year. This milestone highlights the growing importance of Layer 2 solutions within the Ethereum ecosystem. Arbitrum One leads the way with a TVL of nearly $19 billion, followed by OP Mainnet and Base, each surpassing $6 billion. Other networks including Blast, Mantle, Linea, and Starknet also have TVLs exceeding $1 billion.
Can Ethereum Hit $5,000 By The End Of 2024?
The introduction of ETFs is crucial because they attract institutional investors Bitcoin ETFs have already established a positive narrative in the market, with over $50 billion invested in 10 newly launched Bitcoin ETFs within five months of their launch. Institutions already invested in Bitcoin ETFs are likely to diversify into these newly approved Ethereum ETFs. If Ethereum ETFs see similar success, substantial institutional investment combined with bullish speculative trading could drive ETH prices to new all-time highs.
According to media sources, VanEck, a global fund manager, has expressed optimism about the future potential of Ethereum Layer 2 networks. The firm predicts that these networks could reach a valuation of over $1 trillion by 2030.
Additionally, Ethereum’s upcoming Pectra upgrade, scheduled for Q1 2025, is expected to be a major milestone for the network. This upgrade will further help Ethereum maintain its leadership in dApps and smart contracts, thereby advancing the broader blockchain industry.
Building on the success of the Dencun upgrade, Pectra aims to improve the efficiency and functionality of Ethereum through various Ethereum Improvement Proposals (EIP), including EIP-3074. This proposal introduces features such as batched transactions, allowing users to log into a transaction only once regardless of its complexity, improving transaction management and wallet usability. Additionally, Pectra aims to streamline network operations, reduce transaction costs, and simplify complexities. A notable aspect of EIP-3074 is its “social recovery” feature, allowing users to regain access to their crypto wallets without relying on seed phrases.
Ethereum is on a strong bullish trajectory and is currently trading around $4,000. Its current momentum suggests that it is well positioned to maintain and potentially continue its rally.
Overall positive signs for the cryptocurrency market
With the introduction of Bitcoin and ETH ETFs, the floodgates have opened for more cryptocurrency exchange-traded products, including the possibility of a Solana-based ETF. This rise of crypto ETFs marks a shift in perception, with cryptocurrency no longer seen as just a speculative asset but as a fundamental part of investment portfolios. The increased involvement of financial institutions adds further credibility to crypto assets.
This broader acceptance should drive mainstream adoption and reflects a maturing regulatory environment, which in turn helps legitimize the entire digital asset space.
(Author Sumit Gupta is co-founder of CoinDCX. Opinions are his own)
(Disclaimer:The recommendations, suggestions, views and opinions expressed by the experts are their own. They do not represent the views of the Economic Times)