Ether Poised to Shine as Bitcoin ETF Hype Subsides
Ether is set to take center stage in the coming month as bitcoin and newly launched bitcoin exchange-traded funds (ETFs) have dominated the attention of crypto investors in January. Both bitcoin and ether are on track to finish the month with a 0.01% increase, according to Coin Metrics. The price swings seen in January were driven by hype surrounding the launch of the first spot bitcoin ETFs in the US, followed by flows into and out of these funds after they began trading on January 11. However, now that the outflows have slowed down, bitcoin’s outlook for the year remains strong due to factors like the upcoming halving and potential rate cuts.
While bitcoin has been receiving institutionalized flows through ETFs, ether and other altcoins have been preparing for a breakout. With the easing of sales of Grayscale Bitcoin Trust (GBTC), ether has started gaining momentum. As more focus turns towards Ethereum’s network upgrades and the possibility of an ETF approval, both ether and altcoins are expected to outperform. February has historically been a strong month for both bitcoin and ether, with average gains of 13.12% and 12.97%, respectively.
Ethereum’s Potential ETF Approval
The recent approval of spot bitcoin ETFs by the US Securities and Exchange Commission led investors to take profits and rotate into ether, driving it to a 20-month high. Looking ahead, decisions on spot ETH ETF applications are expected from May onwards. Several firms including BlackRock, Invesco, Ark, VanEck, and Grayscale are seeking approval for ETH ETFs. Standard Chartered predicts that if ether tracks or outperforms bitcoin’s pre-ETF uptrend during this period, it could reach $4,000, a 70% increase from current levels.
Ethereum’s continuous improvements and upgrades, such as the upcoming “Dencun” update in February, make it a strong contender against faster and cheaper alternatives like Solana. Ether is also well-positioned to benefit from the popularity of altcoins that run on the Ethereum blockchain. Traditional finance players who may not have access to trade altcoins are likely to manifest their interest in ETH. While ether’s gains for January are modest, other altcoins have rallied since bitcoin’s fall below $40,000 on January 23.
Hot Take: Ether Emerges as a Strong Competitor
Ether is ready to shine after bitcoin ETF hype subsides. As institutional flows into bitcoin slow down, ether and altcoins are expected to outperform. Ethereum’s potential ETF approval and continuous network upgrades make it a strong competitor against bitcoin. The upcoming “Dencun” update in February will further enhance Ethereum’s capabilities. Additionally, ether stands to benefit from the popularity of altcoins that run on its blockchain. Traditional finance players seeking exposure to blockchain growth areas beyond bitcoin are likely to turn to ether. While ether’s gains for January have been modest, it is poised for significant growth in the coming months.
By
By
By
By