Ethereum Could Reach $10,000 This Year, Says Bitwise Analyst
The price of Ether (ETH), the second largest cryptocurrency by market cap, could soar to $10,000 or even higher this year despite being overshadowed by Bitcoin (BTC) in recent months. This optimistic outlook comes from Juan Leon, a crypto research analyst at asset manager Bitwise.
According to Leon, ETH, which is currently valued at $3,950, has the potential to rally past its all-time high of $4,800 and potentially reach $10,000. He attributes this potential growth to two key catalysts: the upcoming Dencun upgrade and the excitement surrounding the launch of spot Ethereum exchange-traded funds (ETFs).
The Upcoming Dencun Upgrade
The Dencun upgrade is highly anticipated as it is expected to enhance Ethereum’s layer-2 rollup efficiency through proto-danksharding or ephemeral blobs (EIP-4844). This upgrade is considered to be the network’s most significant since Shapella in April 2023, which enabled the withdrawal of staked ETH.
Proto-danksharding aims to reduce storage demands by utilizing temporary storage space for higher transactional throughput. This innovation will enable access to off-chain data, ultimately reducing transaction costs on layer-2 networks by 10 times or more. Both the Shapella and Dencun upgrades are crucial steps in Ethereum’s transition from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) network.
Dencun has already been successfully deployed on the Goerli, Sepolia, and Holesky testnets, with the mainnet launch scheduled for March 13. Leon believes that the launch of Dencun on Ethereum will serve as a positive sentiment catalyst, driving ETH to unprecedented highs. The reduced transaction costs on layer-2 networks will attract increased activity and mainstream consumer demand.
Excitement Around Ethereum ETF Approval
Another factor that could contribute to the significant price surge of ETH is the excitement surrounding the potential approval of spot Ethereum exchange-traded funds (ETFs) in the United States.
Several prominent asset management firms, including BlackRock, Fidelity, Invesco, Galaxy Digital, VanEck, and Ark Invest, have all submitted proposals to launch spot Ethereum ETFs. These firms previously issued spot Bitcoin ETFs and are now looking to expand their offerings to include Ethereum. However, the U.S. Securities and Exchange Commission (SEC) has extended the deadline for deciding on these applications until May.
While Leon acknowledges that the odds of spot Ethereum ETF approval may not be as high as they were for Bitcoin ETFs, he speculates that there is still a 50% to 60% chance they will be greenlighted. Regardless of the outcome, Leon believes that the launch of spot Ethereum ETFs is imminent and expects it to happen sooner or later.
Hot Take: Ethereum’s Potential for Explosive Growth
Ethereum has faced challenges in recent months as Bitcoin dominated the crypto market. However, analysts like Juan Leon from Bitwise believe that ETH has significant potential for explosive growth in the coming year. With catalysts like the upcoming Dencun upgrade and excitement surrounding spot Ethereum ETFs, ETH could rally past its previous all-time high and potentially reach $10,000 or higher.
The Dencun upgrade is expected to enhance Ethereum’s efficiency by reducing transaction costs on layer-2 networks. This will attract increased activity and mainstream consumer demand, driving up the price of ETH. Additionally, the potential approval of spot Ethereum ETFs in the United States could further boost ETH’s value.
While there are uncertainties surrounding the approval of spot Ethereum ETFs, Leon remains optimistic about their eventual launch. Even if the approval odds are not as high as they were for Bitcoin ETFs, Leon believes that spot Ethereum ETFs will be introduced to the market sooner or later.
If these catalysts play out as anticipated, it is highly likely that ETH will experience significant price appreciation and reach new all-time highs. Investors and crypto enthusiasts should keep a close eye on Ethereum’s developments in the coming months, as it could prove to be a lucrative investment opportunity.
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