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Ether, often overshadowed by Bitcoin in recent months, may see a significant price surge, potentially doubling or more, according to Juan Leon, a crypto research analyst at asset manager Bitwise.
In an interview with CoinDesk Markets Daily, Leon expressed optimism about ETH's prospects, suggesting it could surpass $8,000 or even $10,000 this year and perhaps even go higher.
Key Catalysts Driving ETH's Growth
Leon highlighted two major catalysts that could propel ETH's growth. Firstly, he pointed to this month's Dencun upgrade, which is set to reduce transaction costs on layer 2 networks. This enhancement will boost activity and attract mainstream consumer demand for Ethereum.
Additionally, Leon underscored the significance of spot ether exchange-traded fund (ETF) applications, with a regulatory decision deadline approaching in May. While the approval odds are not as clear-cut as they were for spot Bitcoin ETFs earlier in the year, the anticipation surrounding the possibility of approval is expected to generate excitement for ether. Leon estimated a 50%-60% chance for approval, expressing confidence that it would occur "sooner or later."
Potential Impact of ETF Approval
An approved ETF would likely enhance ether's appeal among more conservative institutional investors, mirroring the strong investor demand seen with the launch of spot Bitcoin ETFs in January, which amassed nearly $9 billion in net inflows.
According to Coindesk, beyond these catalysts, ETH's deflationary supply, the growing trend of restaking led by EigenLayer, and the increasing activity in decentralized finance (DeFi) contribute to a positive outlook for ETH prices, as noted by broker firm Bernstein in a report last month.
A News BTC report states while Bitcoin has a programmed scarcity with a capped token supply of 21 million, Ethereum's supply remains infinite, offering a distinctive characteristic within the crypto landscape.
Comparative Performance and Historical Context
Reflecting on historical trends, the contrast between BTC and ETH is stark. Late November 2020 saw BTC nearing its all-time high at $19,000, while ETH remained below $600, representing a significant disparity from its 2018 peak. However, as BTC surpassed its previous record price in the ensuing months, ETH embarked on a substantial rally, reaching a peak of $4,400 in May.
As ETH continues to assert its position in the cryptocurrency market, investors and analysts are closely monitoring its potential for growth in 2024 and beyond.
Photo: Kanchanara/Unsplash
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