[Written By External Partner]
As the first and largest cryptocurrency that started it all, Bitcoin has always been the face of newspaper headlines and the main topic in related discussions. It sets the stage for how the cohort of imitations behaves, as the prices of all the creations following it tend to fluctuate depending on BTC’s performance. However, Ethereum, the second-best crypto to date that’s unlikely to be dethroned soon, stood out from the crowd in numerous ways, and today’s newsfeeds make no exception. It’s the only crypto that managed to come as close to Bitcoin as to threaten its existence, seeing its popularity give birth to the hypothetical concept of “flippening” – or the moment that Ethereum overtakes Bitcoin in terms of market cap share.
As the year comes to a close, all eyes are on the two flagship coins, Bitcoin and Ethereum. The former had a remarkable growth performance of over 60% accumulated over the course of the whole year. In contrast, Ethereum comes second in the list of gainers and surpasses its counterparts with an advancement of 40%. Evidently, the number of investors looking for a share of the pie as the second-safest crypto has grown exponentially, including those looking to buy Ethereum with bank transfer instead of other common means of payment or acquisition. Justifiably, Bitcoin would be an asset to have all eyes on it and pique the interest of potential investors and researchers. However, Ethereum has surprised the crypto world and beyond as it’s gained more attention than the heavyweight, leaving those less familiar with the system wondering what’s the catch. What is Ethereum cooking in the oven, and what are the upcoming events the supporting ETH community expects?
Photo source: https://www.pexels.com/photo/bitcoin-and-ethereum-coins-standing-against-a-purple-background-14911423/
More interest in GETH indirectly translates to more capital injected into ETH
GETH, short for the Grayscale Ethereum Trust, is a rising investment vehicle today, aiming for the shares’ value to mirror the pricing of ETH possessed by the Trust. This value is established depending on the Index Price minus the liabilities of the Trust, such as expenses. The main goal behind the investment is to hold the digital coins of ETH, which are built and transferred through P2P ETH network processes. Clearly, it has a lot of potential as it is associated with the second most popular crypto, only that in the previous several months, the investment has displayed a much better performance compared to Ethereum spot price points.
As GETH saw more capital flowing into it and share prices rose, the discount with spot ETH shrank. In conclusion, increased capital has obliquely been poured into ETH, resulting in a growing demand and the need to suffice these increasing requests.
The verdict on the first ETFs could finally be here
Leaving GETH prices rising and contributing to growing demand for ETH, a highly awaited announcement is just around the corner. The crypto world has been biting its lips in anticipation of a decision from the SEC declaring whether ETH ETFs, investment tools that expand exposure to Ethereum, would be approved or not. More postponements have occurred, leaving buffs in an even more confusing and frustrating state. Yet, the recent enhancements around the arrival of the first ETF for the primary coin, Bitcoin, spurs optimism among crypto enthusiasts, raising hopes that more products will be launched, including the ones put forward by Black Rock and Fidelity.
Some pundits believe releasing the first BTC ETF in the supposedly first weeks of 2024 will make all the headlines. Consequently, the appearance of the first spot ETH ETF will further pique all the interest. BlackRock, renowned as the leading investment company worldwide, has already submitted its request to the SEC to accept the launch of the first spot ETH ETF. And according to one of the most notable crypto specialists, Hashdex, the first spot BTC ETF in the US will trade by the second quarter of the following year, bringing about the consequent ETH ETF.
The approval of the primary ETH ETF may appeal to financial institutions, which might pour capital into the investment, thus naturally dragging its price higher.
Crypto buffs wait for the ETH hard fork testing in the subsequent weeks
Anything happening behind the doors of the room of Ethereum’s developers has one purpose: to improve the blockchain and network in the numerous aspects where there’s plenty of room for enhancements. Ethereum has gained the reputation of the ledger that boasts one of the most involved and focused teams of devs, constantly working to improve the scalability, lower the fees despite the recent fee increases, enhance the net throughput, and improve its accessibility to more interested parties, to name a few of the ambitions.
These days, the determined crew behind ETH is working on deploying Dencun Upgrade, short for Cancun-Deneb, that will focus on improving the execution and consensus layers. The measures deployed will considerably change the system’s usability, security, and scalability, which will undoubtedly work as aces up Ethereum’s sleeve.
Whether the event expected in January of 2024 will impact the price remains to be seen. The most significant update for Ethereum to date, namely the Merge, transitioned it from the proof-of-work consensus mechanism to a proof-of-stake model, which not many blockchains, including Bitcoin, can do. Looking at the historical data, the ETH price climbed after the finalization of the update, only to shrink later and maintain a constant trajectory for several days. The crypto community holds high hopes that the following ETH upgrade will fuel a rise in its price.
Ethereum is vital for the DeFi ecosystem
Ethereum is sometimes used synonymously with the decentralized finance (DeFi) applications, as it has given birth to the first programmable smart contract, or a self-executing contract that needs the fulfillment of previously-established criteria to empower an agreement.
Unlike Bitcoin, which is notorious for its pioneering role, Ethereum has groundbreaking DeFi applications, witnessing the development of Uniswap, Compounds, and MakerDAO, to name a few of the critical apps vital to the DeFi ecosystem. These birthed new concepts like automated market maker systems, algorithmic money markets, and stablecoin loans, showcasing the practicality of intrinsic financial transactions within decentralized networks.
Final words
Ethereum tends to be the better long-term choice for many, given the many actual use cases introduced to the DeFi world. The asset grew from $1,200 to $2,200 in less than a year, and most of the crypto community is confident that the price will continue to trade in green for the better part of the following weeks. Which is the best bet to go with when you want to play it safe?
